What’s your biggest obligation to your employees? If you’re like most entrepreneurs, it’s to keep the company running—not necessarily to offer them benefits.
New research from Manulife Financial reveals that 88% of small-business owners and senior executives in Canada say their main responsibility to staff is to ensure the business continues. The findings, which come from a survey of 1,004 Canadian small business owners, were published in a document titled Small Business Research Report for 2013.
This prioritization may explain why so few entrepreneurs have gotten around to offering health benefits. According to the report, only 47% of respondents offer some type of health benefits plan. Of those, 44% offer standard plans, 20% offer flex plans and 8% offer healthcare spending accounts.
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It’s not that entrepreneurs don’t appreciate the, well, benefits of benefits: Many survey respondents used to work at larger companies where they themselves had health coverage, so they know the perks of being covered. But when they started their own company, they didn’t fully realize the financial commitment of offering benefits plan. When they found out, they tended to back off. In fact, 41% of owners and senior executives who currently have a health benefits plan considered offering the plan in their startup phase, yet only 18% actually did so.
Not exactly a great way to recruit and retain staff—especially since a good benefits program is a great way to keep current and prospective employees happy. When a company offers good coverage, word tends to spread, says John Sabourin, vice-president of of Selectpath Benefits and Financial Inc. (who sat on the national advisory board that helped to shape the survey). “Employees tell other people it’s a good place to work, and the business will be able to attract and keep quality people,” he says.
Here’s a snapshot of what small business owners across Canada are offering their staff:
- Health benefit plans are offered by 47% of firms. (Among startups, that number is 22%; among growth companies, 42%; and among established firms, 52%);
- Retirement plans are offered by 19% of respondents. (Among startups and growth companies, that number is 13%; among established firms, 22%);
- 11% of all companies offer employee wellness programs, such as subsidized gym memberships, personal training and smoking cessation programs);
- Only 7% of respondents offer deferred profit sharing programs (DPSPs). Startups lead the way here, with 12% offering DPSPs; 8% of growth companies and 5% of established firms offer the same;
- And only 4% of respondents offer tax-free savings accounts. (Among startups, that number is 10%; among growth companies, 4% and among established firms 3%).
The survey was fielded in April and May 2013 by the Rogers Connect Market Research group of Rogers Publishing Ltd., on behalf of Manulife Financial.