Where to Start? Employee Benefits Tips for Start-Ups
We're asked a lot about what type of employee benefits plan is best for start-ups.
It's a great question but, unfortunately, not one with an easy answer because each situation is different.
That said, there are a few things you want to make sure you take into consideration - in no particular order.
- who's paying for the benefits?
- Are you cost-sharing with employees or funding the whole plan?
- Is it a Defined Benefit or Defined Contribution plan?
1.b. Sustainability / Budget
You need to make sure you set up a plan that will be sustainable. The last thing you want to do is go too far too fast and then have to scale back or terminate the plan because it's too expensive.
- do you have multiple generations within your workforce?
- would everyone be happy with the same benefits or would different employees have different needs?
- are you trying to attract top talent?
- do you want to help improve current employee’s health with a comprehensive plan or cover the basics?
- are you looking for a starter plan?
- is your plan appropriate for the stage of business you're in and your expected growth?
- what happens when you get above 10 employees, 25 employees, 100 employees?
These are 4 (or 5) things that you want to look at very closely.
Implementing the wrong plan that won't be appreciated or valued by employees is a huge waste of resources and time.
And there are lots of traps and errors waiting for first time plan sponsors (ok, not just 1st time plan sponsors!).
Make sure you have an advisor who is an employee benefits expert and knows how to develop and manage these types of plans - they're too important and expensive not to.