The small business community felt the effects of COVID-19 when legislation partially or entirely shut down many small enterprises. The recovery phase has begun, and we believe employee benefits make an essential contribution to small business recovery. Today, we’ll look at how small businesses have been affected by COVID-19 and why benefits are more important than ever. Plus, we share two benefits resources with you, including our latest white paper on flexible spending accounts.
The effects of COVID-19 on small businesses
During COVID-19, many small businesses closed their doors, laid off employees and completely shut-down their in-person revenue-generating activities. A recent CIBC study found that 81% of small business owners in Canada say their business has been negatively affected by COVID-19. On a grander scale, CBC reports that almost 2 million jobs were lost in April 2020 due to the COVID-19 pandemic.
However, there’s good news too. That same CIBC survey found that 76% of small business owners believe their business will rebound after the pandemic.
Why employee benefits are more important than ever: A looming mental health crisis
If you’ve read our blog before, you know that for small businesses, benefits are essential for recruitment and retention efforts in general and during COVID-19 specifically. This remains true but there’s a new reason emerging; experts around the world are predicting a post-COVID mental health crisis.
In India, for example, they implemented the largest lockdown in the world during the COVID-19 pandemic—1.3 billion people. The World Economic Forum reports that “cases of mental illness have risen 20% in India since the country went into lockdown.”
Closer to home, the Angus Reid Institute reports that 50% of Canadians say their mental health is worse since the pandemic started and 10% of Canadians say their mental health is a lot worse.
This doesn’t get better overnight.
Global News reports that Margaret Eaton, the CEO of the Canadian Mental Health Association says, “It can take up to two years for someone who’s experienced a tragedy to resume their normal life.”
And in the business world, 60% of small business owners from that CIBC study (mentioned above) said they “wish they could do more to help their staff.”
Small business owners can help their employees navigate this mental health crisis. They can do this by offering benefits, making remote work options more available and letting employees know about mental health support available beyond their own benefits plan.
How small businesses can offer benefits for less
There are many benefits options for small businesses including traditional benefits plans offered by large insurance companies. However, traditional benefits tend to be complicated, inflexible and expensive. These plans usually include standard medical, dental and insurance coverage and the employer pays a monthly premium for each employee, whether the benefits are used or not.
In 2015, the Conference Board of Canada found that, on average, benefits cost $8,330 per full-time equivalent. Even modest traditional benefits plans cost $3,600 to $6,000 per year ($300 to $500 per month per employee).
This is generally more than many small businesses can afford—especially when benefits go unused!
A more affordable option for small businesses is providing benefits based on a flexible spending account. At BeniPlus, for example, our flexible spending account is called the Benefit Wallet. This type of plan lets employees use their benefits dollars on the benefits they want and need. For employers, it means no monthly premiums and no surprise rate hikes at renewal time.
Flexible spending accounts allow small businesses to offer benefits for as little as $1,200 to $2,400 per year ($100 to $200 per month per employee). What a difference!
Benefits resources for small businesses
To help you learn more about simple, flexible and affordable benefits for small businesses, we’ve got two resources for you.
Resource #1: Flexible Spending Accounts: What They Are and Why They’re Essential for Small Business Benefits Programs (white paper)
We published this white paper because people are a company’s greatest asset and an obvious way to show you care about your employees is to provide benefits.
In this white paper, we look at what a flexible spending account is, what can be included in one and the three reasons small business owners use flexible spending accounts for employee benefits.
To give you a sneak peek, small businesses use flexible spending accounts to:
- Boost their employee recruitment and retention efforts.
- Implement an affordable alternative to traditional benefits.
- Enjoy the tax advantages that come with offering employee benefits.
Resource #2: Customized benefits quote for your small business
Before you consider implementing a new benefits plan or moving away from your traditional benefits plan into a flexible spending account model, you’ll want to know how much benefits will cost for you and your employees.
That’s why we’ve created a quick and easy way for you to get a customized quote for simple, flexible and affordable benefits. It only takes a few minutes to fill out our quotation form and you’ll receive your customized quote by email within one business day.
Get your customized benefits quote today.
During the post-COVID economic recovery, it’s essential for small business owners to be fiscally responsible while supporting their employees. Transitioning into an affordable benefits plan based on a flexible spending account lets you save money on benefits now. And when it’s time to start recruiting again, having a benefits plan in place makes it easier for you to pursue and secure top talent. If that sounds good to you, take 10 minutes today to get a quote for our simple, flexible and affordable employee benefits program.