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Among the greatest challenges for today’s small-business owners is managing the cost of employee health insurance and other benefits. According to a survey of decision-makers at U.S. small businesses by Aflac, a supplemental health insurance provider:
“Employers are concerned about losing employees to competitors with better benefits packages, even while they may be struggling to reduce costs and make ends meet,” said Paul S. Amos II, Aflac president and chief operating officer, in a statement on the findings. “It’s a cost-benefit balancing act.”
The study revealed that small companies that experienced a decline in revenue over the past year are particularly pressured to reduce insurance costs, cut back on employee benefits and slash employee wages. In fact, 69 percent of small companies with reduced revenues are finding it more challenging to offer strong benefits packages, compared with companies whose revenues stayed the same (56 percent).
Nearly half of small-business decision-makers (43 percent) say they are more likely to cut back on employee benefits, with 65 percent admitting they are looking more aggressively for ways to reduce insurance costs.
Employee Benefit Anxiety
While small-business decision-makers struggle with costs, anxiety among their employees is also on the rise. According to a complementary Aflac consumer survey:
Employees with young children are especially worried, with 60 percent reporting increased anxiety about illness or injury from one year ago.
The Aflac small-business survey was conducted March 9-12, 2009, among a sample of 512 decision-makers at U.S. small businesses with five to 99 employees and annual revenues of at least $100,000. The Aflac consumer survey was conducted March 2-5, 2009, among a U.S. sample of 1,243 adults, age 18 and older.
Stephen Miller is an online editor/manager for SHRM.
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