Employee benefits are any type of tangible or intangible compensation provided to employees in addition to their base wages or salaries. An employee benefit can be any type of non-wage gain associated with an employee’s position, whether it is obligatory or voluntarily provided by an employer.
Employee perks have become an essential component of any competitive compensation package. Benefits and incentives, which range from legally mandated insurance to complimentary snacks, can play a significant influence in attracting and retaining talent.
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Why Employers Offer Employee Benefits
Benefit packages consume a significant amount of time for many HR professionals. And for good reason: they’re one of the most fundamental employee engagement and retention measures, as well as a source of talent attraction.
According to an extensive study conducted by the Society of Human Resource Management (SHRM), 92 percent of employees regard employment perks to be crucial for their overall job satisfaction. Almost one-third of employees indicated work benefits as the primary reason for seeking a job outside their organization, as well as for staying at their current employment.
Benefits are also among the top motivators that candidates search for in job postings. This suggests that providing benefits and advertising them in job adverts and on your careers page is an important component of your employer branding efforts.
Employee perks also allow you to take care of high-performing staff without having to continually invest in exorbitant pay rises. Employees may accept lower salary if they have comprehensive health insurance, flexible working hours, and other advantages that are vital to them.
Type Of Employee Benefits
The principal forms of benefits are those that are most regularly met in enterprises throughout countries. There are generally four types of insurance: health insurance, life insurance, disability insurance, and retirement plans. Ofcourse, there are many other forms of employee benefits and perks out there, but here we shall discuss four of these.
Health insurance (dental, medical, and vision), life insurance, and disability insurance are all included in this category. Many nations require businesses to provide health insurance or some form of medical plan, and there is frequently publicly available medical care funded by companies. Employee benefits Facebook is one such example which covers a wide range of insurances.
Life insurance demonstrates that the employer not only cares about the employee, but also about their family. If the employee dies, their family will get a lump payment to cover funeral and other related expenditures, as well as their cost of living for a specified length of time. Long-term and short-term disability or illness may be covered by disability insurance.
Employees can feel more comfortable about their future after retirement because to retirement perks. In the United States, one example is the 401(k), in which both the firm and the employee make regular defined payments to the employee’s account.
Employees can select how to invest their contributions or how much to deduct from their paychecks through pre-tax deductions. There’s also the defined retirement plan, which is wholly paid by the business and provides employees with a fixed monthly payout upon retirement. The sum can be calculated depending on retirement age and length of service with the company.
Paid time off is required by law in many nations. Employers all throughout the world may choose to extend legally mandated leave, such as by providing additional sick days. Employers in countries such as the United States are not required to provide paid vacation leave, but those who do so voluntarily might gain a competitive advantage in talent attraction and retention.
Other types of leave, such as parental or bereavement leave, are treated similarly. Other time-off perks may include training days and sabbaticals, which are normally optional for employers but can have a similar influence on employee engagement. Employee benefits Google is an excellent example of attractive time off perks that the employees get.
This category includes any money given to employees in addition to their regular salary. This money includes bonuses, commissions, awards, and gifts, as well as indirect compensation such as stock options and profit-sharing agreements.
Contractual or discretionary bonuses may include:
- Commissions on sales
- Performance awards given to individuals or to the entire corporation
- Gifts in one lump sum
These bonuses are typically part of incentive schemes that encourage staff to deliver more and higher-quality output. They may also aid in maintaining morale.
Employees value all benefits. Employee benefits have a considerable impact on HR administration, particularly when regulatory difficulties are involved. Such benefits schemes that may seem expensive at first will actually save money in the long run.
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