Small companies find providing health coverage retains qualified talent

In today’s economy, it’s big business running a small business for many owners.

As the backbone of any thriving community, small businesses are big-time players in helping to sustain our national economy. More than 33 million small businesses nationwide employ 61.6 million workers, or nearly 46% of the country’s workforce, according to figures recently released by the U.S. Small Business Administration .

From providing a profitable service or product for customers, to offering and maintaining a competitive health benefits and compensation package to attract and retain qualified workers, small businesses have their work cut out in the recruiting arena.

In 2015, Jeff Patton, president of Meridian Plumbing, purchased the plumbing operation that has been a highly recognizable part of the Treasure Valley business community for 40 years. His first order of business was to shift the work focus from new construction to a service-oriented approach.

However, he said he knew that such a move would also require drastic changes regarding wages and benefits to find and secure talented workers to grow the company and help keep the venture flowing forward.

“When we bought the company there were seven full-time employees, one part-timer and no benefits,” Patton said. “There was no overtime, little holiday pay, no vacation, no retirement and definitely no health insurance.”

Today, the company employs 20 full-time workers who receive a 5% match dollar-for-dollar for 401(k) investments, three weeks PTO, six paid holidays, yearly anniversary bonuses and health insurance that covers 100% of premiums for employees.

“If you want to attract and retain good employees you have to have that,” Patton said.

A recent study published by the National Federation of Independent Business highlighted the crucial connection between companies that provide solid health coverage and those that don’t.

“Health insurance is something you have to offer,” he said. “Every service company in the valley has been fighting over the best quality employees in town, whether they are already here or if they’re moving in from out of state. Health care is a big part of it.”

As a new business owner at the time, Patton said one his first “educational moments” overseeing the operation was the realization that health insurance was a market driver.

“I do everything I can to stay as efficient as possible to make sure we only raise prices when we have to,” he said. “And the fact that I know my competition is offering decent, competitive plans, I have told my people I want our compensation package to be one of, if not the best in the valley.”

And when forced to deal with rising health care costs, Patton said his options come down to two choices: Eat it or pass it on to his employees.

The former military veteran said he’d rather take the hit, even if that means cutting into the company’s bottom line.

“With costs going up, I want to help my people keep up with inflation,” he said. “Even at the expense of accepting a lower margin or even staying flat at times just to make sure we can stay in business.”

Looking out for his workers helped play a key part during the COVID pandemic. While staffing was not impacted, Patton said the way his workers performed their work did encounter some bumps in the road.

“As a service plumbing company, we were fortunate to stay open during that time,” he said. “But it was nerve-wracking to say the least.”

And though some customers were adamant about his workers masking up to enter their homes, others he said would refuse to do business with them if they thought “Meridian Plumbing believed in all the COVID nonsense.”

“Either way our message was, ‘we’re just trying to keep our guys employed, food in their pantries, take care of your plumbing and respect your home,’” he said. “It was an interesting social experience to watch.”

At the end of the day, Patton said offering the right benefits is what benefits small businesses.

“When you start attracting better people who are self-reliant, respectful and accountable it makes managing the operation a lot easier,” he said.

At Alarmco, Inc., CEO Corrine McKague has operated the only publicly owned Underwriter’s Laboratory (UL) central station for security monitoring in Idaho since 1994. Her group provides services for security, fire and closed-circuit monitoring systems.

Based in Boise, the group manages 300 corporate and other government-related accounts nationwide. By performing work coast to coast, the firm is an official signatory of the International Brotherhood of Electrical Workers (IBEW).

Providing top-notch benefits to employees is the easy part she said. Locating and securing talented workers is the difficult part.

“For us it is very hard because there is no school that sends people out fully trained to do security and fire systems,” McKague said. “We have to find people all across the country and then train them. Locally, it is hard to find these workers.”

And she said they accomplish it all with a staff of 30, after initially opening their doors with only seven workers 30 years ago.

“Our work takes us anywhere,” McKague said. “Some remote workers go wherever we need them. And because we are a signatory with the IBEW, we can pull from their labor force anywhere in the country.”

Though finding gifted minds to perform complex electrical work is complex itself, McKague said her firm’s ability and willingness to offer a comprehensive benefits package remains a priority.

“We’ve got a stable business, and we make a good amount of income to where there are too many things that are extras,” she said. “Health insurance should never be looked at as an extra.”

Even more, McKague said proving employee health coverage is the one benefit that should always remain on the table.

“Health insurance is the last thing you cut anywhere,” she said. “And if you have to take a little bit less on the bottom line, that’s just the price to do business.”

Quality of life, she said, cannot be underestimated.

“You have to take a look at the difference between the money and the quality of life that you bring for people,” McKague said. “It’s a way to send a message to your employees that you truly do care about them as an owner.”

During the COVID saga, she said the pandemic did bring about some positive changes.

“Because of COVID we learned to work differently,” McKague said. “We don’t work from home. Security and fire systems had to be kept up.”

And she said not having insurance for employees, even at that time, was never a consideration.

“You should never ask anything more of your employees than you ask of yourself,” she said.

Such sentiment can also be found in some of the smallest operations within the small business sector.

Since 1974, Bob Giesler has owned Giesler’s Auto Repair in the same location on Franklin Road in Meridian. With four full-time staffers and one part-time bookkeeper, Giesler is set to retire next month and turn the keys over to his nephew, Johnny Giesler.

As he gears up for more time to travel and fish, Giesler said he’s still concerned about increasing insurance costs.

“My parents were worried about me when I first started this business nearly 50 years ago,” he said. “But we’ve always been able to adjust and make changes.”

Maintaining health coverage for even a handful of workers can still be costly, but Giesler said it helps maintain the family-owned environment he started half a century ago.

“As the guys get older, the rates go up, so it is a big ticket item for us,” Giesler said. “But I’m a family man and that’s the way we have tried to keep this business.”

Likewise, he said he wants all his employees to benefit from the benefits he can offer them.

“It’s important to me that families make money and don’t struggle any more than they have to with costs,” he said. “So, it’s important for me to have this insurance for them.”

Despite offering a solid compensation package, the struggle Giesler said is in finding workers who want to develop successful careers in the automotive industry.

“It seems like the young people are not into this type of business these days,” he said. “A lot of shops are looking, but there just aren’t as many people going through the colleges and vocational schools as there used to be.”

Meanwhile, Patton said a college education serves him well, but it’s not a necessity for specialized trades.

A number of his plumbers he said are college graduates, but they started over in life by going through an apprentice program.

“A big part of that transition is due to the benefits, job security and pay we offer,” he said. “We’ve increased the overall compensation to keep up with being able to keep and attract good people, and that includes health care. And I know if I am not doing it, my competition is, and good people will leave. It’s extremely competitive.”

In the end, cost is the deciding factor and single biggest issue for employers to determine whether they can or can’t afford a health plan for those who work for them. And cost can have a huge impact on a company’s ability to retain qualified workers they so desperately need.

In most cases, small businesses provide health coverage for only full-time employees. For part-time staff, or even those whose company cannot afford a health plan, the end result is typically one of two options. Find an affordable plan on their own through the state’s health exchange or go without.

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