Research from the Guardian Life Small Business Research Institute found small business owners must overcome economic challenges and improve company productivity to remain competitive with larger companies in 2012.
One way to compete with larger enterprises is to attract higher-quality talent to enhance company productivity and increase growth.
"With many large companies downsizing, small business owners have a unique opportunity to be creative in the way they attract talent from organizations by offering competitive benefit structures," said Ernie Guerriero, head of qualified plan marketing for the Business Resource Center for Advanced Markets at Guardian.
According to a white paper from Colonial Life and Accident Insurance Company, offering financial planning tools, information and benefit options not only attracts new talent, it also boosts morale and improves employee loyalty. The report found underinsured employees are vulnerable to severe financial hardship and employers can educate their team to prevent a potential downfall.
The study found 100 million Americans do not have private disability insurance, and 40 percent of U.S. adults have no life insurance coverage. Of those that are enrolled in a benefits package through their employer, 35 percent are concerned their coverage is not adequate if the individual has to stop working for a period, and 19 percent fear their benefits do not cover the death of a primary wage earner.
One reason why consumers are not purchasing adequate coverage is because they often have a misconception of how important life insurance is to their financial futures. The study found the majority of wage earners believe there is a 2 percent chance they will be disabled for three months or more, hindering them from earning a steady income.
"One reason for this discrepancy could be what workers think causes a disability," Koll said. "Lifelong ailments aren't the main cause of disabilities. The vast majority -- 91 percent -- are caused by common illnesses or health conditions such as cancer, childbirth or heart attack. That means many disabilities aren't covered by workers' compensation."
Therefore, the study suggests employers provide information on how to best prepare for the future financially, and create an affordable financial safety net of life and disability insurance for employees to purchase.
"Voluntary insurance plans allow employers to offer cost-effective protection at little to no direct cost to the business," Koll says. "By integrating voluntary benefits such as the basics of life and disability coverage with existing medical benefits, employers can go a long way toward helping employees protect themselves against financial exposure."