Let the great re-hiring commence! As businesses and organizations across the United States continue to open back up and bring workers back on, a new report has discovered that small businesses (SMB) employing 1-10 workers are hiring back furloughed employees at the highest rate of all SMBs.
A new report released by Ease—an HR and benefits software solution for small businesses, insurance brokers, and insurance carriers—has uncovered how SMBs across the country are recovering from the economic fallout of the pandemic. According to the Bureau of Labor Statistics, more than 18 million workers were furloughed by April 2020.
The Ease report, which draws on data from 75,000 SMBs and 2.5 million employees nationwide, found that businesses with 1-10 employees have since rehired an average of 37% of furloughed workers, the highest rehiring rate of SMBs.
“As we come out of the pandemic and the economy slowly recovers, our goal with this report is to help employers make informed decisions—backed by data—about the benefits they offer to help drive recruitment and employee engagement,” says David Reid, CEO and cofounder of Ease—in a press release.
“We’ve found that small businesses that survived the downturn were able to adapt and do more with less—and even rehire many of their employees,” Reid adds. “But with premiums on the rise nationwide, small businesses need to look for more flexible, affordable plan options and voluntary benefits to help attract new talent and compete with larger companies.”
Breaking Down the Data
Prior to COVID-19, the U.S. unemployment rate was the lowest it had been since 1969 creating steep competition among employers looking to attract the best talent. But during the recession this past year, the job market and employment landscape shifted dramatically as millions of Americans were furloughed or laid off.
As the year wore on, the job growth the U.S. experienced in the second and third quarters was tied to the return of furloughed workers to their companies, as well as the availability of funding through PPP loans. Companies on the Ease system saw the following trends of employees furloughed due to the pandemic:
- 37.09% of employees who worked for companies with 1-10 employees were rehired
- 2.21% of employees who worked for companies with 11-50 employees were rehired
- 3.29% of employees who worked for companies with 51-100 employees were rehired
- 4.24% of employees who worked for companies with 101-250 employees were rehired
Further, in 2020, the majority of insurance brokers surveyed (81%) said they helped their SMB clients lay off employees and navigate COBRA, according to Ease’s 2020 Fourth Quarter Preparedness Report, in which Ease surveyed nearly 600 brokers, account managers, and agency owners.
Seventy-four percent said they helped their clients furlough employees and 69% said they helped with hiring employees and conducting onboarding/benefits selection remotely.
Voluntary Benefits Take the Lead in the War for Talent
Beyond standard medical benefits, optional voluntary benefits offerings have also increased across companies looking to differentiate themselves in the talent market. The larger the company, the more voluntary benefits plans offered per employee, the report finds.
A company with 101-250 employees averaged 3.33 more voluntary benefits plans in 2020 than a company with 1-10 employees. The number of voluntary benefits plans offered per employee has increased by roughly 3% on average since 2018. The most popular plans are Dental, Vision, Life AD&D, Short-Term Disability, and Long-Term Disability.
On the West Coast, in California the number of voluntary benefits plans offered per employee has increased 2% since 2018, on average. Florida, however, saw a slight decrease in 2020, year-over-year, while Texas and New York saw slight increases year-over-year.
To learn more about the report, click here.