4 Employee Benefits Your Small Business Can't Afford to Skip

Benefits are one of the areas where small businesses assume they cannot compete with larger employers — and sometimes that assumption is correct. A 15-person company cannot match the benefits package of a 5,000-person company. But it can be intentional about which benefits matter most, both for compliance and for the employees it is trying to attract and retain.

Here are four benefits where the cost of not offering them consistently outweighs the cost of providing them.

1. Health Insurance (If You Have 50+ FTEs, It's Required)

Under the ACA, employers with 50 or more full-time equivalent employees are required to offer qualifying health coverage or face penalties. For businesses under 50 employees, it is not required — but the absence of health insurance is consistently one of the top reasons candidates decline offers and employees leave. Small Business Health Options Program (SHOP) marketplace plans and health reimbursement arrangements (HRAs) can make coverage more accessible for smaller employers.

2. Paid Sick Leave (Required in Many States)

More than a dozen states and many cities now require paid sick leave, even for very small employers. Even where it is not required, not offering it pushes sick employees to come in — which affects productivity, morale, and public health.

3. Retirement Plan (Increasingly Required or Incentivized)

Several states — including California, Illinois, Oregon, and Colorado — now require employers who do not offer a retirement plan to auto-enroll employees in a state-sponsored program. Federal tax credits for establishing a new retirement plan have also increased significantly, making a 401(k) more accessible for small employers than ever.

4. Parental Leave

Federal law (FMLA) requires unpaid parental leave for employers with 50+ employees. Several states have paid family leave programs. For employers not covered by either, offering even a modest paid parental leave benefit — four to six weeks — is a meaningful differentiator in hiring and retention, particularly for employees in their early-to-mid career.