How to offer a comprehensive benefits package without spending a fortune

Unfortunately, it always has been expensive and difficult for small businesses to provide the kind of benefits larger companies offer. Without guidance, most can't do it. But it's actually easier than you think, and with a little creative thinking, you can offer a comprehensive and competitive benefits package without spending a fortune.

Initially, when you think of benefits, you usually think of health insurance, vacation and maybe retirement plans. But to offer a truly outstanding plan, you have to expand your thinking to other areas.

Offer benefits your employees want and need. The only way you can do this is to ask them what's important. Getting your employees involved in designing a benefit plan will pay you great dividends. They'll feel more a part of this important process, even if you can't realistically provide them everything they'd like to have. This will build company loyalty and strengthen your employees' commitment.

Provide an environment that allows employees to use their benefits. This sounds simple. For example, your company may offer ample vacation time, but inordinately restrict when people can take time off. I worked for a company that, even though I had earned three weeks vacation time, it wouldn't allow me take the time around Christmas, which is important to me. This restriction made me unappreciative of the time that was available and challenged my morale.

I understand there may be times when you're busier than others and agree there has to be some regulations built into available vacation schedules; however, I suggest offering flexibility when setting up your vacation plan. Think about what's important to you, on a personal level, and you can bet those same things are important to your employees.

Offer special perks and extras as part of your benefits. I've written plans that allow people to take time off for doctor's visits twice a year, without affecting sick or vacation days. Have you tried to get a doctor's appointment on a Saturday? It's almost impossible. Your staff might appreciate this perk. You may be able to offer flexible work hours or even a work from home option one day a week. These are all great options to add to a traditional benefit plan.

Add incentives to your package. Maybe you can't afford stock options or a company car. That's fine. So find small ways to show appreciation for your employee's hard work. If an individual is giving his best effort, be sure to notice it.

Offer an extra floating holiday day for someone who meets his goals for the month. Maybe just the ability to leave early on Friday or offer a casual dress day. How about a discounted health club membership? These simple types of offerings are great ways to build loyalty without adding tremendous costs.

Consider day care and public transportation assistance. It's difficult for working parents to find ways to get quality day care for their children without interfering with work. Most parents have a lot of after-school events they need to attend and having rigid work hours can be a source of stress. Try to not make work hours an issue.

Being flexible with your employees can be an extremely valuable benefit to working parents. One they may consider so important, they'd accept lesser benefits in other areas. In urban areas, you may be able to offer your employees discounted vouchers for public transportation. Have you ever thought about a company car-pool van? It might not work for your specific needs, but it may be a great additional benefit you can offer your employees.

Health insurance

This is a big area of concern for most small businesses, mainly because the cost and limited benefits smaller groups can offer employees. There's a lot to consider, and this is an area you should involve your employees as part of the decision-making group. If you allow them to give input into what plans make the most sense for them, they'll be much happier using it. Here are suggestions to consider when shopping for health insurance to insure the most comprehensive plan for the cost.

• Look into outsourcing your benefits. This isn't a new idea, but it has become popular recently. There are many different companies that provide this type of service, such Administaff or ADP Total Source. These companies offer a myriad of services from handling all your human resources needs, including payroll, to only providing a better and more cost effective benefit package. These companies are aligned with larger employee groups. When you add your staff to their already large numbers, your per-person costs for better benefits are reduced greatly. Because of being part of a larger group, you may be able to offer a better selection of plans, through different carriers at lower cost as well.

Several of these companies specialize in working with small businesses, so they understand your needs well. You may be able to offer the same type of benefits much larger companies offer within your budget. As with any type of benefit plans, you'll need to decide what portion of the premiums your employees will pay. This is always a little sticky, but most employees expect to pay some cost for any of these plans.

Involve employees in this process. Talking with your employees openly about this issue will help bring about a more acceptable solution. I have a great deal of faith in the value of honest and open conversation. You'll be amazed at the results you can achieve by trying it.

Make sure you're giving your staff real numbers. I worked with a company that agreed to split health insurance premiums with employees. Each party would pay 50 percent of the premium. The problem was company management told the employees an inflated premium number, so the employee was paying closer to 80 percent of the true premium. Your employees are your most important asset. Don't lie to them. It will cost you your business.

• Look into health savings accounts. Here's a quick background on health savings accounts (HSA) and how they work. These plans were put into place as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The HSA is a combination of health insurance and a retirement plan. It was established so savings used for qualified medical expenses for yourself, or anyone you claim as a spouse or dependent, would be free from taxes.

Medical expenses that qualify under most HSA plans include doctor and dentist visits and eye, chiropractic and long-term care. Certain Medicare plans are covered under HSA plans, too. Cosmetic surgery, health club dues, nonprescription drugs and funeral expenses aren't covered under the average HSA plan.

Employee contributions to an HSA are pre-tax, a big benefit for most employees and employers. If the savings are used for qualified medical expenses, the entire amount can be withdrawn tax free. An HSA is a win-win for the employee, employer and the insurer.

Because the HSA is based on a high-deductible insurance plan, the cost is usually lower for the employer/employee for the plan outright. In these plans, the employee takes on a higher level of responsibility for their own medical expenses than a standard insurance policy. Employees who dash off to their family doctors office every time someone sneezes because the visit only costs them $10 under a traditional plan, will think twice about doing so when they pay the full $100 doctors bill out of their own account.

The health-care arena has changed dramatically. Companies have trouble affording standard benefits, so an HSA is a great way to leverage your cost versus benefit scenario. These plans beg your people to become more involved in their own health and well being by promoting a healthier life style.

• Get involved in your local chamber/network. It's a great idea to become involved in your local chamber of commerce or other similar groups, which consist of other businesses that are experiencing the same issues you are. You may be able to partner with one or two of them that have similar health insurance needs on a group plan that covers all of your combined employees.