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The Pros and Cons of Providing Employee Benefits for Your Home Business


Whether you have a small or large business at home, providing employee benefits is almost always important. These employee benefits include a 401K and health insurance. Even when you're employing family members and relatives, a good employee benefit package is a must. There are certain benefits that are mandated by law.

An excellent employee benefit plan should protect employees and their families from financial trouble due to sickness, disability, unemployment or death. It should also allow them to take a leave from work and if possible, let them enjoy retirement income. If you're a home business owner who's looking into providing employee benefits, find out the pros and cons below.


The advantages of providing employee benefits include that they can boost the morale of your workforce. It allows your employees to lead a healthier and better lifestyle as it can help to save money from personal health expenses such as free annual workups and dental care. It motivates your employees to give their best to the organization or company.

Once you've established yourself as a home business that provides comprehensive employee benefits, word of mouth will spread about it and it will help you draw the most competent and skilled employees. Once potential competent candidates know about the benefits you offer, they'll come knocking at your door which in turn will make the recruitment easy--you get to save time and money, too. 

It helps retain employees as a comprehensive employee package will most likely increase employee satisfaction. Small businesses also can take advantage of less tax deductions due to employee plan contributions. Most HMOs or companies that offer medical or health plan packages offer huge discounts to large groups. The business owner himself will shell out less money for his own medical plan as he can include himself in the employee medical plan package.


Small home businesses providing employee benefits usually pay more as compared to the larger ones. This is due to higher plan prices because of the business' reduced buying power. There are fewer options for designing a retirement plan for the employees, as small businesses have higher administrative costs. The more benefits that are paid for the employees, the higher the costs for the administrative overhead.

Making the Decision

If you're a small home business owner who wants to provide employee benefits, you can check on the availability and rates of plans at your local chamber of commerce, trade associations in your industry, through community business leaders, independent insurance agents and state insurance departments.

Before making the decision, assess how much you are willing to pay. Determine your employees' needs, wants and preferences when it comes to medical and retirement plans. Ask for a consensus and talk to them openly about it. With careful panning, you will be able to come up with an informed choice regarding employee benefits.

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