It has become an axiom in the small business world: Attracting and keeping talented workers can be a full-time job. Today's educated workforce has come to expect a comprehensive benefits plan as part of overall compensation. So what are the most important benefits you can provide (and that employees expect)? And what is the right level of benefits you should offer? This overview can get you started answering those questions.

Core benefits
In its most recent survey of employee benefits offered by small businesses, the U.S. Department of Labor found that paid leave was the most frequently available benefit for full-time workers, followed by health insurance, a retirement plan, and life insurance. Those findings are echoed by the latest private-sector research, which suggests these are the "core" benefits, albeit in slightly different order, that today's small business employees expect. Let's look closely at each.

Paid leave – Employees expect you to be far more flexible with time off than ever before. Granting paid leave is a costly benefit, so first ask yourself these questions:

• How much paid leave can you afford each year?
• Does your paid leave policy mesh with the requirements of the Family and Medical Leave Act and with state laws? Does unused leave carry over from one year to the next?
• Are employees eligible for more leave after a certain number of years with the company?

The good news here is that the benefits of a fair paid leave policy can far outweigh the costs, in the form of employees who are more engaged and productive.

Health insurance
Employees consistently rank health care coverage as one of the most important employee benefit. The three most popular programs that businesses provide are:

• Traditional indemnity plans allow employees to choose their own physicians but tend to be more costly.
• HMOs (health maintenance organizations) can help minimize employers' costs by putting greater limits on the choice of primary care providers.
• PPOs (preferred provider organizations) offer a broad choice of health care providers but can be more expensive than HMOs.

Which program you implement depends on how you choose to balance the issues of costs, quality of care, and accessibility. Contact your state department of insurance to learn about small business group health providers in your area.

Retirement plans
A strong retirement plan ranks just behind health insurance as a staple in any small-business benefits package. Whatever the size of your business, there is a galaxy of retirement plans from which to choose, ranging from individual retirement accounts (IRAs) to simplified employee pensions (SEPs) to popular 401(k) plans, to name a few. While no two companies will implement the exact same retirement plan, financial planners stress that all small businesses should first get solid answers to the following:

• Does the plan require a minimum contribution each year?
• Will the plan's provisions accommodate your company's growth?
• What are the tax implications?
• What are the ages of your key employees?
• What investment options do employees have, and will you match employee 401(k) contributions?
• What sort of training does the plan provide employees?

Although media reports have focused on the poor performance of many 401(k) plans following the fall of the Internet boom, something of a silver lining has emerged: Employees are paying closer attention to their retirement plans than ever before. That's good news for everybody.

Life insurance
Small businesses typically offer their employees a group term life insurance policy. Such policies cover employees only while they are working for your business. In most cases, employers cover the basic premiums; if additional coverage is offered, employees generally pay the extra cost. The amount of the benefit is commonly a year's salary (employees wanting to increase the size of the benefit usually assume the extra cost).

Thinking outside the box
What other things are today's cutting-edge small businesses doing to keep their most valued employees? Workplace specialists point to a number of creative "people" strategies that are proving increasingly effective at cultivating employee loyalty. The most popular offerings include wellness programs, backup child care services, education assistance (including college advising services), and flexible work arrangements.

Finding the right mix
The Small Business Administration recommends that you tackle the following questions before signing off on any benefits package. Your answers will help you focus in on the kind of benefits, and how many, to offer your employees:

• How much are you willing to pay for coverage?
• What kinds of benefits interest your employees? Do you want employee input?
• What do you want a benefits plan to accomplish? Is it more important to protect your employees from economic hardship now or in the future?
• Is a good medical plan more important than a retirement plan? Why?
• Do you want to administer the benefits plan, or do you want the administration handled by an insurance carrier?
• What is your employee group like today? Can you project what it might look like in the future?

Finally, make it a policy to review your company's total benefits package at least once a year. It is the best way to ascertain that the benefits you offer are in line with the needs and expectations of your evolving workforce.