When It Comes to Employee Benefits, Small Businesses Are Coming of Age

Stereotypes to the contrary, today’s small businesses have caught up with–and in some cases, outpaced–their larger peers when it comes to the quality and diversity of employee benefits offerings. According to MetLife’s recently released Employee Benefits Trend Study, more than one-third (34 percent) of workers at small businesses with fewer than 50 employees are “satisfied with the benefits (they) receive through (their) employer,” compared with 29 percent of employees at midsize and large companies (200 – 4,999 employees). Overall, benefits satisfaction at small businesses (34 percent) is on par with satisfaction levels at the largest U.S. companies with 10,000 – 24,999 workers (35 percent).

In addition to existing employee benefits, the MetLife research shows that more than one-quarter (26 percent) of employees working for the smallest companies surveyed (2 – 49 employees) and nearly one-half (46 percent) of those working for companies with 50 – 99 employees are interested in having their employers provide a wider array of voluntary benefits–i.e., benefits that employees choose and pay for on their own.

“Voluntary benefits are a perfect fit for the small business market,” said Ben Colvin, vice president, Institutional Marketing, MetLife. “They give employers a cost-effective way to increase the diversity of their benefits offerings.”

Among all employers, nearly half (45 percent) see voluntary benefits as an economic solution to a critical challenge–meeting the diverse needs of employees. For an almost equal percentage (44 percent) of employers, voluntary offerings are a cost-effective way to enhance the attractiveness of their overall benefits program. Nearly two-thirds of employers (60 percent) believe that payroll deductions make voluntary benefits convenient for their employees, while one-half (50 percent) note that voluntary benefits offer employees better rates.

As voluntary benefits expand, the Internet has become an increasingly popular tool for benefits education and enrollment. For firms with 10-49 workers, for example, 15 percent of employees today obtain initial information about their benefits through the Internet or their company’s Intranet, up from 3 percent in 2003.

Among the other key findings:

Higher-Than-Average Job Satisfaction Rates: While nearly half (47 percent) of all employers report high levels of workplace satisfaction, perceived satisfaction is highest among the smallest companies surveyed. Nearly two-thirds (63 percent) of companies with 2 – 9 employees–and 58 percent of those with fewer than 50–believe their workforce is satisfied, compared with 38 percent of companies with 10,000 – 24,999 employees. In terms of actual job satisfaction, 42 percent of workers at companies with fewer than 50 employees–and 51 percent of workers at companies with 50 – 99 employees–report high levels of job satisfaction. This compares with 44 percent of workers overall, 28 percent of workers at companies with 5,000 – 9,999 employees and 36 percent of workers at companies with 10,000 – 24,999 employees.

Mutual Loyalty: Employee and employer loyalty rates are, likewise, highest in the small business sector. More than one-third (69 percent) of small employers with fewer than 50 employees describe themselves as “loyal” to their workers, compared with 56 percent of employers overall. For both employers and employees, with few exceptions, loyalty declines as company size increases.