Health insurance to help recruit and retain SMB employees

Despite commanding a large workforce, SMEs are facing a tight labor market. A new abacus survey commissioned by Medavie Blue Cross found that nearly a third (27%) of small business owners in Eastern Canada are having trouble recruiting or retaining employees.

Travis Kelly (pictured), director of intermediary sales for Medaby Blue Cross, Ontario, said small businesses aren’t taking advantage of a highly effective tool to attract employees: health benefits. rice field.

Undeveloped recruitment strategy

Abacus research reveals several reasons why 80% of small businesses do not offer health insurance as part of their overall compensation package.

“A key factor is that more than half (57%) of small business owners believe the costs are too high,” Kelly tells Insurance Business. “21% believe that benefits are not wanted by employees or are not important to employees, which is interesting. It turns out that we consider it an important part of the overall package, so there’s a bit of a disconnect there.”

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Additionally, according to a Medavie Blue Cross survey, 9% of small business owners say they don’t know where to start developing a health benefit plan for their employees.

When it comes to negotiating job openings or helping small businesses maintain a skilled workforce, health insurance benefits can be deal makers or deal breakers. This is especially true for today’s Generation Z and millennial workers, Kelly said.

“Younger employees tend to view coverage for services such as mental health and physical therapy as essential rather than extra. Having these health benefits is relevant to today’s realities. It’s a great response and allows companies to stand out as they compete for their skilled workforce,” he added.

Cost flexibility

The cost of employee health insurance will continue to be prohibitive for many small businesses. According to a WTW study, the cost of employer-sponsored health insurance will increase by a record 10% globally in 2023 amid rising inflation and healthcare utilization.

But Kelly pointed out that business owners can start with small, flexible plans to ensure their employees are financially protected in meaningful ways. According to Medavie Blue Cross, the most important non-dental, pharmaceutical and eye benefits for small business employees are:

• Hospital coverage rate (77%)
• Critical illness insurance (74%)
• Diagnostic tests (73%)
• Long-term disability (72%)
• Healthcare workers (70%)

One way to address the affordability issue is with a pooled benefits plan. Kelly explains: But pooling them together allows those costs to be shared among many small business owners. “

Businesses with 2 to 10 employees have many options. Pooled plans offer flexibility, but also a shared responsibility to keep things affordable and sustainable over the long term.

Where should small business owners start? Kelly recommended starting a serious discussion about a health benefit plan by connecting with a broker. During these consultations, brokers should help clients balance costs and employee needs.

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“The broker needs to assess the needs of its business, understand what makes sense, and understand which reputable health benefit provider or partner would be most helpful in navigating plan design options. You can. Brokers also ensure that these solutions are budget-friendly and flexible, and provide adequate support for employees,” commented Kelly.

Health insurance plans can be deal makers or deal breakers in negotiating job openings and ensuring that small business owners maintain a skilled workforce. Nearly three out of four of his employees in eastern Canada (72%) will quit their current jobs to take jobs that provide health insurance packages, according to Abacus research.

“Having health benefits shows that you care about the health and well-being of your employees, and is a clear advantage because it sends the right message to prospective talent,” Kelly concluded. .