Mission to Grow: A Small Business Guide to Cash, Compliance, and the War for Talent

MTG - Mary Simmons

Mike Vannoy: [00:00:00] The 2024 HR Benchmark Report is in. I invite you to go to Asuresoftware. com, go to Resources, and download the HR Benchmark Report. Follow along as we, as we unpack the data. Here's what we did. We surveyed more than 1, 000 businesses and asked them questions, five questions in each of eight categories from pre employment through post employment.
Here's the categories. Recruiting and hiring, benefits, onboarding, development, compliance, retention, performance, and post employment. So binary questions. Do you do this best practice? Do you do that best practice? So five questions for each of eight categories. That's 40 questions in total. Asked one question at the end.
What best describes you last year? Were you a fast growth firm, a growth firm, or was it a zero growth year for you? Was it flat or did you actually decline in revenue? And then we correlate the answers. to revenue growth and HR best practices. In [00:01:00] today's episode, we're going to unpack benefits and specifically, uh, if you go to the benchmark report, we're going to talk about the benefits of benefits.
Here's what I'd say. I was surprised by the level of impact and the correlation between revenue growth and in some of the benefits questions we asked. I knew there'd be a correlation. No surprise. Benefits are important to employees. But there's two, two questions that we asked, especially to the smaller firms under 25 employees, that I was kind of blown away by the level of impact.
The punchline is the fastest growing firms in the United States get benefits. They get the impact of recruiting and retaining talent and the level of that talent. Uh, I invite you to stick around for today's episode is my guest, Mary Simmons, and I. Walk through all five questions we asked. We talk about the correlations between the zero growth firms and the fast growth firms and try to put some color commentary [00:02:00] to understanding the why behind some of these results.
Thanks for joining us today.

Mission to Grow Intro: Welcome to Mission to Grow, the small business guide to cash, compliance, and the war for talent. I'm your host, Mike Vannoy. Each week, we'll bring you experts in accounting, finance, human resources, benefits, employment law, and more. You'll learn ways to access capital through creative financing and tax strategies, tactical information you need to stay compliant with ever changing employment laws, and people strategies you need to win the war for talent.
Mission to Grow is sponsored by Asure. Asure helps more than 100, 000 businesses get access to capital. Stay compliant, and develop the talent they need to grow. Enjoy the show!

Mike Vannoy: All right, Mary, we're talking benefits today. The benefit of benefits. Um, I, I will say this is the category of all the categories in the HR Benchmark Survey. This is the one that had the results that maybe surprised me the most. Certainly expected to [00:03:00] see, uh, benefits has a positive correlation to revenue growth.
Um, you know, benefits is obviously a top concern for employees has been for a long time. I think increasingly so the data will bear that out. Um, but there were still some surprises, how impactful, especially for small businesses. What was the big takeaway that you had? What, if you had to identify one major impact for the survey on, benefits for business owners, what would that
be?

Mary Simmons: I mean, I think I agree with you that I was a little bit surprised by some of the results, but I guess as we think about it a little bit more, we do see in the news. This is what employees are looking for. Right? So I think everybody's recognizing. If there's a war for talent, how do I get that talent?
It looks like everybody's looking for benefits. It's the best way to attract and retain the best [00:04:00] talent. So, you know, I think everybody's getting that message loud and clear, which I think is good news.

Mike Vannoy: Yeah. Uh, there's a really cool stat that we, that we cite in the, in the report itself. So again, encourage you download it off the website, follow along during the discussion if you can. Um, WTW, uh, formerly Watson, Telware's, Willis, uh, uh, huge global HR consultancy and benefits firm. Um, so they would know this as well as anybody.
Um, benefits continues to, to grow in importance. And I'm just going to read a quote right from their website. So while pay remains at the forefront of attraction and retention, The survey found, their survey, not ours, their survey found benefits are not far behind. Almost half, 49 percent of employees chose their current employers due to their benefit packages, and over half, 54%, [00:05:00] stayed with their employers for the same reason.
So it, it, it, it's a, it's a massive importance to employees. It was interesting to me that, 49 percent said that was a big reason for choosing, 54 percent said it was a reason for staying. I think the grass is always greener, right? And so even when you, even when you kind of hate your job or maybe you're not so in love with your boss that day, having great benefits or having benefits period is a, is an important tool of retention and anything you would add
to that?

Mary Simmons: hundred percent. And I think it, it, part of it is, oh, I'm going to go out there and look at other employers. And then those employers may not have as good of a plan, but they may have a plan that's as good, but the employee says, but I like my doctors. And so Cigna might be as good as, you know, Oxford, let's just say.
But they have different doctors. So I want to stay with my doctors or my [00:06:00] dentists or whatever it is. So I, I think the retention piece is actually understated, uh, for two reasons, right? If you have good benefits, they want to stick with good benefits, but they also want to stay, uh, with what they know. Oh, I know how to submit my bills.

Mike Vannoy: right, right. I'm going to read one last thing here and we'll, we'll jump into our questions.

Mary Simmons: Yeah,

Mike Vannoy: Uh, in that same, the next sentence in the, in their report, two fifths, 40 percent of employees said that they would leave their employer for better benefits elsewhere, uh, in no change in salary. So this notion that employees, uh, are only going to make a move to make more money, it just isn't true.
So, uh, I would encourage people watching and listening today, Benefits is a great tool where we've known this forever to attract talent, to attract employees. but this is a [00:07:00] massive retention tool as well. So, the, data bears out that it's actually more important as a retention tool. All right, let's jump into the questions.
I'm going to rattle them off. Uh, can I maybe, maybe you give your reaction to these being, um, What we would call in fact five good best practice questions for this category, and then we'll jump into the answers. So question number one was, do you, uh, do you offer paid time off? It seems like a simple thing, but it's a benefit, right?
Uh, do you offer health insurance? Do you offer a wellness program? Do you offer a 401k or some type of a savings plan? Uh, and are you certain you're compliant with the Affordable Care Act requirements? So certainly we could have asked many more things around benefits, but you want to just comment. On how, you know, you were, you certainly participated with the team who put these questions together. What, what, what, what do you have to say about those being kind of the high level best practices when it comes to benefits?
Period?

Mary Simmons: Yeah, so I think [00:08:00] that employers have to think about, number one, uh, You know, cost, right? So your employees are looking at their total comp. They're not just looking at their salary, which is a good thing. You have an educated employee base, right? So total comp will include their benefits, but you also have a workforce that values time off, right?
So you and I were talking, you take one week vacation a year. My son, our kids are taking four weeks. That's a big difference. So that there is a monetary component there for the employer, of course, but it's a different monetary, um, component for the employee. The employee is looking at that like a lifestyle, like a cultural thing.
So I'm glad that we included PTO and we the benefits, the health care benefits in [00:09:00] this equation because It's a big deal. And the employer has to say, okay, who's, who am I trying to attract? And what's the most attractive to those individuals? So do I give more PTO, but, but don't pay as much towards the benefits.
What do I offer? What's the special sauce to get the best people?

Mike Vannoy: Yeah. So, so let's, let's jump more on that first question. Do you offer paid time off? So, of all, of all five questions that I rattled off, um, the average spread between fast growth companies. and zero growth companies. The average between all five is a 20 percent spread. It's big. So the difference, so clearly as a group, in aggregate, uh, fast growth companies clearly see the benefit of benefits, uh, compared to zero growth firms.
So, so it's a big difference. This is by far the smallest category. It's only a 5 percent spread. So do you offer a paid time off, sick [00:10:00] time, maternity leave, etc? Zero growth firms, 78%, still by far the majority, versus 83 percent fast growth. So fast growth companies even do it more, do it better, but it's only a five point spread.
This is a, we've said it before, this is a quantitative survey, not a qualitative. So we don't know how much time they give off. Um, um, it seems to me like, okay, in a tight labor market, good luck hiring anybody if you don't offer any PTO. What, what, what's your sense when you engage with clients of what the zero growth firms versus fast growth firms, what maybe, what, what is qualitatively different about their PTO
policies?

Mary Simmons: Yeah. So, and there's always going to be a compliance issue here as well. Right? So, um, I'll give you an example. I have an employer who's a manufacturer and when [00:11:00] doing his handbook, he said, I said, okay, what do you do for PTO? And he says, I don't give any. And I go, excuse me, said, I don't give any. I said, how do you hire people?
He goes, I get a lot of employee referrals. If they need to take time off, they take it without pay. You're in New York, so you have sick time, New York sick time. So you minimally have to give that. And I will tell you, even though he resisted. He now sees the benefit of it, and he says, now, because I tell them they get five days for sick pay, that's, you know, based on the amount of employees that he has, he said, it's, it's more controlled.
People are happier, but believe it or not, they're taking less time off. So, you know, it, they It's very important to be compliant, but you will, you also have to give your employees [00:12:00] or your candidates a good reason to work for you. Uh, everybody needs time off to reset, recharge, take care of family, right? So, uh, I can't imagine not giving any time off, but there are, you know, nobody mandates vacation.
It's only sick time that some states
Mike Vannoy: Oh, it's interesting. I've got two thoughts going through my head. One, you know, no surprise, you started with compliance. Uh, that we didn't ask that, and this is a national survey. So, um, maybe comment that this is, you and I have discussed before, this is one of the fastest changing areas of HR regulation is time off, paid time, uh, non paid time.
Uh, state and even regional based FMLA ish kind of plans.

Mary Simmons: Paid family leave.

Mike Vannoy: yeah, right, right. So, so, so maybe, maybe just paint a picture. What's [00:13:00] what's happening in the trend. Cause like, you know, New York is one thing, California and all things kind of flow to the middle. What, what are the major trends that you're seeing briefly first, I
guess.

Mary Simmons: Uh, so you have more. You have close to half of the states that have mandated sick time. So believe it or not, it's, it's not just New York and California anymore. And then you also have about a third of the states that have a paid sick or family leave. So we know there's FMLA, uh, which is a federal leave, but that's for 50 employees or more, and it's unpaid.
So a lot of states have said, Well, that doesn't work. What if you have a family member or you have, uh, something and, you know, that particular state. There's only about 20 states that have state disability. Um, so what, what does the employee do, right? So they have paid [00:14:00] family, uh, leaves that are a lower threshold.
Uh, and again, it has pay instead of, uh, no pay, just job protected like FMLA. Okay.

Mike Vannoy: not to go down a rabbit, not to go down a rabbit hole, but this is why a group, you know, one of our favorite topics is just the simple thing of an employee handbook, which isn't quite so simple and where people get in trouble when they just create their handbooks from Google. Uh, your PTO, your paid time off policy has to reflect.
State and local regulations as well, right? So you, you don't want to, here's my PTO policy. Here's the state regulations and they're not in alignment together. They need to dovetail each other so that, so that it makes sense financially for you and for the employee, you could easily get yourself in hot water where I offer this time, you're out of sync with what the state provides.
All of a sudden you're a small business. People taking. leave according to your policy and according to what the state says they are entitled [00:15:00] to and you can't get the work done and it's costing you a fortune because you didn't think about, uh, you didn't put together a thoughtful PTO policy. Anything else you'd say on
that?

Mary Simmons: I'll tell you, I have a lot of small employers and it is difficult to, um, meet these mandates, right? And still operate the business. But I say, well, we have to do it. We don't have a choice here. So let's leverage it. And, um, yeah, You know, a lot of them don't even put it in their ads. I said, if you're in a state that mandates sick leave, that goes in your ad.
That's part of your attraction. Yes, you have to do it, but not all employees know that. So let's leverage it. And I, and I would also say that I point back to that other employer. He, because the employees, although they had to take it without pay, he let them take whatever they wanted. And some of them, it was three weeks a year.
Now it's five days, six weeks. He said, time off went down. He said, I [00:16:00] have to pay for it, but the time off went down. So productivity went up. Net, net Mary, thank you.

Mike Vannoy: Yeah.

Mary Simmons: Even though it had nothing to do with me, it was a state requirement, but, um, you kind of have to find that, that balance, right?

Mike Vannoy: You and I should do a show on another day. Uh, there's a real trend towards unlimited PTO. That's a bit of a controversial topic, but I don't think we have time for that today. I want to move on to the next question. Um, Yeah, I'll move on to the next one. So, uh, a much bigger spread. So the average, remember, is a 20 point spread.
We just covered the smallest spread of just 5%. Do you offer PTO? Uh, knowing that it's going to vary widely how much they offer. This next question, do you offer health insurance? Again, this is quantitative, not qualitative. We didn't ask how rich the plan was. Right? We didn't ask what the deductibles were.
So, but it's just do you or don't you? And, and here I took an, we took an extra look at, [00:17:00] uh, uh, all companies and, uh, much smaller companies, zero to 25 employees. So do you offer health insurance? Zero growth companies, 66%. So obviously the sampling here is smaller companies because the Affordable Care Act would say over 50 employees you have to, so lots of small businesses reply to the survey.
So 66%, fast growth 90%, 24 percent spread. What's really interesting to me here is when I, when I, when I, when I carve out a cohort of smaller firms less than 25 employees, Okay, the law doesn't require them. They're under 50 FTEs, so they don't, the Affordable Care Act doesn't require them to offer benefits. and it shows up in your zero growth firms at 45 percent.
But the fast growth firms, the 80 percent of the under 25 employee firms, they still offer it, 80 percent. So it's not even that big of a drop off. [00:18:00] Um, this is one of the stats I expected to see that correlation. I didn't expect to see that big of a gap. What's your thoughts here?

Mary Simmons: This might be a big leap, but I'm, going to say it anyway. There's a difference between attracting talent and attracting the best talent, right? So if you're, if you just want to fill the seat, you can pretty much fill the seat with zero vacation. PTO and no medical benefits. But if you want to attract the best talent, those are the people that know what's available.
They're talking to, you know, friends and family, and they've interviewed at other places that say, even though I'm a small company, I'm going to give you a generous PTO and I'm going to give you time off. Those are the people that you want. It is worth the time. Your investment, right? So we want the best talent and we want them to stay.
You have to offer the [00:19:00] best benefits. There's, no other way around it. Like even pay isn't going to keep them because at some point you don't feel appreciated when you don't, aren't given benefits by your employer.

Mike Vannoy: Yeah. Well, well said. Uh, I'm just going to assume that these fast growth firms, it's not just more of them that offer benefits. And again, 45 percent of zero growth, 80 percent of fast growth for the under 25 employees. Um, massive spread, 35%. I'm just going to assume it's, it's, it's, there's another layer.
Just what you said. It's those, the benefit plans. I bet they're better benefit plans, right? They're not the legal minimum requirements. Uh, they're, they're skin and bones. These are like, Hey, we love you employee. We want to make your life as easy as possible. We want only the best we're going to expect. The best from you.
We're gonna expect a high level of performance, uh, that only somebody of your [00:20:00] caliber can bring, but we're gonna reward you for that. Right. That, that shows up in revenue growth.

Mary Simmons: 100%.

Mike Vannoy: Yeah. Um, okay. We're gonna go a level deeper. The next question, um, was do you offer a wellness program before I even share results?
What? Do you think the average respondent, and I'm asking you to be a mind reader here, Amir. What, what do you think the average respondent, how they interpreted that question, what a wellness program even
is?

Mary Simmons: Yeah, I'm not, I'm not sure that, that every respondent understands that question. I can't imagine what they, but they probably mean, you know, do I do a contest for them to lose weight? You know, do we, you know, walk at lunchtime? You know, some of those super easy, super quick things, which are all good. I

Mike Vannoy: Do I offer fruit in the break room? Right. I mean, that's my

Mary Simmons: Yeah, yeah, yeah, yeah. No [00:21:00] birthday cake just for birthdays. Um,
and, and again, it's, it's all good. Um, I would just say that when it comes to a wellness program, the statistics are overwhelming that a healthier, happier workforce is more productive, right? So, you know, and don't forget if you're offering, Health care benefits.
You want those, uh, you don't want, you know, obesity, diabetes, right? So if you're doing some wellness, you might stave off some of those huge health care costs for some of those, um, very tough, uh, medical issues.

Mike Vannoy: So, so there are lots of forms wellness can take. Um, it could be Uh, it could be a smoking cessation program. It could be in your mind, maybe it was fruit in the, in the break room instead of, uh,

Mary Simmons: Financial health, it could be a lot of different

Mike Vannoy: right. Um, could be a full [00:22:00] blown EAP employee assistance program. It could be lots of things. I'm going to make the assumption again, quantitative versus qualitative survey.
I'm going to make the assumption. A lot of these wellness programs are included, embedded as part of people's health insurance plans. Is that, you think that's a safe assumption?

Mary Simmons: I think it is, but whether they're embedded or not, they have to be exercised. Right? So you have to have somebody at the company that's championing this and saying, okay, now we're going to do right. So there is a lift on the company side. There's no question. But I would also say that it has something to do with culture, right?
Because all the things we just mentioned, um, It's, it's a, it's a, you know, camaraderie, you know, we have a healthy competition going. So, you know, all of that is important. That gives me a reason to go to work, right? Because I want to weigh

Mike Vannoy: There's an

Mary Simmons: to be the winner this week.

Mike Vannoy: intentionality, a proactiveness about it, right?

Mary Simmons: A hundred percent.

Mike Vannoy: Yeah. [00:23:00] Um, and the reason I go down this path is, you know, we just got done talking about health insurance. 24 percent spread across all companies. Uh, 35 percent spread for the under 25. So. Um, clearly big impact for fast growth firms that offer health insurance.
But we, we, we alluded to the fact that our gut said, Hey, they're probably not just more of them, but they're higher quality plans. I suspect that a lot of these fast growth firms, they aren't, they aren't carving out some separate wellness program, but they're probably working with their insurance broker to include wellness programs, which aren't free.
As part of their health benefit, and that's probably why it speaks to the added impact, and here's the impact. It's a 37 percent spread. Do you offer a wellness program? Zero growth to fast growth. So, it's, uh, it's the largest spread in the entire survey. [00:24:00] 37 percentage points. I expect it to be big, not quite that big.
Uh, and I think that speaks to the qualitative that the, the, the health insurance plans are just simply richer, better plans that the fast growth companies are offering their employees. And I love where you went around the talent, what kind of talent. What I didn't expect, and this is a big surprise. I expected when you went to the under 25 employee space, They just don't maybe have as much revenue to spend in the form of health insurance and benefit programs that I expected, uh, both, uh, both fast growth firms and zero growth firms to drop somewhat proportionately.
They did not. Uh, they did drop in the zero growth. So zero growth across the entire population, 37 percent said, yes, we offer wellness. 15 percent of zero growth said we offer wellness. Uh, uh, uh, for the under 25 space, but for the fast [00:25:00] growth firms across the entire gamut, it was 74 percent said, yes, we offer wellness still, still 58 percent of small firms offer it.
It's a 43 percent spread. That is the, that, that's the biggest one, biggest spread in the entire survey. So a massive difference, even small firms, Mary, I think it's seeing what you said. It's it's. Not just, am I going to, is this going to help me attract and retain a warm body, but is going to, am I, am I attracting and retaining the right people?

Mary Simmons: Think that a lot of the small firms also think this is going to be really expensive. Wellness? I don't know. That sounds expensive. But it, it can be free. It can be, you know, a free benefit, right? So you can get somebody to come speak at a Lunch and Learn, an educated, you know, person on different topics for free.
Your, your benefits broker will come and talk [00:26:00] to them, uh, for free about the reason that they should enroll in, in, in the program, and even if they don't have benefits, you could get, uh, you know, a healthcare professional to come in. For sure, if you have a 401k, that person will come and speak to them about the 401k.
So it doesn't have to
be expensive at all. It just has to be intentional.

Mike Vannoy: You could have, uh, a wealth advisor. They'll line up at the door to come speak to your employees for free.

Mary Simmons: at the door.

Mike Vannoy: Cause they, cause they want clients. And so they want to offer free advice to help your employees in their financial wellness. You can have nutritionists line up at the door to teach your employees about how to live health, healthier lifestyles, because they want, they want clients and you're just offering free marketing to them and a free value add to your employees.
You're right. This doesn't have to be expensive. It doesn't even have to
cost you a penny.

Mary Simmons: Right. And most, most, you [00:27:00] probably have, there's plenty of government agencies that will come. I know we've, we've arranged it multiple times. There's, you know, suicide prevention and there's nutritional programs within the towns of these organizations. You just have to do a quick Google search and you'll find it.
Like you said, speakers all day, every day.

Mike Vannoy: Yeah. Yeah. Um, yeah. I want to park on this topic a little bit longer, uh, than perhaps some of these other ones. You, you went there earlier in the conversation and I want, I want to go deeper. I almost see this as two separate things. There's the, there's the attraction and retention of talent component. Do you offer wellness because talented people are going to want it in the most talented people are going to have choices.
So they're going to want the best plans. So off, right. But say more about the actual [00:28:00] productivity from a healthier workforce.

Mary Simmons: So if I'm out of work, I'm not productive, right? So, um, the statistics will say, of course, that, you know, those, first of all, the cost of the organization when an employee is out of work is astronomical, right? So number one, if it's for a health reason, now they're using my health benefits, whenever those.
Health benefits are an insurance for, for an organization, right? It's healthcare insurance. And we all know what happens when there's claims to our insurance. We get into a car accident. My rates are going to go up. You have a lot of, of unhealthy employees. Your rates are going to go up. They're going up probably anyway.
So you don't want them to go up astronomically, right? So my one cost is my health insurance is going to go up. My second cost is I have an employee who's not in [00:29:00] work. And if you're not in work, you can't be productive. Now, let's just take it a level lower and we'll say that employee does come to work, but they don't, but they're not healthy, right?
They don't feel good. They, um, you know, are, are depressed, right? So there's, you know, let's, let's not ignore, uh, you know, the mental component as well as the healthy component. We have to take care of our mind and our body. Um, so now our productivity is low. And I would just say that the organizations that don't have wellness and don't have benefits.
Your employees are still coming to work sick, right? Because they don't have health insurance. If they don't have it with you, they should have it elsewhere, but they don't always, they can't afford it. So now they're like, well, I don't have health insurance. Right. And nobody's teaching me to take care of myself.
Right. Cause there's no wellness programs at my organization. So I'm coming to work. I'm [00:30:00] not productive. And Oh, by the way, I'm getting everybody else sick at the same time. So, you know, a little bit of money and prevention goes a long way for organizations.

Mike Vannoy: Yeah. You know what? So I'm trying to capture, I think you hit it beautifully. So there's the real cost. Your, if your employees are out sick, that means they're making insurance claims. Some of those claims might be just doctor's visits because they're out with a cold or have a sick child. Um, but they could also be a stroke or a heart attack.
And those claims are really expensive in a healthier workforce. Statistically, they're just, they're not going to have those expensive claims. So cost number one. Number two, very expensive to have a, especially a salaried employee, uh, that's out of work. They're, they're, they're not. They're not performing work if they're out sick.
That's, that's self evident, right? [00:31:00] the working sick, that's a, that's a, I think a, in, in, uh, I love it that you included mental health. The working sick, whether they're feeling under the weather or they're just not in a good headspace, how productive are they, right? If, if they're not in, if they're not, don't have mental health.
Um, and My word's not yours, but you said it earlier, you talked about culture. When, when you have guest speakers talking about financial wellness, you have nutritionists coming and talking about health. When you have, uh, the local gym, uh, come to try to, you know, they want to sell memberships, but they can, 15 minutes at lunch.
And anybody who wants to sign up for your gym, they can, but I want you to talk about the benefits of strength training, right? Those things cost you nothing. You're creating a culture of accountability because I, I know that I'm overweight. I [00:32:00] know that I just need to eat better and work out more. Right. I need to be, have a better sleep schedule.
I mean, I don't need the speaker to come and tell me these things, but if I'm surrounded by an environment of accountability, a culture where others feel the same way versus if every day is, you know, uh, cake at lunch and we don't walk during breaks, uh, that's a very different
culture, right?

Mary Simmons: Well, and I, I think everything you just spoke about, um, tells our employees that we care about them and that's, that's really important, right? People will, you know, you can't never minimize culture. People will stay for the culture cause they like, uh, where, where they're working. So all of that shows that they're really concerned.
And the one other thing that I would add is, You know, giving leave not just for my sick time and wellness programs, not just for my sick time, but don't forget to [00:33:00] bring in the elder attorneys, right? Because caring for, you know, elderly parents really is taxing on your staff. So, you know, is there time off for me to, to, you know, You know, take a parent to a doctor's appointment.
Is there, um, you know, a wellness program to help me deal with, you know, mom's house, what do I do, what do I do with mom's house? So. It's a big deal. Um, all of these things matter.

Mike Vannoy: Yeah. Right. Well said. Caregiver fatigue is a very, very real thing.

Mary Simmons: Huge.

Mike Vannoy: And beyond the fatigue, just the, the, the, the during business hours kind of work you have to do that, that takes away, right? Um, all right, I'm gonna move to the next one. Um, And I'll say this is similar to wellness, uh, that it's really surprised me specifically.
We went into the cohort of [00:34:00] the under 25 employees, uh, and it's, it's 401k maybe before jumping in the stats. What, what do you see in your practice as you, as you talk to small businesses, medium sized businesses, uh, every day, how are they thinking about, I'll, I'll use the, the, the, A follow up from our wellness.
How are they, how are they thinking about retirement planning and financial
wellness for their employees?

Mary Simmons: Yeah. Which is definitely part of wellness, right? So, um, again, now we have, I think we're up to 26 states that mandate 401k. So even if I'm not in one of those states, again, you have a very educated workforce these days, right? You know, social media is, is, you know, helps with that. And I think it's a good thing that, that, that exists.
So financial wellness, I have employers say, Mary, you know, we need to use your 401k, can we get it started? My employees are [00:35:00] asking for that. I did not hear that 10 years ago or five years ago, right? So, and, and I'm not just talking, I'm talking manufacturers as well as professional services, right? So maybe in your professional services, they were thinking that, but I think you have more people, uh, more of your candidates and more of your employees who are thinking, gee, I better take care of myself, you know, later, later in life, you Hey, Mr.
Employer, how can you help me? And 401k is a big piece to that.

Mike Vannoy: Yeah. No, no question. So I'll walk through the numbers. So the question, do you offer a 401k plan? So across the entire audience is 1090 respondents. So really big sample size, zero growth firms, 50%. So half, uh, said yes. Fast growth firms, 74%. So a 24 percent spread is really, really big. Um, [00:36:00] this is the, this is maybe the most shocking stat to me of the entire survey of all eight categories.
Um, when I look at the, at the under 25 employees, again, I, I know that there's a perception around that smaller firms can't afford 401k, uh, between technology being complex, the plan sponsor. Uh, liabilities is complex, and then the cost, uh, it's not a surprise. 401k has historically been more of a big company benefit than a small company.
It's certainly trickling down. I think most small business owners still just have no idea how simple it actually is. Uh, you know, firms like our partner vest, well have just, they, they've demystified it. They've made the technology a non-issue. Um, it's so much simpler, more cost effective, there's tax credits involved now, people can put plans in place for free, that world has changed a whole bunch.
But the gap between the zero growth and the fast [00:37:00] growth firms for the smallest companies, under 25 employees, um, massive, right? And so, Zero growth firms across the whole sample, all thousand plus firms, 50 percent went to 32 percent for the fast growth firms. The entire sample went from 74 percent and we went down to 73%.
What went down one percentage point. So it's still this 41 percent spread. That, that was what blew me away that the entire sample size, when you only went down one percentage point. When you went to the under 25 employees, meaning the fastest growing firms in the United States, they all know the criticality of offering 401k.
What, how surprising was that to
you, Mayor?

Mary Simmons: Yeah. I mean, I, I was surprised as well, but then when I, I guess when I thought about it, you do have a lot of mandated states. Um, and I think, you know, like I said, [00:38:00] if you're right next to a state that is mandating it, you might have employees, you know, that are in that state. I just think people are, that, that financial wellness piece is becoming more and more important.
You know, a lot of, a lot of talk about what's going to happen to social security. You have inflation, which scares people. It won't be around forever, obviously, but it, it scares people. So I think for all of those reasons, um, You know, it's something that employers, like you said, everybody, every employer can afford it, especially with the tax credits.

Mike Vannoy: Yeah. Um, how do you think, how, what, what are the, some of the best practices that you're seeing at the fast growth firms, especially, uh, how they, how they maybe see 401k is this category in and of itself? Like, Oh yeah, everybody wants 401k versus really treating it as financial [00:39:00] wellness. Cause, cause there's a financial wellness crisis.
There's a savings crisis. There's a financial wellness crisis where in our country where inflation has gone up much faster than wages have, uh, in just simple stuff like groceries and gas. It is much more painful for, for so many people today than it was just
a few years ago.

Mary Simmons: Yeah. I mean, I, I also think, I think part of it is people are actually now thinking about retirement. I don't know about you, but when I was first starting in my career, I wasn't thinking about retirement at all. but the, Gen Zs and Gen Xs are thinking about retirement, which is very interesting to me.
Um, maybe cause they, They, you know, are so concerned about time off. They're already thinking when is this all going to be over and I'm going to retire. I think it's a great thing. I think it's really refreshing. And that's why a 401k is very important. So this is something on an ad [00:40:00] that is significant to attract the best talent, because now you're helping them, you know, with their future.
And I would say, It helps with retention. You know, a lot of it could be a portable plan for sure, but that doesn't mean the employee wants it to be. They're like, Oh, I have the 401k there. I'm just going to keep it there. It's easier. You know, one more reason for them to stay with you.

Mike Vannoy: Yeah. Right. Right. Um, we, I just did a show recently with our, uh, uh, partner. We've done a couple of them now with our partner from best well, and just talking about, uh, specifically some of the tax credits, I know you're, that's not your world, but there are, there are tremendous tax savings programs out there.
The Secure Act 2. 0. Um, that basically, uh, uh, allow you to get tax credit for all the setup fees in early on, even all the matching. Um, invite everybody to go check those shows out. If you don't have a 401k, it's almost become a no [00:41:00] brainer that you really should. And in a lot of these States that with the mandates, the 26 States. More technically, it's very state by state. They'll say a mandated retirement plan. A lot of times that might be a state sponsored IRA, which isn't nearly as good as a 401k. So lots of reasons why employers should be looking at 401ks that aren't. It's almost become a no brainer. There might be some, some reasons, legit reasons, but Everybody should be looking at this hard.
The one area that, that was, there's a provision in Secure Act 2. 0 that I do want to touch on with you, um, is allowing tax credits for employers to offer tuition reimbursement as a, as a component. So instead of just say, Hey, here's my matching for 401k, I can actually, as an employer, help with tuition, tuition reimbursement.
How should employers be thinking about leveraging that from an HR perspective from a talent
strategy?

Mary Simmons: [00:42:00] Yeah, so that that definitely goes on your ad. That is very attractive. We all know that talk about inflation. I mean, the, you know, college costs have gone up, you know, way ahead of inflation. I really, it's, tremendous. Really expensive. So that is a huge benefit. That is, and it's definitely going to attract the best people, right, Mike?
So somebody who really wants to grow in their career, wants to be the best at their career, wants more education. so that is going to attract them. And it's also going to retain them because if you're paying for my master's degree, I'm not leaving until that master's degree is, done. And you can do a promissory note for sure.
Sure. but I can't talk enough about it. Look, if you have a more educated workforce, they're also going to help you grow right now. You have all this knowledge that this, you [00:43:00] know, individual or individuals has that is going to, you know, you know, infuse into your business and just help, help you grow new ideas, new thought process, et cetera.

Mike Vannoy: Yeah. I want to move to the last question and then we will expand that into a broader topic because it is around compliance. We specifically asked, are you certain you're compliant with Affordable Care Act requirements? Um, 75 percent of zero growth firms said yes. 85 percent of fast growth firms said yes.
That's a 10 percent spread. The spread expands to 19 percent when I, when we look at the smaller companies, which kind of doesn't even make sense. It was really interesting. So when we did this survey, we asked, you know, it's, so it's the five questions for each of eight areas of employment from pre employment through post employment, Um, and they're all binary, yes, no, then we ask that last question, best, what describes you last year, uh, flatter shrinking versus growth versus fast growth.
[00:44:00] So we can correlate revenue growth to HR. You get that. So there's some questions that almost doesn't make sense, right? Because then I additionally did, I cut the data based on employee size. So to ask the question for people under 25 employees, are you sure you're compliant with ACA Affordable Care Act?
What, what is it about that that doesn't even
make sense, Mary?

Mary Simmons: That they understand it and they're not, uh, they don't have to, you know, adhere to it. So, um, that they said yes is, I mean, I guess you could assume that they were like, yeah, I don't have to do it. Um, but it's a little suspect for sure.

Mike Vannoy: A hundred percent. And so maybe this was a flaw in the survey, but like it, it totally applies. Hey, my smaller firms, 125 employees, do you offer PTO? Do you offer health insurance? Makes sense for all that. On this one, what, what take 30 seconds. What, what are the regulations around
ACA compliance?

Mary Simmons: Well, you have to [00:45:00] offer a plan, um, you know, if, if you have 50 or more employees, but there are, you know, this could be a whole nother hour. And I do, I think you did 1 on

Mike Vannoy: You and I have done at least one or two or three shows on
ACA and,

Mary Simmons: yeah. So, you know, there is, you know, different variables, uh, that you also have to meet. Um, so this one, you know, this is more, less employee focused and more on the compliance side and more on you don't want to get fined. These fines are real and they're looking for you. 100%. So, um, you know, there's, there's a lot of little things about ACA that employers may not be aware of, right?
So if, you know, part, part and parcel, uh, you know, there's, there's different regulations when the employee terminates that you want to stay in compliance [00:46:00] with as well. So this is more compliance and, you know, you're not going to grow if you have lots of fines, so you better be compliant.

Mike Vannoy: Right, right. It's interesting. So you're right. People could have said yes, because, Oh, that doesn't, they know it doesn't apply to me. It's only over 50 employees,

Mary Simmons: Yeah.

Mike Vannoy: but it really just does. It speaks to something that you and I talk about all the time. It's people think they're compliant and have no idea that they're not right.
Right. So, so let's, so now I want to back up. So we asked that question on ACA. What, what are the compliance traps when it comes to benefits? We've talked health insurance. We've talked leave types. I think that's probably going to be the biggest one you're going to go down. Uh, wellness 401k. Where are the, where do you see employers getting in the most trouble when it comes to benefits and compliance?
Yeah.

Mary Simmons: issues are what we always talk about, which is inconsistencies. So you can offer different [00:47:00] benefits to different, um, sections of employees with, you know, some parameters, right? So if you're ACA compliant, there's definitely parameters around that around that. Um, but when we start saying, oh, I'm only going to give.
Mike was really hard to, to attract. So Mike is going to get, you know, six weeks vacation. And then I hire Mary, uh, and she wasn't that hard to hire. She was, she signed pretty quickly. Uh, I'm just going to give her four weeks and we're both, you know, marketing assistants, let's just say we have the same position, that's where we get into trouble and I see it every, actually two weeks ago, I had an employer call me and I'm asking you this because I feel like this is a problem, but I just want to say, and it was PTO, right?
You had a, you had a person who said, I'm not [00:48:00] coming. They only gave two weeks vacation in the first year. Person said, I'm not coming unless you give me four weeks. And they're like, well, why can't I do it, Mary? Because I, feel like, you know, I had to do it to, to attract this person. I said, you know, and, and they were like, I know what you're going to say.
And I said, it's not consistent. And they're like, yes. So the inconsistent, we don't want to show that we're discriminating, right? So there's, Uh, laws on the compliance side that we have to adhere to federal, state and local. And then there's also, we want to, you know, 1 of the other big laws, obviously is the EEO, um, the EEO policies.
We don't want to look like we're discriminating.

Mike Vannoy: I'm glad you split it in those two buckets because I see it the same way. I'd say can't cover in a call like this because it's so nuanced by geography. Um, but again, leave types in paid [00:49:00] or unpaid, but leave types, especially paid leaves is probably one of the fastest evolving areas of HR compliance. So you just, That's binary.
You have to, you don't get a choice to not follow the law. It's your responsibility to know what the law is. So, uh, you work with somebody like Mary's team or some, your attorney, you're, you got to get that figured out. It's this strategic compliance. There's not a law that says two people must have the same PTO.
Tell me if I'm thinking about this right. There's not necessarily a law that says, uh, Two people have to have the same PTO, uh, just cause this one person accepted the job and this person negotiated harder. more of a risk. mitigation. I'm setting myself up. Am I setting myself up that I can defend my policies?
Is that the right way to think about
it?

Mary Simmons: Perfect. That's exactly the way I would do it. And if you, you know, have the [00:50:00] documentation. You know, there's, there's examples. And again, you know, there's so much gray area when it comes to things like this, but that, I think that's a perfect way to say it, right?

Mike Vannoy: Yeah. Yeah. I was, I was part of a business once, um, where, uh, we got sued. for retaliation because we changed. So it was a small firm at the time we were, we were growing. Um, and, uh, a male colleague got one treatment and a female colleague got the other treatment. I know that there was no bad intention there, but, but this, this young lady, she felt aggrieved and she thought the reason she got different treatment, even though leadership.
Actually thought they were giving her a better opportunity and, and we're managing different for her to have, give her more opportunity. It was perceived in all of ads, all matters that it was a [00:51:00] gender based decision. Yeah. And that's all it took. And it was, uh, the firm, uh, prevailed, but you know, 30, 40, 000 legal fees later to prevail.
Um, uh, consistency is kind of. the hallmark
here for HR, right?

Mary Simmons: It is. And it's, you know, and I don't, I don't want to say, I don't want, uh, listeners to think I have to be consistent, so I don't get sued. It's the right thing to do, and it, you, you're not going to have a positive culture if you're not consistent. You might not get a lawsuit, right, if you're inconsistent, you might not.
What you should be looking at is, again, everything we're talking about, retaining, Attracting and retaining the best talent and driving towards your goals. Don't, don't do these things just so that you don't get a lawsuit. I want you to see the [00:52:00] monetary reward, which is part of the reason that you did that survey, the fast growing companies, uh, have these things in place.
So, you know, the, There's a negative if you don't do it, but I also want you to focus on the positive because a lot of times people are like, I'm not, I'm not going to get caught. I'll take that risk. The other side is, it'll help you. There's a positive side.

Mike Vannoy: Yeah. Yeah. what would you say in closing? So we, we titled, so in, in the, in the benchmark report, we titled this sec, the, the, part of the executive summary, the beginning, the benefit of benefits. Um, I mentioned at the top that this is one of the areas that has the greatest differentiation across all others between zero growth firms and fast growth firms is how they, how they approach benefits.
And we, we, we talked through the five questions. So [00:53:00] statistically, we know that this is a big driver of success. What would you say in
closing?

Mary Simmons: I would say that even though the statistic says salary is the number one driver, I would say this is neck and neck for a lot of people, right? So, um, you gotta, if you have the benefits, if you have benefits, you gotta make sure that they're compliant, number one, and that includes consistency, as we just said.
Look at what you're, your, uh, competitors are doing. So we do salary benchmarking. Uh, you can also do benefits benchmarking and any broker will do that. I know a shore brokerage can do that and say, you know, what's everybody else offering, right? So you have to be competitive and you have to leverage it. If you're not putting it into an ad and you're not talking about it and you're not, you know, uh, having lunch and learns to keep people healthy and, engaged in the benefits you're [00:54:00] offering, uh, then they're not going to help you grow, right?
It's not enough to just have them. You have to have the best, the most competitive, and you have to talk about it and make it, make all these benefits intentional.

Mike Vannoy: I think that's so critical. I mean, don't lose sight of the fact that there's marketing involved here and it's not, it's not misleading marketing. It's genuine, just good, effective communication, right? Um, we all know that if we get a gift from someone in the form of a card filled with cash versus that equal value of a gift, maybe we'd like the cash.
so much. But you remember the impact of the gift, especially if it was a thoughtful gift, right? It was something, oh, I got this for you because I knew that was really important to you. I'm not saying health insurance, wellness plans, 401ks maybe has that level of connection, but if you are proactive, if you are intentional about [00:55:00] creating a culture that is healthy, uh, mental health, physical health, financial health.
You're sending a real signal to your employees that you care, and that goes a long, long, long ways
towards revenue.

Mary Simmons: Yeah, and I would say it's even more important for a small employer because if you only have 25 employees and your key person leaves, that affects you more than a company of a short size where we have, you know, close to 600 employees. One person leaves, every person matters here, but it's not going to affect us as much as a, you know, a smaller firm.
So, uh, don't minimize the, the importance of the benefits.

Mike Vannoy: Mary, I always love talking to you about this kind of stuff. Uh, great topic today. Look forward to the next show we do on the HR Benchmark Report. We're going to continue to unpack chapter by chapter. So, uh, [00:56:00] our last show on this topic was recruiting and hiring. Today, we covered benefits. Our next will be onboarding.
We're going to talk about the differences between fast growth firms and zero growth firms, how they treat the onboarding process. Thanks, Mayor.

Mary Simmons: Thank you.

Mike Vannoy: To everyone else, if you enjoyed today's show, if you got value from today's show, uh, I invite you to share, comment, like, and subscribe on the platform of your choice.
Until next week, your mission to grow.

Mission to Grow Outro: That's it for this episode of Mission to Grow. Thanks for joining us today. For show notes and more episodes, visit us at missiontogrow. com. If you found this content valuable, I invite you to share it with a friend and subscribe to the show. If you really want to help, I'd love it if you left a five star review on Apple Podcasts, YouTube, or wherever you listen.
Mission to Grow is sponsored by Asure. Asure helps more than 100, 000 businesses get access to capital, stay compliant, and develop the talent they need to grow. [00:57:00] To learn more about how Asure can help your business grow, visit AsureSoftware. com. Until next time.