Employers constantly work towards creating a perfect mix of employee benefits to retain their best team. These benefits are the perks they offer to employees, besides the standard compensation, for the overall value proposition of employees. Alternatively, many workers consider employee benefits complementary to salaries, wages, or commissions. Therefore, companies must find the right benefits to satisfy and secure employees. As such, we break down the basics of employee benefits and why they are crucial.
What are Employee Benefits?
Employee benefits are all the additional non-salary related perks employers offer their employees. These benefits can motivate them to join or stay with your company long-term. Employee benefits services are used to create a lucrative salary package.
Why do Companies Offer Benefits?
Companies mostly offer benefits as a retention strategy for top talent in the organization. Most employees deem benefits as an integral part of their job for improving job satisfaction. Employers can also retain high-performing employees without investing so much in salary increments.
Types of Employee Benefits
Insurance covers health, disability, and life insurance. Health insurance is often mandatory to ensure the employee’s well-being is prioritized. On the other hand, life insurance takes care of an employee’s family when they die. Disability insurance covers short- and long-term illnesses or disabilities as a result of them working in the organization.
Retirement benefits help employees secure their future after retiring. In the United States, employers offer 401(K) retirement plans where a percentage of an employee’s salary is deposited. Employers can also contribute by matching a specific percentage of workers’ contributions. Then, when retiring, employees can receive this balance on their accounts.
Paid vacations and holidays are standard benefits for most employees, and the amount of paid vacation depends on the period the employee has been in the company. The number of vacation days is calculated from the number of hours worked.
Some employees are allowed up to 12 weeks of unpaid leave with a guarantee of job protection yearly, especially after childbirth. Employee benefit services also provide leaves for a child, spouse, or parent with a serious medical condition. This family leave can be used intermittently or as a straight period.
Common Employee Benefits
- Pension/Retirement plans
- Private health care plans
- Training and development
- Life insurance
- Extended leave
- Stock option plans
- Bonuses and Awards
While these are the basics of employee benefits, every company has its approach to fulfilling the same. Some are mandated by the government and should be provided per the regulations. However, for the flexible ones, employers can go higher to ensure their employees get the best.