4 January 2023
Since the spring of 2021, businesses have been experiencing the Great Resignation. This has elevated the rate at which workers resign from their jobs. Though there are many reasons employees quit, most job seekers surveyed claimed employee benefits are among the top concerns for job seekers.
Employees are the backbone of any successful organization. It is vital to ensure they are provided with the best possible modern and traditional benefits. As an employer, you are required to offer certain types of employee benefits like unemployment insurance, social security taxes, and medical insurance to retain employees.
However, employee benefits can get expensive fast, which is why it's important only to do what you can afford. The goal of offering benefits for employees is to remain competitive in the talent market and not to become a total outlier. Remember, cost-sharing with employees has become the norm, and employees are expected to pay a portion of insurance costs.
In this post, we will look at some common types of employee benefits packages, including why offering employee benefits is important.
Common Employee Benefits
Employee benefits are perks and incentives offered by an employer to its employees. They can be a valuable part of an employee's overall compensation package. They can help attract and retain top talent. Some expected types of employee benefits include health coverage, insurance benefits, retirement plans, and paid vacation. Most of these are legally required benefits but there are other perks such as voluntary benefits, profit sharing, fringe benefits, and stock options.
Other employee benefits may include flexible work schedules, on-site childcare or other family-friendly perks, and professional development opportunities. Employers may offer different types of employee benefits to meet their workforce's diverse needs and to guarantee employee satisfaction.
Health insurance benefits are a type of employee benefits package that helps cover the cost of medical care. An employer can provide it as part of an employee's overall compensation package. Employees may also have the option to purchase health insurance through their employer. Medical coverage benefits can help protect employees from financial hardship due to unexpected or high medical costs.
According to data from the U.S. Census Bureau, in 2021, approximately 56% of Americans had employer-provided medical insurance. This means that a significant portion of the workforce in the United States relies on employer-provided health insurance to access medical care which helps many employees avoid indirect costs.
Many different health insurance plans exist, including HMOs (Health Maintenance Organizations), PPOs (Preferred Provider Organizations), and high-deductible plans. These plans may have different levels of coverage and out-of-pocket costs for the employee. Employers may offer a range of health insurance plan options to meet their workforce's diverse needs and preferences. This can include pet insurance, vision coverage, and dental insurance.
Retirement plans help employees save for retirement and provide financial security during their post-work years. Employers may offer several retirement benefits, including defined benefit plans, contribution plans, and individual retirement accounts (IRAs).
- Defined benefit plans - also known as pension plans, are employer-sponsored retirement plans that pay a predetermined amount to employees when they reach retirement age. The benefit amount is based on factors such as the employee's salary and length of service.
- Defined contribution plans - such as 401(k) plans and 403(b) plans, are employer-sponsored retirement plans in which employees contribute a portion of their salary to a retirement account, and the employer may also make contributions. The amount of benefit that an employee receives at retirement depends on the amount of money that has been contributed to the account, as well as investment returns.
- IRAs - are individual retirement accounts that are not employer-sponsored but may be offered as an employee benefit. Employees can contribute to an IRA on their own or through their employer. The amount of benefit that an employee receives at retirement depends on the amount of money that has been contributed to the account, as well as investment returns.
According to data from the U.S. Census Bureau, in 2021, approximately 60% of Americans had some form of retirement savings, such as a defined benefit plan, defined contribution plan, or IRA. Retirement benefits are essential employee benefits that can help ensure financial security for employees during their post-work years. This is why they are some of the best employee benefits packages an employer can offer.
Paid Time Off
Paid time off (PTO) is an employee benefit that allows employees to take paid time off for various reasons. This can include paid vacation, personal days, and paid sick leave. PTO can be a valuable benefit for employees. It allows them to take time off from work to rest and recharge, attend to personal matters, or take care of their health.
There are several different types of PTO, as mentioned above. Vacation time is PTO that employees can use for leisure or other private purposes. Personal days are PTO that many employees use for personal or family matters. Medical leave is PTO that employees can use when they are ill or need to care for a sick family member. It also covers paid parental leave.
The amount of PTO an employer offers may vary depending on factors such as the company's size, industry, and location. According to data from the Bureau of Labor Statistics, in 2021, the average number of vacation days offered to full-time employees in the United States was ten days per year. The average number of personal days offered was four days per year. Meanwhile, the average amount of sick leave offered was seven days per year.
Disability and Life Insurance
Disability and life insurance provide financial protection to employees and their families in the event of the employee's death or disability.
Life insurance pays a benefit to the employee's designated beneficiaries (e.g., spouse, children) in the event of the employee's death. The benefit can help cover funeral expenses, pay off debts, and provide financial security for the employee's family. In most cases, employers offer life insurance.
Disability insurance pays a benefit to the employee if they become disabled and are unable to work. It can help cover the employee's living expenses and medical bills while they are unable to work.
Employers may offer disability and life insurance as part of an employee's total compensation costs. Employees may also have the option to purchase these types of insurance through their employer. The amount of coverage and the policy terms will vary depending on the specific plan and the types of employee benefit the employer offers.
According to data from the U.S. Census Bureau, in 2021, approximately 49% of Americans had some form of life insurance, and about 44% had some form of disability insurance. Disability and life insurance are essential employee benefits examples. They provide financial protection for employees and their families in the event of death or disability.
This type of employee benefit provides financial support to employees pursuing education or training to enhance their skills and knowledge. This may take the form of tuition reimbursement, student loan repayment assistance, or other forms of financial support.
Employers may offer education assistance as a way to invest in the development of their employees. Employers can also use this as a way to help them stay competitive in their careers. Education assistance can be a valuable employee benefit. In fact, it can help offset the cost of tuition and other education-related expenses.
The amount of educational employee benefits an employer offers may vary depending on factors such as the company's size, industry, and location. According to data from the Society for Human Resource Management (SHRM), in 2021, approximately 59% of U.S. companies offered some form of educational assistance to their employees.
Flexible Work Arrangements
Flexible work arrangements are employee benefits packages that allow employees to have some control over when and where they work. These may include telecommuting, flexible hours, and job-sharing.
- Telecommuting - also known as remote work, allows employees to work from home or another location outside of the traditional office setting. Telecommuting can be a valuable benefit for employees, as it can help reduce commuting time and costs, allowing a better work-life balance and overall job satisfaction.
- Flexible hours - allows employees to have some control over the hours they work within specific parameters set by the employer. This would be the right benefits package for employees who need to manage family or other personal commitments.
- Job-sharing - is a flexible work arrangement in which two or more employees share the responsibilities of a single full-time position. This can be useful for employees who want to reduce their work hours while maintaining a full-time income.
According to data from the U.S. Census Bureau, in 2021, approximately 27% of U.S. workers had some form of flexible work arrangement, such as telecommuting, flexible scheduling, or job-sharing. Flexible work arrangements are a common and valuable employee benefit. These can help employees manage their work and personal commitments and improve their work-life balance.
Wellness programs are employee benefits designed to promote employees' physical and mental health and well-being. These may include various activities and resources, such as health screenings, fitness classes, stress management workshops, and healthy lifestyle resources.
Wellness programs can be a valuable benefit for employees. They can help employees maintain good health and prevent or manage chronic conditions such as obesity, diabetes, and heart disease. Wellness programs can also help younger employees reduce stress and improve mental health which promotes job satisfaction.
Many employers including military service offer wellness programs to improve the health and well-being of their workforce and reduce healthcare costs. Wellness programs can be implemented in various ways, such as through on-site clinics, gym memberships, or financial wellness programs run by the finance department, among other benefits.
According to data from the Society for Human Resource Management (SHRM), in 2021, approximately 84% of U.S. companies offered their employees some form of a wellness program. They are a common and valuable employee benefit that can promote employees' physical and mental health and well-being.
Employee Assistance Programs
Employee assistance programs (EAPs) provide a range of services and resources to help employees manage personal and work-related problems. They may include counseling services, financial planning resources, legal assistance, and work-life resources.
EAPs can also be a valuable benefit for employees. They can provide support and resources to help employees deal with various personal and work-related issues. They can help employees manage stress, improve mental health, and resolve conflicts at work.
Employers may offer EAPs as a way to support the well-being and productivity of their workforce. They can implement EAPs in various ways, such as through on-site clinics, online resources, or referral services.
According to data from the Society for Human Resource Management (SHRM), in 2021, approximately 75% of U.S. companies offered some form of EAP to their employees. Employee assistance programs are a common and valuable employee benefit that can provide support and resources to help employees manage personal and work-related problems which can boost morale around the workplace.
Employee benefits can help attract and retain top talent. Certain benefits help improve morale, enhance productivity, and motivate employees to reach their goals. Benefits typically include retirement plans, health insurance coverage, disability insurance, vacation time off, life insurance, and additional incentives such as discounts or bonuses.
By providing employees with a comprehensive benefits package, companies can show their appreciation for the hard work and dedication of their team members while also fostering a positive workplace culture.
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