What Are Employee Benefits?
Employee benefits are a non-monetary bonus to an employee’s salary that is provided by their employer. Essentially, employment benefits are a type of perks compensation that adds value to a workplace, bringing in talented staff and reducing the number of employees wanting to leave.
The best employee benefits and perks packages can come in many shapes and sizes. Some employee benefits are required by the government depending on the type of work and the local law. These compulsory benefits often include short-term disability insurance, medical insurance, and time off for employees to vote, perform jury duty, or serve in the military.
From an employer’s perspective, different types of employment benefits are an excellent tool for keeping staff happy, healthy, and loyal. Companies with comprehensive employee benefit packages are more likely to have a dedicated, productive team that promotes the business; hence, why employee benefits can get competitive. It also explains the rise in employers straying from the traditional path and finding more creative ways to provide perks to their employees.
Some examples of employee benefits and perks are:
- Medical insurance
- Student loan repayments
- Short and long-term disability insurance
- Retirement packages and plans
- Life insurance
- Paid holidays, vacations, and sick leave
- Discounts on company products and services
- Wellbeing programs
- End of year bonuses
- Flexible working hours
- Company shares
Why Are Employee Benefits Important?
Employment benefits are invaluable to any business because they can be the building blocks for a positive work environment. Employee benefits often make up at least 40% of an employee’s compensation package, and therefore shouldn’t be overlooked when accepting a new job.
A quality employment benefits package can have a considerable impact on an individual’s decision to work for a company and can affect an employee’s likeness to stay with a business. In fact, 78% of employees would remain with their employers because of the benefits they provide. Employee benefits have many advantages and shouldn’t be overlooked. They can influence a company’s turnover rate, employee job performance, the attraction for new talent, and overall employee satisfaction.
Even small businesses with minimal budgets for employee benefits can improve their staff engagement by providing low-cost perks such as free food or snacks and discounted products or services. Companies should think outside of the box when it comes to what benefits they provide to their employees as sometimes novelty perks can significantly boost a company’s reputation and positively impact recruitment.
It’s also necessary to remember that the employee benefits one generation finds important and values may not be the same as another. Therefore, the type of employee benefits and perks a company provides should take the age of the talent into consideration to increase its appeal.
What Types of Employee Benefits Are Compulsory?
In the United States, the government has declared that all employers must provide their employees with certain benefits. These required benefits can differ in each state depending on the local law. However, all employers in the United States must provide basic benefits as listed below. Compulsory benefits include:
- Allowing time off to vote, perform jury duty, and serve in the military
- Comply with all worker’s compensation requirements
- Pay any government unemployment taxes
- Contribute to short-term disability programs in some states
- Comply with the Federal Family and Medical Leave (FMLA)
Comprehensive Guide to the Best Employee Benefits
While there are a few compulsory benefits employers must provide, the number of added perks given to employees is up to the discretion of each company. These employment benefits, also known as fringe benefits, is where it can get competitive. Listed below are some of the best employee benefits you need to keep an eye out for when accepting a new role.
Arguably the most crucial employee benefit, health insurance adds immense value to an employee, with 88% of workers naming it as an important benefit. Due to its demand from employees, it’s one of the most commonly offered benefits provided by employers. Comprehensive medical insurance packages can significantly improve an employee’s attitude towards their company. Many employees find the knowledge that their employer cares about their health very reassuring.
Some companies increase the value of providing health care to employees by extending it to family and de facto partners. By doing this, a company is more likely to bring in great staff as a majority of people hold higher opinions of companies that have a family focus.
In the US, it’s required that businesses with over 50 employees provide health insurance plans. However, coverage can vary.
Student Loan Repayment Programs
Another benefit highly valued by millennials is a student loan repayment program. Not only does this benefit an employee, but it can also prove to be an excellent advantage for a company. By allowing employees to pursue further education and learning opportunities, an employer will be acquiring a team of staff members that are more proficient and skilled in the workplace.
Many employers only offer tuition reimbursement if the employee is willing to study something related to their role in the company.
Dental insurance, while less common than medical and health insurance, is a highly sought after perk. The employer can fully or partially fund dental insurance benefits.
While almost all dental plans will cover for preventive and restorative work, only a few insurance options will cover for orthodontia. Orthodontia coverage may not be as necessary when providing dental insurance but can be invaluable to those who need it and shouldn’t be overlooked.
This employee benefit will protect your family in the event of your death. Life insurance will provide your immediate family with a lump sum payout, which can be extremely beneficial if you are the sole income earner.
Employers can often receive a massive discount on life insurance policies if they have a large number of employees. Therefore, the bigger the company is, the more likely they are to provide this particular perk to their staff.
With disability benefits, the employer will continue to pay part or all of an employee’s salary in the event of illness or injury that prevents them from working.
Disability insurance can be provided on either a short or long term basis. For example, short term disability insurance would protect an employee’s salary if they had a car accident, and needed to take a few weeks off work to recover. Long term disability insurance, on the other hand, would ensure that the employee received an income if they sustained a severe spinal injury that prevented them from working for the rest of their lives.
Retirement packages and plans are another popular employee benefit. In America, employers traditionally offer a retirement account in the form of a 401K. Setting up a 401K for employees is relatively easy, and with the various account types available, this benefit can be provided by even the smallest of businesses.
With a 401K, an employer will often match an employee’s contribution allowing them to save a significant amount for when they call it quits. Another retirement plan employers can offer is a pension for their employees; however, this isn’t as common.
These retirement benefits hold much value for employees and have been shown to drive employee recruitment and retention with 42% of businesses reporting an increase.
Paid Time Off
One of the most common employment benefits offered to staff is paid time off, which comes in the form of paid holiday, vacation, and sick leave. Paid time off is often accrued as an employee works for a company, so the longer you work at an establishment, the more paid time off you will receive.
Companies usually provide staff with 10 to 15 days of paid time off annually, which can be used at an employee’s discretion. If companies offer less than 15 days of paid time off, 63% of potential employees won’t take the job.
Some may choose to use their paid time off to spend with family and friends, while others will use it for doctor’s appointments or to care for sick family members. Paid time off ensures that staff don’t become burnt out and allows them to take time to rest up when needed.
Paid time off is one the most sort after employee benefits because it provides a considerable advantage to an individual. This benefit is most certainly a worthwhile investment for employers as healthy and happy staff tend to be more productive in the workplace.
Flexible Work Schedules
A flexible work schedule and having the choice to work remotely is increasing in popularity, with 77% of millennials highly valuing this particular perk. With a flexible schedule, employees can choose their work hours and take breaks when they aren’t productive. A good work-life balance is just one of the many great results a flexible schedule offers.
The ability to provide this benefit all depends on the type of work required. Any jobs that have the majority of employees work hours spent on a computer can offer this perk. It’s a great low-cost option an employer can provide their staff and often results in employees working more productively.
As a part of the Family Medical Leave Act (FMLA), all American employers are required to provide their employees with 12 weeks of unpaid parental leave for the birth or adoption of a child, given that the employee has worked for the company for one year. However, the government doesn’t stipulate that companies provide paid maternity or paternity leave.
Providing new parents with the time to rest and recover before returning to work can show an employer’s dedication to the happiness of its staff and value for work-life balance. Paid parental leave can be a massive contributor to ensuring an employee is willing to stay with the company long term, preventing them from hunting for a job that allows them to be more family-orientated.
Wellbeing programs have grown in popularity over the last few years as companies fight to attract and keep talented staff. Promoting health and fitness in the workplace can significantly improve productivity and minimize employee turnover. An employer’s concern for their staff’s mental health can even increase company loyalty and commitment by 57%.
Health plans and wellness programs can include offering healthy snacks at the office, providing an onsite gym, paying for gym memberships, or giving out fitness discounts.
Pick Benefits That Matter To You
The best employee benefits usually fall into one of the categories listed above; however, their value and importance all depend on your individual needs.
When considering a new job offer or position within a company, it’s vital that you investigate the employee benefits offered, so you can ensure that those perks hold value for you. There is no point in valuing a job for their life insurance benefit if you’re young and healthy. So listen carefully to understand what they want to stay with you longer, be more productive, and grow.