It is easy to think of large corporations as the powerhouses of the U.S. economy, but in reality small businesses (defined as those with fewer than 500 employees) comprise 99.7% of all employer firms. According to U.S. Census Bureau data, businesses with fewer than 20 employees make up almost 90% of all employer firms. The crucial role of small businesses can particularly be felt in local communities.
One major challenge of small business involves human resources, especially as businesses grow and need to hire additional employees. Because of federal and state laws, as well as employee expectations, employers must provide employee benefits for small business and big business alike. The challenge of managing employee benefits for small business can be met with a variety of human resources software programs and other innovations that target small businesses and help make the administration of employee benefits easier and more efficient.
Typical Employee Benefits
The most common employee benefits include:
- Medical benefits – almost 100% of full time employees have medical benefits through their employer.
- Paid vacation – paid holidays and paid vacations are available to 77% of full time employees.
- Paid sick leave – almost 60% of small businesses provide paid sick leave to full time employees.
Major legislation, such as the Family and Medical Leave Act and the Patient Protection and Affordable Care Act, is putting pressure on small business to widen employees? access to these benefits. And providing good benefits helps businesses keep good employees, with 50% of employees claiming that benefits are one of the main reasons they will stay with their current employer.
Benefits Administration Solutions
Clearly, benefits are important to employees and to the success of small business. There is a growing number of options in benefit administration software to help small businesses administer employee benefits. Whether a business needs to oversee group health insurance or paid sick leave, whether a business is offering part time employee benefits as well as full time employee benefits, and whether the small business has ten employees or 200 employees, there is a software system to administer employee benefits for small business. Software can help administer benefits from above, and online human resources software can help employees access benefits information for themselves.
Currently, most companies use a variety of human rights software packages for different needs; for example, one package might cover recruiting, another benefits, and so forth. Only 13% of businesses rely on a single software system for all their human resources needs. The majority of companies (57%) intend to purchase a new human resources software package in the next year and a half. Clearly, small business is acknowledging the necessity of human resources software systems in administering employee benefits.