Types of Benefits for Employees: A Complete Guide

Types of Benefits for Employees: A Complete Guide - Shiftbase
Benefits For Employees, employee's salary, voluntary benefits, employee benefit, employee benefits package

In this article, we will explore why employee benefits matter and how optimizing them can unlock the power of a motivated, engaged, and loyal workforce. 

Importance of employee benefits in today's workforce

Employee benefits packages can be a powerful tool for attracting and retaining top talent, but optimizing your organization's benefits strategy is essential.

Approximately half of all employees say they prefer working for a company offering comprehensive benefits, while only 37% of employers offer them.

This means ensuring your organization stands out by offering competitive benefits packages is important.

Benefits of introducing employee benefits for the business

Attracting and retaining top talent is crucial for the success of any business, and offering comprehensive employee benefits can be a powerful tool in achieving this goal. Here are six benefits of introducing employee benefits for your business:

  • Competitive Advantage: In today's competitive job market, businesses must stand out to attract and retain the best talent. A comprehensive benefits package can give your business a competitive edge, making it more attractive to prospective employees. It can also help retain current employees by incentivizing them to stay with the company long-term.

  • Increased Employee Morale and Engagement: When employees feel valued and supported through robust benefits offerings, morale, and engagement can be boosted. Employees who are satisfied with their benefits are likelier to be loyal and committed to their employer, leading to increased productivity and performance.

  • Improved Employee Health and Well-being: Employee benefits such as health and wellness programs can improve employee health and well-being. This can result in fewer sick days, reduced healthcare costs, and increased productivity. Healthy and happy employees are more likely to be engaged and motivated.

  • Enhanced Work-Life Balance: Benefits such as flexible work arrangements, parental leave, and paid time off can help employees achieve a better work-life balance. This can reduce stress, increase job satisfaction, and improve retention rates. Employees who feel supported in managing their personal and professional responsibilities are likelier to stay with their employer long-term.

  • Talent Acquisition and Retention: Offering comprehensive employee benefits can be a powerful tool to attract and retain employees. It can attract top talent-seeking companies that prioritize their well-being and offer meaningful benefits. It can also help retain current employees by showing that their employer cares about their overall well-being and is invested in their long-term success.

  • Tax Advantages and Cost Savings: Some employee benefits, such as retirement plans and flexible spending accounts, can offer tax advantages to employees and employers. Additionally, providing comprehensive benefits can help businesses save on turnover, absenteeism, and recruitment costs. Investing in employee benefits can be a smart financial decision that yields long-term cost savings.

Useful Read: How To Calculate the Cost Of An Employee + Free Template

16 types of benefits for employees


Here are the 16 benefits:

1. Health and Wellness: Nurturing a Healthy and Productive Workforce

Offering health and wellness programs, such as fitness programs, wellness challenges, and mental health resources, to support employee well-being.

These health benefits can result in improved employee health, reduced absenteeism, increased productivity, and higher employee morale.

Example of benefits

  • Providing private medical insurance
  • Offering wellness challenges or competitions
  • Organizing stress-relief activities or workshops
  • Offering flexible work hours for employees to prioritize self-care activities
  • Providing access to mental health resources

2. Securing the Future: Retirement Plans and Financial Benefits

Description: Providing retirement plans, pension plans, unemployment insurance, and financial benefits, as well as offering financial counseling, to help employees plan for their future financial security. This can attract and retain top talent, enhance employee loyalty, and promote long-term financial well-being.

Example of benefits

  • Offering a generous employer match on retirement plan contributions
  • Providing access to financial advisors or counselors
  • Offering retirement planning workshops
  • Providing tools for financial goal-setting and budgeting
  • Offering options for flexible spending accounts or health savings accounts

3. Work-Life Balance: Flexible Working Arrangements for Employee Well-being

Providing employees with the ability to work flexible hours, work from home, and have paid leave for caring responsibilities allows for a better work-life balance.

Employees can highly value this and may even be preferred over higher pay in some cases, leading to increased job satisfaction, improved work-life integration, and higher retention rates.

Example of benefits

  • Allowing employees to work from home or have flexible work hours
  • Offering unlimited paid time off or generous paid vacation days
  • Providing parental leave benefits
  • Offering childcare or eldercare support
  • Accommodating work-from-home or remote work arrangements.

Related: Building Engagement with Remote Employees: Tips and Strategies

4. Career Growth: Professional Development and Training Opportunities

Employees should be offered training and development opportunities to enhance their skills and keep up with the constantly changing work environment.

This benefits the employee, who gains new skills and becomes a more valuable team member, and the employer, who gains a better-rounded workforce.

Example of benefits

  • Offering ongoing training and development programs
  • Providing access to industry certifications or professional memberships
  • Offering tuition reimbursement for job-related courses
  • Providing mentorship or coaching programs
  • Conducting regular performance evaluations with feedback and development plans

5. Employee Assistance Programs: Supporting Mental Health and Well-being

Offering employee assistance programs (EAPs) that provide resources and support for employees' mental health and well-being, such as counseling services, stress management programs, and mental health resources.

Useful Read: Stress Leave from work: Implications and Best Practices

This can result in improved mental health and well-being, reduced absenteeism and presenteeism, increased productivity, and higher employee morale.

Example of benefits

  • Providing access to confidential counseling services through an EAP
  • Offering mental health resources and educational materials
  • Offering flexible work arrangements or mental health days
  • Promoting a culture that encourages open communication about mental health.

6. Recognition and Rewards: Motivating Employees through Incentives

Business handshake after signing new contract

Implementing employee recognition and rewards programs, such as peer-to-peer recognition, bonuses, and promotions based on performance, to motivate and engage employees.

This can lead to increased employee motivation, improved wellbeing and job satisfaction, enhanced employee retention, and positive and inclusive work culture.

Example of benefits

  • Implementing an employee recognition program that includes peer-to-peer recognition
  • Offering performance-based bonuses or incentive
  • Acknowledging and celebrating employees' achievements in company-wide communications
  • Providing opportunities for advancement or promotions based on performance
  • Offering tangible rewards or perks to recognize outstanding contributions.

Useful Read: Weighing the Pros and Cons of Performance-Related Pay

7. Employee Perks: Enhancing Employee Satisfaction and Engagement

To enhance employee satisfaction and engagement, offering additional perks and benefits beyond the standard compensation package, such as discounts on products/services, referral bonuses, commuter benefits, and company-sponsored events or activities. 

Useful Read: 6 Metrics to Measure Employee Engagement: The Employers Guide

This can result in improved employee satisfaction, increased employee engagement, enhanced loyalty and retention, and differentiation in the competitive job market.

Example of benefits

  • Offering discounts or freebies on company products/services
  • Providing referral bonuses for successful employee referrals
  • Offering commuter benefits such as transit passes or parking subsidies
  • Providing wellness perks such as gym memberships or wellness coaching
  • Organizing unique company-sponsored events or activities

8. Family-friendly Benefits: Supporting Work-Life Integration

Providing family-friendly benefits, such as parental leave, adoption assistance, and flexible work arrangements for parents, to support employees in balancing their work and family responsibilities.

Useful Read: Adoption Leave: A Guide for New Parents

This can lead to enhanced work-life integration, improved employee morale, increased retention of employees with family responsibilities, and a family-friendly organizational culture.

Example of benefits

  • Offering generous parental leave policies for new parents, providing adoption assistance
  • Offering flexible work arrangements for parents
  • Providing resources for child or eldercare support
  • Promoting a family-friendly culture that values work-life balance.

9. Wellness packages: Encouraging Healthy Habits

To encourage employee well-being, offering wellness packages or programs that promote healthy habits, such as wellness challenges, health screenings, nutrition or fitness programs, and mental health resources.

This can result in improved employee health, increased engagement, reduced absenteeism, and enhanced overall productivity. This is a part of employee benefits package.

Example of benefits

  • Offering wellness challenges or competitions to promote healthy habits
  • Providing on-site health screenings or fitness programs
  • Offering nutrition or mental health resources
  • Providing access to wellness coaching or counseling
  • Offering incentives or rewards for employees who participate in wellness programs.

10. Working Environment: Creating a Positive and Engaging Workplace


Creating a good working environment includes factors such as a well-designed physical workspace, appealing color schemes, and plants, which have been shown to affect productivity and employee satisfaction. 

A positive working environment also allows employees to take pride in their workplace and can impress visitors. This can increase employee satisfaction, and productivity, and create a positive organizational culture.

Example of benefits

  • Providing a well-designed and comfortable physical workspace
  • Offering opportunities for collaboration and teamwork through open office layouts or collaborative spaces
  • Promoting diversity and inclusion initiatives
  • Fostering a positive organizational culture through regular feedback and recognition
  • Providing opportunities for employee involvement in decision-making or company initiatives

11. Paid vacation time: Allowing for Relaxation and Recharging

Offering paid vacation time allows employees to relax and recharge away from work. This can result in improved employee morale, reduced absenteeism, increased creativity and productivity, and a more positive organizational culture.

Example of benefits

  • Providing generous paid vacation time that allows for extended breaks throughout the year and encouraging employees to take vacations by offering incentives or rewards
  • Granting additional days off for special occasions or holidays
  • Allowing remote work when needed to accommodate personal needs

12. Disability benefits: Supporting Employees with Disabilities

Providing disability insurance and other benefits to support employees who have disabilities or are temporarily unable to work due to a medical condition. This can lead to improved employee satisfaction, increased productivity, and enhanced morale.

Example of benefits

  • Offering short-term or long-term disability insurance
  • Providing additional sick days for employees with disabilities
  • Granting flexible work arrangements as needed
  • Providing job accommodations for individuals with disabilities
  • Offering special leave policies or financial assistance for employees caring for individuals with disabilities.

Useful Read: The UK's Incapacity Benefit: Eligibility and How It Works

13. Travel and spending expenses: Making Work Easier

Image of businessman at airport looking at airplane taking off

Offering travel and spend expenses to employees for business trips or other work-related activities. This can make it easier for employees to do their job and may result in improved productivity, reduced stress, and enhanced morale.

Example of benefits

  • Covering employee travel costs for business trips
  • Providing allowances for meals or other related expenditures
  • Granting cell phone reimbursements
  • Covering the cost of memberships or subscriptions needed for work

14. Investment Opportunities: Supporting Financial Well-Being

Offering investment opportunities to employees, such as 401(k) plans or other retirement savings accounts. This can help employees reach their financial goals and may improve employee satisfaction, engagement, and increased productivity.

Example of benefits

  • Providing 401(k) plans or other retirement savings accounts
  • Offering educational resources or seminars on investing
  • Encouraging employees to take advantage of employer match programs
  • Granting access to financial advisors or other resources for financial planning.

15. Relocation and housing options: Making Relocation Easier

Providing relocation and/or housing options to employees who are relocating for work. This can make it easier for employees to transition into their new job or city, leading to improved engagement and productivity.

Example of benefits

  • Covering the cost of moving expenses or providing financial assistance
  • Offering temporary housing during a move
  • Providing resources for finding permanent housing in the new area
  • Assisting with visa applications or other related paperwork.

16. College Grants and Scholarships: Investing In the Future

Offering financial support through college grants and scholarships to employees or their family members. This can help employees invest in their future, increasing satisfaction and engagement and improving retention rates.

Example of benefits

  • Providing tuition reimbursement for current employees
  • Granting scholarship funds for employee's children or other family members
  • Covering the cost of books or fees related to college courses
  • Encouraging continuing education through special programs or classes.

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Customizing Benefits: Tailoring Offerings to Meet Diverse Employee Needs

Customizing employee benefits can be a highly effective strategy for businesses to meet the diverse needs of their employees. Here are some strategies that businesses can use to tailor their offerings:

Employee surveys and feedback

Conducting employee surveys and seeking feedback can help businesses understand their employees' unique needs and preferences.

This can include questions related to health and wellness, retirement plans, work-life balance, career growth, and other benefits options.

Based on the feedback received, businesses can customize their benefits offerings to align with the preferences and priorities of their employees.

Flexible benefit plans

Offering flexible benefit plans that allow employees to choose from a menu of options can give them greater autonomy and control over their benefits.

This can be particularly helpful in meeting diverse needs, as employees can select the most relevant and meaningful benefits.

Flexible benefit plans can include health insurance, retirement plans, wellness programs, and more.

Diversity and inclusion initiatives

Creating a culture of diversity and inclusion can help businesses better understand and address the unique needs of their diverse workforce.

This can involve implementing policies and programs that support diversity, equity, and inclusion and fostering an inclusive work environment where all employees feel valued and included.

By promoting diversity and inclusion, businesses can ensure that their benefits offerings are inclusive and meet the needs of employees from various backgrounds and identities.

Personalised communication

Communicating benefits in a personalized and targeted manner can help employees better understand and appreciate the benefits' value.

This can include providing employees with clear and comprehensive information about their benefits options, eligibility criteria, and how to access and utilize the benefits.

Personalized communication can help employees make informed decisions about their benefits and feel empowered to utilize them.

Regular review and updates

Regularly reviewing and updating benefits offerings can help businesses remain relevant and aligned with their employees' changing needs and preferences.

This can involve conducting periodic audits of benefits programs, benchmarking against industry standards, and making adjustments based on employee feedback and insights.

By customizing benefits and tailoring offerings to meet the diverse needs of their employees, businesses can demonstrate their commitment to employee well-being and satisfaction and ultimately foster a more engaged and productive workforce.

Is it legally binding to provide employee benefits by the UK government?

Handsome lawyer in the law library at the university

There is no legal requirement for employers in the UK to provide specific employee benefits mandated by the government. However, certain benefits are legally mandated or regulated by the UK government. These may include:

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  • Workplace pensions: Employers in the UK are required by law to provide a workplace pension scheme and automatically enroll eligible employees into the scheme under the government's workplace pension reform known as the Automatic Enrolment (AE) scheme.

  • Health and safety regulations: The UK government has health and safety regulations in place that require employers to provide a safe and healthy working environment for their employees. This may include providing necessary training and protective equipment and preventing workplace accidents and injuries.

Employers must stay updated with the latest laws and regulations related to employee benefits in the UK, as these can change over time.


Offering benefits for employees are important in attracting and retaining talent, motivating employees to perform at their best, and ensuring a more productive workforce. It is up to employers to ensure that their benefits offerings are comprehensive, relevant, and legally compliant with the UK government's regulations.

To maximize the impact of employee benefit programs, businesses should consider customizing benefits, regularly reviewing and updating them, and communicating with employees on a personal level.

By taking the time to design and manage their employee benefits programs properly, businesses can unlock the power of employee benefits and create a more engaged, satisfied, and productive workforce.

Rinaily Bonifacio

Written by:

Rinaily Bonifacio

Rinaily is a renowned expert in the field of human resources with years of industry experience. With a passion for writing high-quality HR content, Rinaily brings a unique perspective to the challenges and opportunities of the modern workplace. As an experienced HR professional and content writer, She has contributed to leading publications in the field of HR.


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