Employee Benefits for Small Organizations



Employee Benefits for Small Organizations


Benefit packages are more common in large nonprofit organizations than small start-ups where affordability is a major issue. These benefits typically include insurance (medical, dental, and life,) some form of retirement savings plan, and paid time off. If the organization is part of a larger organization, benefit plans may be established that can be extended to the operation. If not, the board may wish to consider how to acquire benefits for managers and/or employees at affordable rates. This is important because the availability of benefits is a key recruiting tool to attract good managers and employees. Sometimes benefits are as important as salary. For example, an experienced manager who qualified for early retirement from a previous job may need health insurance coverage.


There are ways that smaller organizations can afford benefits comparable to larger organizations or companies. One alternative for acquiring group benefits is to use a Professional Employer Organization (PEO) to administer the human resources and payroll functions. That is, contract those services instead of hiring staff to perform them. The PEO essentially hires the employees wanted by the organization and leases them back to the organization. The PEO maintains employee records, ensures compliance with labor regulations and workers’ rights, and processes claims for benefits. The PEO will require that the organization have a minimum number of full-time employees to qualify (often five to seven, depending on the PEO.) The cost of using PEO services may be less expensive than staffing (even if that is only one person) and it provides a range of professional resources not available to small organizations. ADP TotalSource and Administaff are just two examples of PEOs. Administaff offers both employee benefits and special services for nonprofit organizations. There are many other PEOs, depending on the region of the country.




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This work is supported under a five-year cooperative agreement # H235V060016 awarded by the U.S. Department of Education, Office of Special Education and Rehabilitative Services, and is administered by the Pass It On Center of the Georgia Department of Labor – Tools for Life.  However, the contents of this publication do not necessarily represent the policy or opinions of the Department of Education, or the Georgia Department of Labor, and you should not assume endorsements of this document by the Federal government or the Georgia Department of Labor.











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Other Information

Title: Employee Benefits for Small Organizations
Module: Human Resources
Author: Trish Redmon
Audience: Implementer
Sub Title:
Procedure: Options for obtaining benefits
Organization Source: Pass It On Center
Last Reviewed: 10-25-2009 7:10 PM