Why Employee Benefits Matter in the Sale of Your Business

Did you that offering employee benefits can one day help in the sale of your business? Holly Peppler with Strategic Benefit Partners and David Ortiz of Overflow Wealth Advisory, both based in Norman, OK, recently sat down to discuss the importance of these types of benefits when evaluating the worth of your company prior to its sale.

In a 2022 survey, The Society for Human Resource Management, found that 46% of organizations increased their overall employee benefits to remain competitive?

When a company is looking to sell their business, discussions often revolve around numbers – profits, margins, and valuations. While these numbers are important and play a vital role in the sale of a business, the human aspect is often overlooked. Employees contribute to the success of a company and the happiness of those employees plays an important role in the sale of a business. Offering employee benefits isn’t just a moral obligation, it’s a strategic move that fosters loyalty, sustains productivity, and can enhance a company’s reputation.

Companies of all sizes, but especially those with owners who are looking to sell and exit their business, should be reviewing their employee benefits regularly.  In that review you should be ensuring that your benefits align with the needs of your workforce. Today’s employees are looking for more than just a paycheck, they want to work somewhere that values them as part of the family and offers them incentives, such as benefits, for loyalty and productivity. Each business is different, but most should ensure that, at the bare minimum, they are offering an employer sponsored health plan. Tailoring that plan to the needs of your employees and the location of your business will ensure that staff are happy with the offer. Consider PPO vs. HMO, high deductible plans, low deductible plans, or a mixture of both. You may even want to discuss self-funded and level funded arrangements. And remember, employees want to have choices so offering 2 or 3 options will allow them to choose the plan that best fits their needs.

In addition to health insurance, asking your broker about additional benefit plans such as dental, vision, disability, and life insurance, can help to bolster employee retention and assist in finding top talent within your industry – both key areas that a buyer will look at when assessing your human capital during the sale of your business. While these types of benefits are sometimes paid for by the business, they can also be voluntary, meaning they are paid for through employee payroll deductions.

Remember, offering benefits to your employees whether it be employer sponsored or voluntary benefits plans shows that you are serious about employee’s happiness, health, and productivity. After all, happy and healthy employees make for a happy, profitable, and sellable business.