Against the tide of layoffs and downsizing, women-owned businesses are growing at nearly twice the rate of all U.S. privately held firms. In fact, according to the Center for Women’s Business Research (CWBR), 10.1 million firms are owned by women, employing more than 13 million people and generating $1.9 trillion in sales as of 2008.
The CWBR also reports that these female-owned businesses invest approximately $54 billion per year in employee benefits.
Despite the continued success and sustained growth of these businesses, however, female business owners are less likely than their male counterparts to offer their employees group life and health benefits, according to LIMRA International. The reason? LIMRA cites that female-owned firms tend to be smaller than male-owned companies, making it difficult for them to offer comparable benefits.
Even more telling are beliefs and attitudes of these business owners when it comes to their ability to offer meaningful benefits to their employees. For example, when asked by LIMRA if they wanted to offer benefits to their employees, the majority said they did, but that they believe the cost would be prohibitive. And more importantly, many female business owners believe they do not have enough employees to qualify for group benefits. A simple fix to overcoming this hurdle is to offer smaller companies the solution of voluntary, employee paid benefits.
According to LIMRA, “Voluntary employee-pays-all benefits have often been suggested as a way to provide some benefits to employees at a reduced cost to the employer. Businesses basically pay only for the administrative costs/fees of the voluntary product, resulting in much lower costs to the businesses than the typical employer-paid benefit.”
More marketing and relationship building necessary
Simple fixes aren’t always possible, though, and a greater investment in marketing and one-on-one communication can be important for producers looking to expand their client base in this market. The innovations that have been driving the employee benefits marketplace over the last few years (e.g., employee-pays-all benefit plans with minimal participation requirements) have simply not reached the majority of female business owners.
Some point to a lack of communication with this sector, while others attribute it to a belief that smaller firms may be unable to purchase any additional benefits, leading producers to avoid approaching these business owners with ancillary benefits.