Small and midsized tech companies face many challenges, but none may be as difficult as attracting and retaining talent. The task is especially difficult given what these high-growth companies are up against in Silicon Valley. Consider the following:
- Google offers one-on-one consultations to new parents to help them find child care facilities
- Intuit has onsite fitness centers for employees and offers $650 for gym memberships and exercise class fees
- Netflix now offers a year of paid maternity and paternity leave for salaried employees
- Twitter employees receive Zipcar discounts, access to in-office yoga and Pilates classes, and dry cleaning and laundry services
In addition to competing against cash-rich tech companies, smaller firms are grappling with increasing healthcare costs and are stuck in a new pricing system that doesn’t allow for effective rate negotiation. According to a survey by Mercer, a Marsh & McLennan Agency (MMA) sister company, employers predict that health benefit cost per employee will rise by 4.2% on average in 2016 after they make benefit plan changes, such as raising deductibles or switching carriers. This is consistent with actual cost growth in 2014 (3.9%) and the expected cost growth for 2015.
So how does a promising tech company bring in the talent it needs when the tech giants are grabbing up the skilled employees with higher salaries, generous 401(k) plans, and impressive healthcare benefits?
One way small and midsized technology companies can compete is to take advantage of a small business trust. A relatively new way to lower employee benefit costs, tech companies are pooling their collective buying power to compete with the giants on robust healthcare benefits.
The Department of Labor (DOL) created small business trusts to assist emerging companies by allowing them to come together to lower the overall cost of employee benefits. These DOL-qualified trusts enable small employers—regardless of their size--to meet the requirements for large group rates.
This trust solution has already proven its value for the life science sector.
Since 2012, MMA's Beyond Benefits trust program has helped 154 life science employers save $4.95 million in medical premium. More than 5,000 employees are covered by this small business trust program.
MMA is now offering the same opportunity to tech companies all over California through its Benefits Tech Trust.
The Benefits Tech Trust enables emerging tech companies to pool together to qualify for large group rates from the nation’s best insurance companies.
A MMA employee benefits specialists can help your technology company design a program to meet your needs and allow you to access the wide range of services offered by Benefits Tech Trust. Those services include the following:
- Built-in online enrollment platform
- Consolidated billing
- In-house actuarial and compliance services
- iBenefits App
- Embedded HR Support Services
- Barney & Barney compliance resources
- COBRA and flexible spending administration
- Optional buy-up for 1094(c) and 1095(c) reporting
- Branded employee communications
For more information, please contact us.
Bay Area: Adam Moise at (415)-615-0802 or Adam.Moise@MarshMMA.com
Orange County & Los Angeles: Brian Hegarty at (949) 544-8476 or Brian.Hegarty@MarshMMA.com
San Diego: Todd Bennett at (858) 587-7157 or Todd.Bennett@MarshMMA.com