You talk a lot about talent. You talk less about the thing actually deciding who stays and who leaves: benefits. Second Wind's own 2025 Annual Agency Survey shows most of you are already doing the hard work here. Ninety-five percent of member agencies offer health insurance. Ninety-five percent offer a retirement plan. Eighty-five percent match 401(k) contributions. That's a genuinely strong benefits package for shops your size, well ahead of where most small businesses in this country land.
The problem isn't whether you offer benefits. It's what it now costs you to keep offering them at the level your people expect.
The Math Got Worse, and Our Own Numbers Prove It
You already know your renewal notice hurt this year. Second Wind's own data shows exactly how much: employee insurance costs jumped from 3.53 percent of AGI in 2023 to 4.25 percent of AGI in 2024 across the average member agency, a roughly 20 percent increase in what health coverage takes out of agency profit in a single year.
That's happening against a backdrop of real premium inflation nationally. Small group health premiums are projected to rise a median of 11 percent in 2026, the sharpest increase in over 15 years, and businesses with two to five employees have it worst, absorbing a 23 percent cost surge since 2022. Whichever way you slice it, health coverage is taking a bigger bite out of agency profit every year.
You're Already Managing the Squeeze, Whether You Realize It or Not
Look at how you're actually splitting the cost. Only 8 percent of you pay 100 percent of employee premiums. The largest group, 30 percent, pays around half. A full third of you pay nothing at all toward dependents' coverage. That's not a failure. That's the cost management most of you have already been doing for years, shifting the burden in the direction that keeps the core benefit intact without breaking the budget.
The risk isn't that you'll stop offering coverage. Almost none of you will. The risk is the slow creep in what it costs to hold the line, eating into money you'd rather spend on salary, bonuses, or profit-sharing, without anyone deciding that on purpose.
Insurers Price Risk in Pools, and You're a Small One
This hits you harder than it hits a holding company for a plain reason: insurers price risk in pools, and small employers bring small, unpredictable pools to the table. One serious claim can move your renewal number more than an entire year of wellness initiatives can offset. Larger agencies negotiate from a position you don't have. That's just math, not a judgment on how you run your shop.
It's also exactly why the agencies that keep their benefits strong despite this disadvantage have a real, defensible edge in hiring. You're competing for the same creative director or strategist a tech company or an in-house brand team is chasing, and your benefits package is already doing more work in that fight than you might be giving it credit for.
Mental Health Coverage Has Moved From Nice-to-Have to Baseline
Mental health coverage moved from nice-to-have to baseline expectation faster than almost any other benefit category. Most U.S. employers now build behavioral health support directly into their medical plans instead of bolting it on. If you're not doing the same, you're competing for talent with one hand behind your back, no matter how strong the rest of your package looks.
The Freelancer Problem Compounds It
You don't run a clean, uniform W-2 workforce. Eighty-five percent of you use outsourced or freelance talent, and a third of you use it regularly rather than just as needed. That blend creates its own benefits headaches. Worker classification mistakes carry real legal and financial exposure, and the line between a long-term freelancer who functions like an employee and one who's genuinely independent keeps getting harder to draw. If you haven't revisited your classification practices recently, you're carrying more risk than you think.
What to Consider as Costs Keep Climbing
Three approaches are worth understanding, even if you've heard of them before, because the calculation on each one changes as premiums keep climbing.
Professional employer organizations let you pool into a much larger risk group, unlocking pricing and plan quality closer to what a large employer gets, while offloading payroll, compliance, and HR administration you're probably not staffed to handle well internally. The tradeoff is real: a PEO changes how employment itself is legally structured. Rush that transition without a clear communication plan and you'll spook staff who hear "we're changing how you're employed" and assume the worst.
Individual coverage health reimbursement arrangements appeal to owners who want more control than a PEO offers. Instead of buying a group plan and absorbing whatever the renewal brings, you set a fixed contribution and employees apply it toward a plan they choose themselves. It shifts the unpredictable part of the cost problem off your books without cutting the benefit.
High-deductible plans paired with health savings accounts remain the most common cost-control move. They keep premiums lower, but a meaningful share of employees on these plans carry deductibles high enough that they avoid care instead of using it, which undercuts the entire point of offering the benefit.
The Strategic Point
Your benefits package isn't the problem. It's one of the best arguments you have for why someone should come work for you instead of the tech company or the in-house team also chasing them. The problem is that keeping it strong now costs 20 percent more than it did last year, and that number will show up again next renewal whether you've planned for it or not.
The agencies that stay ahead of it are the ones who treat that cost the same way they treat any other line item that's grown too fast to ignore: they look at it directly, they weigh their options, and they make a decision instead of letting the renewal notice make it for them.
