EDITORS’ NOTE Regular columnists Derrick Myers, CPA, CFP, PFCI, and Paul Goodman, MBA, AAF, PFCI, are taking a break this issue. We asked guest columnist Kevin McCarthy, president of Family Flowers, to share advice that a business of any size could use to budget for and administer benefits. Have finance related question? Email fmeditor@safnow.org, and we’ll challenge the experts to tackle them in an upcoming article.


Understanding how to manage and


reduce costs is key to an affordable benefits program.


BY KEVIN MCCARTHY


Can You Afford to Provide Benefits?


I 36 FLORAL MANAGEMENT | March/April 2025 | WWW.SAFNOW.ORG


n an increasingly competitive labor market, employer-provided benefits can help businesses stand out. The cost for providing them, however, can be substantial. I’ve discovered some strategies to help manage the added expenses and in the process found that the benefits it brings to my business, Family Flowers, far out- weigh the cost.


Understand the Cost Offering insurance benefits comes with both direct and indirect costs. Direct costs include premiums for insurance (health, dental, vision and life insurance, etc.). At Family Flowers, which has several hundred employees across more than 30 shops in 10 states, covering the health insurance premiums costs the company about $3 more per hour per employee. That cost will vary from business to business based on the number of employees and plans. The cost of premiums along with other benefits and administrative costs are categorized as labor expenses, and the general rule of thumb in the retail flower business is to keep labor costs under 30% of revenue. Indirect costs include plan administration, ongoing education to stay up to date on


government requirements, and annual research into plan changes and availability. We have a human resources department to handle these extra tasks with the assistance of a benefits broker. The benefits broker takes a commission from the premiums our company pays,


so there is not a direct cost for using the broker. The broker’s service goes a long way toward helping us explore the many options available for insurance along with the costs.


SHUTTERSTOCK/INNORIA & FGC


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