For more than 80% of small business owners, the pandemic and its upheaval of the workplace have made employee benefits a top strategic priority according to a new Small Business Owner Survey from Lincoln Financial Group—and pumping up retirement benefits is a big part of the “fix.”
Employee benefits play a critical role in impacting culture and morale, employee wellbeing, and attracting and retaining top talent.
Nearly all small business owners surveyed (93%) said they have re-evaluated their strategy and plan to make changes to their business due to COVID-19. More than a quarter (28%) of small business owners reported beefing up their benefits to attract and retain talent as a result of the pandemic: 27% are adding a retirement matching contribution, financial wellness program and/or retirement account. In addition, 30% are adding life insurance and more than 25% are adding benefits like accident, critical illness, hospital indemnity, vision and/or dental insurance.
“Small business owners understand just how critical a robust benefits package is for attracting and retaining top talent in today’s competitive market,” said Ralph Ferraro, senior vice president, Workplace Solutions Product and Underwriting, Lincoln Financial Group. “And they are looking to benefit providers to offer innovative, simple solutions that meet their employees’ needs and make it easier for owners to focus on running their day-to-day business.”
For the purposes of the survey, small business owners were defined as currently owning a business with 10-100 employees and revenue between $250,000-$10 million.
Removing barriers facing small biz owners
An increase in the strategic priority of employee benefits raises concerns for small business owners on choosing the ones that best suit their needs, ranging from weighing the costs and benefits of plans (51%) to administrative concerns (28%).
However, nearly three-quarters (72%) say multi-employer benefits solutions are appealing (for cost-saving, access to more benefits and ease of use), so solutions like Pooled Employer Plans (PEPs) could help, as these products are aimed at helping small businesses offer a robust retirement plan with fewer administrative and fiduciary responsibilities than a traditional plan.
While many small business owners consult financial professionals on business growth and strategy (58%), far fewer discuss business succession (31%) and protecting against the loss of key people (22%), though both can be addressed through products such as life insurance. As nearly two-thirds of small business owners discuss their business with their financial professional at least quarterly (64%), there’s an opportunity to address these gaps.
“From protecting an owner’s family against issues that arise from an unexpected critical illness or premature death to providing security should a business lose an essential employee, life insurance products can help small business owners mitigate significant business risks, protecting both personal and professional interests,” said Andy Bucklee, senior vice president, Life and Executive Benefits distribution.
Radnor, Pa.-based Lincoln Financial Group has approximately 16 million customers in its retirement, insurance and wealth protection operations with $324 billion in end-of-period account values as of December 31, 2021.
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• Lincoln Financial Group Adds Income America
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
