How to Build the Right Small Business Employee Benefits Package

08.22.2025 | Category: Benefits for Your Employees

Estimated Read Time: ~8.5 minutes

Summary: Offering competitive employee benefits isn’t just for big corporations. This article shares how, with the right small business benefits package, even modest budgets can boost employee satisfaction and long-term retention.

Do you own a small business? Do you want to attract new talent and keep your existing employees? In a tight labor market, the benefits package can often matter more than the payout. For small businesses that can’t always outbid big competitors on salary, smart, relevant benefits are one of the best ways to compete.

This means employers need to think about providing the right options for health insurance, life insurance and retirement plans.

These programs are also key to building loyalty. Employees are more likely to stay when they feel cared for, not just as workers, but as people. And the data backs this up: retirement plans, financial wellness assistance, and greater support rank high on the list of what matters most to today’s workforce¹.

A thoughtful small business benefits package won’t just attract strong candidates. It will keep them. This reduces hiring costs, strengthens your culture, and helps you grow without constant turnover dragging you down.

Health insurance

Research shows that health insurance is one of the most important small business employee benefits. When asked about the benefits that would most make them want to stay with an employer, health insurance came top, with 68.1% percent of respondents saying an employer would be more likely to retain them if it was part of their benefit package².

That stat speaks volumes. Health coverage is the baseline expectation for most employees, and a huge differentiator when it’s offered by a small company.

Know what changes make an impact. If you already offer health insurance but want to change plans, make a list of which benefits can be better. Ask your team what they would like. You may find that extras like online tools and 24/7 support are valued more than lower premiums, so be strategic with your budget. A low-cost benefits package that’s thoughtfully designed often goes further than an expensive plan nobody uses. And don’t forget about additional benefits, such as dental insurance for employees and vision insurance.

More employee benefits

Offer more to attract more. Other employee benefits, like retirement accounts and group insurance, are often viewed along with overall compensation. They can give you a competitive edge when recruiting employees. Group insurance and retirement options are designed to help protect your employees in the long term. Including these benefits is a way to show that you value their total well-being.

The rise of flexible and lifestyle-based benefits

In recent years, there has been a shift in what workers value in the workplace. Flexibility is becoming one of the most sought-after work perks employees look for. In fact, half of U.S. employees say they prefer employers who offer workplace flexibility and would even rethink their job if flexibility were removed³.

And this one doesn’t necessarily cost much! Offering more flexibility for your employees could include letting them to work from home or have flexible hours, depending on what best fits your business needs.

Here are more high-impact ideas that can help keep small business employee benefit costs down:

Compressed workweeks (e.g., 4×10-hour days): This option gives employees a full extra day off each week without cutting total hours. It’s especially appealing to workers balancing caregiving, side gigs, or long commutes.
Paid volunteer hours: Offering paid Volunteer Time Off (VTO) for community service signals that your business stands for more than profits. It supports team bonding and shows employees that their values matter. Plus, building goodwill in the local community can be great for keeping small businesses thriving.
Home office stipends: Whether your team is remote, hybrid, or just occasionally working from home, a small annual budget for home office supplies or equipment helps employees work comfortably and professionally, reinforcing that they’re supported no matter where they are.
Monthly wellness reimbursements: Give employees a modest allowance, say $25–$75/month, to put toward fitness classes, gym memberships, meditation apps, or healthy meal services. It’s flexible, affordable, and helps prevent burnout. Bonus: Many employees will see this as more valuable than a higher-cost, one-size-fits-all wellness program.
Sabbatical leave after X years: Even offering 2–4 weeks of paid time off after 5–7 years with the company can boost retention significantly. It costs far less than replacing a long-term employee, and it encourages loyalty by rewarding people who stick around.

Even a modest investment in these areas can make your small business’s benefits package stand out from the crowd, especially when competitors are still offering little beyond health insurance and PTO. These extras are memorable, meaningful, and often surprisingly easy to implement.

What small business employee benefits mean for retention

A strong small business benefits package doesn’t just fill open roles. It helps retain the talent that’s already trained, productive and trusted, making it a far more cost-effective strategy than starting from scratch.

According to LIMRA’s 2025 Benefits and Retention Survey, over 60% of employees say they’re more likely to stay at a company because of the benefits provided⁴. Small businesses that get benefits right often see measurable retention wins.

Employee retention has moved past the arrangement of ping pong tables and free coffee. It is now about helping employees feel secure, seen, and supported. When that happens, employees are more likely to stick around and less likely to be swayed by a competitor.

Sample small business benefits packages by budget

There’s a way to build a competitive small business benefits package irrespective of whether you’re just starting out or growing fast. Here’s how different tiers might look:

Basic plan (budget-friendly or early-stage)

Small monthly healthcare stipend
Access to virtual care platform
Flexible work hours
10 days paid time off (PTO)

Mid-tier plan (for growing teams)

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) with $4,000 annual reimbursement (only for companies with less than 50 employees)
Vision and dental add-ons
SIMPLE IRA with 3% match
10-15 PTO days + paid vacation

Full benefits plan (established businesses)

Group health, dental, vision (50–100% employer-paid)
Life insurance
401(k) with employer match or profit-sharing
10-15 PTO days + paid vacation
Paid family leave and wellness reimbursement program

Choosing the right small business benefits providers

Finding the right benefits provider should be a partnership decision. For small businesses, the right provider makes delivering benefits easier, not harder.

When small businesses invest in employee benefits, they need a provider that understands their unique challenges: limited budgets, lean HR teams, and employees who wear many hats. The ideal partner helps small business owners navigate options and reduce admin headaches.

Here’s what to look for:

Simplicity and guidance: Small businesses shouldn’t have to decode complicated policy language or manage a dozen systems. A good provider makes everything easier, offering intuitive onboarding, clear explanations and proactive support when questions arise.
Flexible benefit design: Look for a provider that lets you tailor a small business benefits package around your team’s needs and your financial reality. Whether that means starting with a simple health insurance plan or helping you choose between term insurance and whole life insurance or retirement options, you need the ability to grow your offerings over time.
Bundled solutions to save time: Managing benefits across multiple systems and vendors eats up valuable time. A provider that offers bundled solutions — health, life, dental, vision, retirement, and more — under one umbrella keeps things streamlined and scalable.
Compliance and regulatory support: Rules around employee benefits change fast, and even small missteps can be costly. The right provider offers ongoing compliance support, keeps you informed about regulation changes, and helps you avoid penalties.
Responsive customer service: You need a partner that answers the phone. Whether it’s a billing question, a claims issue, or help selecting coverage levels, prompt, knowledgeable support helps your business stay focused on what matters.
Technology that works for small teams: A modern, user-friendly portal that lets both employers and employees manage their benefits easily, from enrollment to updates, can reduce HR strain and empower your team.

In short, your provider should feel like an extension of your business, not another layer of complexity. Small business employee benefits are too important to settle for anything less.

Your employees are the lifeline of your business. Offering competitive benefits can help your small business succeed by retaining and attracting the best talent. At Mutual of Omaha, we understand how important it is to offer the right benefits without overwhelming your budget.

You can speak with a financial professional to explore solutions designed specifically for small businesses and the people who power them.

Frequently asked questions

What are the essential employee benefits for small businesses?

The most essential benefits typically include health insurance, dental and vision coverage, life insurance and a retirement plan. Depending on your workforce, adding flexible work arrangements or wellness resources can also go a long way toward meeting employee expectations.

How can small businesses offer competitive benefits on a budget?

Start with the most valued, high-impact options like health coverage and retirement savings plans. Then layer in low-cost perks such as flexible schedules, paid volunteer time or wellness stipends.

Can a small business offer health insurance to some employees and not others?

Generally, health insurance must be offered fairly and consistently to avoid discrimination and remain compliant with federal regulations. Most small businesses choose to offer coverage based on objective criteria like full-time status, tenure, or job classification.

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.

All investing involves risk, including the possible loss of principal, and there can be no assurance that any investment strategy will be successful.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

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