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The current cost of providing health insurance to your employees hurts. You want to do this for your team. In some markets, you can’t even attract and retain good, quality employees if you don’t offer it. In a survey of PRO readers conducted earlier this year, 49% said they strongly agreed that getting and keeping employees was a critical issue in the landscape industry. While 33% said they strongly agreed that paying for benefits in general was a critical issue, 45% cited the cost of health insurance in particular as being critical.

While about half of respondents to the PRO survey said they thought this was a critical issue, a broader survey conducted by Aflac, the insurance company with a duck as a mascot, found that 70% of small business decision makers from a variety of industries are concerned about their company’s ability to provide affordable health insurance coverage for their employees.

Beyond that, many (36%) said that their current health benefit offering has negatively impacted business, including: a drop in profitability (24%); the inability to attract new employees (11%) and the loss of good employees (7%). With employers saying they’ve lost employees because of a lack of health insurance or an inadequate or expensive offering, 37% said a high-quality, affordable health insurance benefit is the most important criteria in attracting and keeping good employees. The response was third behind compensation, 77%, and workplace environment at 47%.

Other than increasing deductibles or cancelling coverage – an option being considered by 11% of small business owners, according to a survey conducted by SurePayroll, an online payroll service provider – what can a contractor do to offer a decent benefits program?

PRO turned to Sandy Mathy, president of @butler & co., a benefits advisor in Little Suamico, Wisconsin, for advice and ideas. She came up with five prescriptions based on her work with contractors and individual employees of contracting firms that do not offer health insurance.

In a tight spot

Contractors are in an awkward position today, Sandy says. Because of the high cost of providing benefits, some are offering health insurance and some aren’t. “We have a couple of issues that are key to contractors. One is they need a core of people who are experienced because the more turnover you have on the crew level, the more important having someone with experience supervising those crews becomes.”

When she sees a lot of turnover at the entry level, she knows the employer has to keep management or team leaders because she recognizes a contractor can’t have turnover in both, which leads to her first prescription.

Prescription one.What are you trying to do for the business?

Sandy says benefits should enhance your company, not just create another expense like electricity and gasoline. “These are called benefits and we have to return them to a point where employers see them as something of an adjunct to their business plan and the employee sees them as something positive.”

She cites an example of a company she worked with that really believed that once an employee was with them for three years, they became super valuable, because after three seasons, they would have acquired a lot of experience and exposure in both the equipment operation and management of crews. “We advised them that we could create classes within his company – even if the company has 25 employees at its peak and seven at the lowest. You can create a class of all employees who have been there three or more years and another class for all employees that have been there less than three years.”

Once classes have been set, you can decide that certain benefits can be awarded to a certain class. This enables you to provide health insurance, for example, to employees with you for three years or more. “If you believe that replacing a person who has been with you for three or more years and has all this knowledge costs you, conservatively, $300 a month, would you consider going from paying that $300 a month for a replacement to $600 a month for a person who has been there for three years or more? That might cost you $300 a month more, but would the experienced employee then see that as a reason to hang around and not search out other opportunities?” Sandy asks.