Employee benefits shouldn't just look good on a PR blurb. Here are the benefits that add value to your employees' lives.
- An employee benefit is anything the employer provides for the employee in addition to salary or wages.
- Benefits are important because they increase employee satisfaction and promote work-life balance.
- To create a good employee benefits strategy, talk with your employees to see what kind of benefits they want.
While employees may love having an office open to puppies or a ping-pong table in the breakroom, the actual value those perks bring to employees is relatively low. But with over 57% of job seekers counting benefits and perks among their top considerations before accepting an offer, it is important for companies to offer benefits and perks that attract, retain and impress employees.
To help you get an idea of what a valuable benefit looks like, we spoke to small business owners and workers to see what benefits they appreciate most, and why.
What are employee benefits?
Employee benefits, including perks and fringe benefits, are anything a company provides for its employees outside of a salary or wage. These are some common employee benefits:
- Insurance (medical, dental, vision, etc.)
- Healthcare or wellness programs
- Time off (vacation, sick time, PTO)
- Profit sharing
- Retirement benefits
- Tuition reimbursement
- Child care
- Gym memberships or discounts
- Commuting or travel assistance
- Remote work options
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Why are employee benefits important?
Benefits show your employees that you care about each of them as a whole person, not just as a worker. A good benefits package supports employees' health, future finances and work-life balance, all of which contribute to employees' satisfaction and overall productivity.
Furthermore, strong benefits can differentiate you from your competitors, helping you attract and retain top talent.
Best real-life employee benefits
Here are some of the benefits that employees value the most and look for when they're considering job offers.
Unlimited paid time off, or PTO, is an increasingly popular alternative to banked and accrued PTO. The major advantages of unlimited PTO are the trust in your employees it demonstrates and the flexibility it allows them for work-life balance.
"One of the benefits I'm most proud to offer is unlimited PTO," said Dan Bailey, president of WikiLawn. "Employees are able to take time off as needed for sickness, personal time or vacations. They don't need to justify it or barter with managers. As long as they're getting their work done and meeting targets, we treat them like the responsible adults they are."
Custom benefits packages
While this may not be feasible for all companies, creating a custom employee benefits package based on each employee's needs can go a long way in making your employees feel valued.
"Employees with no children or partner have very different desires than those who are married with children," said Dea Hoover, founding owner and operator of Are We There Yet? "As a single person, retirement, long-term care, health insurance and healthcare are important. For employees with children, scholarships, purchase of school supplies, and room and board may be a benefit that is thoughtful and high on the list."
"My company gives me a monthly allowance to spend on pretty much anything I want," said Andrew Dvorscak, growth marketing associate at Zestful. "I use it for my Hulu and Spotify accounts, and I also use it to pay for fun things I want, like video games or dinner at a local restaurant. While these kinds of perks do have a monetary value tied to them, they feel so much more valuable to me because they are things I'm already doing in my daily life, and I appreciate that my employer is willing to invest in [that]."
This is a more traditional benefit, but its effectiveness has remained steady throughout the years. A performance bonus gives your employees a sense of ownership and control over their salary, and it can motivate them to work harder.
"If they do their job and show good performance, then they will be rewarded with something they deserve," said Keith Myers, managing editor of The Hempire.
Paid parental leave for nontraditional families
While parental leave is a mainstay of benefits packages, few packages include parental leave for both parents, adoptive parents or same-sex couples. The definition of family is changing to include many more people's situations than it has in the past, and a benefits package that recognizes that will help you attract employees who require flexible support.
Benefits for interns
Interns have long been regarded as the bottom rung of the corporate ladder and thus excluded from salaries and benefits. But companies have started to recognize the importance of interns and give them competitive benefits packages. For example, Facebook provides its interns with healthcare coverage and free housing as well as a salary.
Flexible scheduling, or the ability to adjust your full workday to fit the hours that suit you best, is a highly desirable employee benefit. It recognizes and allows for the fact that many employees have a great deal going on outside of work that may not fit within a regular workday schedule. For instance, flexible scheduling allows an employee to pick their kids up from school or leave early for a doctor's appointment and pick their work back up afterward.
"[Flexible scheduling] shows that you trust your team to get their work done, and gives them the time and space to do the things they need to accomplish off the clock," said Deborah Sweeney, CEO of MyCorporation.
How to create a good benefits strategy
When creating your benefits package, the first thing you should do is familiarize yourself with the legal requirements for employee benefits. Each state has its own requirements, but there are some universal laws:
- You must provide employees time off to vote, serve on a jury or perform military service.
- Your business must comply with all workers' compensation requirements.
- You must pay state and federal unemployment taxes.
- You must contribute to state short-term disability programs, where applicable.
- You must comply with the Family and Medical Leave Act (FMLA).
As an employer, you are not required to provide these benefits:
- Retirement plans
- Health plans (except in Hawaii)
- Dental or vision plans
- Life insurance
- Paid vacations, holidays or sick leave
The next most important thing to do, said Zane Dalal, executive vice president of the Benefit Programs Administration, is to listen to your employees.
"I cannot stress this enough," he said. "Send out an officewide survey. Take down notes and suggestions from an all-staff meeting. Hearing directly from your employees is key when developing or redeveloping any benefits packages in the workplace."
Incorporating your employees' thoughts and wishes in your benefits package helps make them feel heard and valued, which increases employee satisfaction.
You can also look at your competitors, comparing your benefits package to theirs to get an idea of where your company stands against others in your industry (i.e., how you look against other companies to a job seeker comparing offers).
"Look at companies similar to yours and check out their benefits, then ask yourself, 'Would I drop everything to work at this company for these benefits alone?'" said Bailey.
If you are flexible in which benefits an employee can use, you will be significantly more attractive than a company that has one standard package for every employee. This doesn't mean that you need to design a custom package for everyone – though you should if it's possible – but that you can create space for employees to prioritize their unique needs.
"Employees find benefits valuable when they know they'll actually use them and will see a real difference in the quality of their life," said Adam Gordon, co-founder of PTO Genius. "There are a lot of employee benefit options out there, but they're not [always] meaningful to employees because the benefit may not apply to them (e.g., pet insurance for a non-pet owner)."