The job market remains steady, with unemployment at 4.3%, but about 1 in 4 unemployed Americans have been job searching for over six months.1
In today’s job market, retaining talent can still be challenging for small businesses, especially as more workers face longer job searches. Offering competitive benefits and a strong company culture can help. So how can you build a quality employee benefits package, including options for remote workers? Here are a few factors to consider.
1. Understand What Your Employees Value
Many employees now put a premium on remote and hybrid work, with most workers preferring flexibility and many favoring a hybrid model that blends remote and in-office time.2
As a small business owner, your employees likely value flexibility, especially if their roles are not tied to a specific location. Before updating benefits, gather feedback through a simple survey to learn what matters most, such as flexibility, health coverage, training, or time off, so you can better align benefits with employee needs.
2. Help Provide Broader Coverage
Many small businesses do not offer health care coverage to their employees. About half of the nation’s smallest employers do not provide health insurance to their workers.3 Given rising health care costs, this trend is not surprising.
However, small business owners who want to give employees more coverage and choice can offer a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), also called a small business HRA.4 The company can set a monthly allowance and reimburse employees for their health care costs up to that limit.
One benefit of a small business HRA is that it is not subject to payroll tax for either the employer or the employees. Small businesses with fewer than 50 employees that do not offer a group health plan may qualify for a small business HRA. This option may work well if you cannot provide full health insurance coverage.
3. Help Employees Prepare for Retirement
Many employers now focus on employees' financial wellness. You can do the same by setting up a 401(k) plan for your team.
401(k) plans have traditionally been too costly for small businesses. However, a range of lower-fee 401(k) providers has emerged to make this option more accessible. These providers offer an all-in-one solution that simplifies management, connects with your payroll system, and uses technology to help employees learn about their investment options and make changes to their plan.
Fifty-nine percent of businesses with fewer than 100 employees offer retirement or health plans.5 This means many employees still need to research and manage a retirement plan on their own. Adding this option to your employee benefits package could reduce that effort for your employees. In turn, this can help them save for retirement and may give your business an edge over other small companies.
4. Give Employees a Healthy Advantage
Health savings accounts (HSAs) and flexible spending accounts (FSAs) are two options that can help employees manage health care costs.6,7
Health Savings Accounts (HSAs)
An HSA lets employees set aside pretax money for out-of-pocket health care costs. These accounts are paired with high-deductible health plans.
For example, if an employee has a $2,500 deductible, they must pay that amount before insurance begins to cover costs. An HSA helps cover these expenses using pretax dollars, which lowers taxable income and can reduce payroll taxes.
Portability is another benefit of an HSA. Employees can take their HSA with them when they leave your company. Offering this option could give employees added flexibility and access to more cash while also reducing their tax burden when covering necessary expenses such as health care.
Flexible Spending Accounts (FSAs)
An FSA allows employees to set aside pretax dollars to help pay for medical and childcare expenses. An FSA can also reduce taxes, but unlike with an HSA, individuals must use the money they've saved in an FSA within the plan year or they lose it. However, employers can either give employees two and a half extra months to use the money or allow them to carryover up to $660 (as of 2026) to the next year.7 As an employer, you can choose to make contributions to an FSA.
Supplemental Insurance Products
Another option is to consider a supplementary insurance product that allows employees to deduct their health insurance premiums directly from their paychecks. Some of these products also enable employees to get life insurance if they wouldn't otherwise qualify. Plus, they can keep their policy even when they retire or leave the company. This may be another way to help make your small business benefit packages more attractive.
5. Offer Voluntary Benefits
Attractive small business benefit packages do not have to be expensive. As a small business owner, you can expand your benefits offering at no cost to you by adding voluntary benefits.8
Talk to your current benefits provider to see if they offer this option. Voluntary benefits are insurance products such as disability, accident, long-term care, and critical illness insurance. Employees pay for these through payroll deductions. Depending on the package, employees may also have access to services like identity theft protection and financial counseling. The cost for voluntary benefits is often lower than what employees could find on their own because providers offer group rates.
Voluntary benefits give your business a simple way to offer more choices, which may help you retain talent.
6. Support Working Parents
Offering parental leave can make your benefits package more appealing. The Family Medical Leave Act (FMLA) generally requires eligible employers to provide up to 12 weeks of unpaid, job-protected leave each year.9 Employers are covered if they have 50 or more employees for at least 20 workweeks in the current or previous calendar year.
If your business is not covered by FMLA, you may still have flexible options to support employees.
Ways to Support Employees
- Offer partial paid leave, even for a shorter period such as two weeks
- Allow part-time remote work for new parents
- Provide flexible schedules during the transition back to work
While paid time off has a cost, it can lead to stronger employee retention and improved productivity. Flexible policies can also help employees maintain a better work-life balance.
Keeping Good Employees
Employee turnover can be costly. It often costs more to replace an employee than to retain a strong one. Small businesses often operate like families, so every team member matters. It takes time to train employees and build relationships. As an employer, it makes sense to protect the time and money you have invested.
You can start with the options outlined above, but it also helps to ask employees what they value. Retirement plans are a common choice, along with long-term care insurance and disability income insurance. You may find unmet needs you can address while also helping employees keep more of the income they earn. Attractive small business benefit packages can help improve retention and build loyalty among your team.
Sources
- Long-term unemployment is becoming ‘a status quo’ in today’s job market: It’s a ‘mental war,’ job seeker says. https://www.cnbc.com/2026/02/16/long-term-unemployment-becoming-a-status-quo-in-todays-job-market.html.
- What is hybrid work: advantages and disadvantages? https://envoy.com/workplace-management/what-is-a-hybrid-work-model.
- ‘It Sucks’: Spiking Health Insurance Costs Hit Small Businesses. https://tradeoffs.org/2026/03/12/it-sucks-spiking-health-insurance-costs-hit-small-businesses/.
- Health reimbursement arrangements (HRAs) for small employers. https://www.healthcare.gov/small-businesses/learn-more/qsehra/.
- Employee benefits in the United States — March 2025. https://www.bls.gov/news.release/pdf/ebs2.pdf.
- Health Savings Account (HSA). https://www.healthcare.gov/glossary/health-savings-account-hsa/.
- Using a Flexible Spending Account (FSA). https://www.healthcare.gov/have-job-based-coverage/flexible-spending-accounts/.
- Voluntary benefits 101. https://www.coloniallife.com/employer-resource-center/voluntary-benefits.
- Family and Medical Leave (FMLA). https://www.dol.gov/general/topic/benefits-leave/fmla.
