Advantages of offering benefits to your employees

Many employers choose to offer benefits that aren’t legally required, such as flexible work arrangements or company-provided meals. Consider these potential advantages of creating an employee benefits package for your company:

Attracting talent

Advertising a strong benefits plan helps generate interest in your company, which may increase your talent pool. Offering comprehensive benefits can indicate a positive company culture and could be a quality candidate’s deciding factor when considering multiple job offers. Some candidates value benefits more than the salary, giving them another incentive to work with your company.

Building loyalty

Many companies offer benefits that grow in value with an employee’s tenure, encouraging long-term commitment. For example, you might offer five days of paid time off (PTO) each year for employees who’ve been with your company for up to five years. Once an employee reaches six years of service, you can increase that to 10 days off per year to reward their loyalty.

Comprehensive benefits help employees feel valued and appreciated, improving company culture and promoting long-term wellbeing.

Improving work ethic

Employee benefits can motivate employees to work hard and invest in your company’s success, especially if you offer unique benefits. The extra compensation shows employees you’re dedicated to their long-term happiness and growth, boosting morale and productivity.

Common examples of employee benefits

While specific benefits depend on the company, some are more common than others. Consider offering these benefits to your employees:

Medical

Some employers cover health insurance costs, while others offer tiered plans for employee discounts. Health insurance can also include health savings accounts (HSAs), flexible spending accounts (FSAs) and health reimbursement accounts (HRAs). Here’s how each one works:

• HSA: Companies with high-deductible health plans may offer HSAs to make it easier for employees to pay their medical expenses. An HSA is a savings account funded with money from an employee’s pre-tax salary. Team members can use their HSAs to pay copays, deductibles and other eligible medical costs.
• FSA: FSAs allow employees to save money for healthcare and dependent care expenses. One of the main differences between an HSA and an FSA is that you can offer FSAs even if your company doesn’t have a high-deductible health plan.
• HRA: An HRA is a type of group health plan that reimburses employees for certain medical expenses, such as acupuncture or preventative care like annual exams. HRAs typically reimburse employees up to a fixed amount yearly. For example, you might reimburse your employees for $5,000 in medical and dental expenses.

Dental

Dental insurance typically covers routine checkups with X-rays, teeth cleanings and emergency dental care. Some plans provide some coverage for additional services, including dentures, tooth extractions, root canals and gum disease treatments.

Vision

Vision insurance usually covers eye exams, glasses, contact lenses and related services. Traditional health insurance doesn’t always cover routine vision care, so offering a vision plan can attract job seekers to your company.

Paid time off

Employers can offer paid sick days, personal days, holidays and vacation days. Some companies offer unlimited PTO, a policy that removes the traditional caps on an employee’s days off each year.

Life insurance

Life insurance allows employees to designate a beneficiary to receive payment in the event of their death or dismemberment. Many employers offer a base amount of coverage, and team members can enroll in additional coverage.

Retirement plans

Pension plans, 401(k)s and other retirement savings plans help employees save for their future. Some employers match employee contributions up to a certain amount, potentially adjusting it for years of employment. For example, you can provide a 4% match for employees with up to five years, a 5% match for employees with five to 10 years and a 6% match for employees with over 10.

How to set up an employee benefits package

Whether you’re creating a brand-new benefits package or updating an existing one, you might follow these steps:

1. Set goals

Before creating a benefits package, consider the goals you’re trying to achieve. You might need one set of benefits to attract top talent and a different set of benefits to increase your retention rate. When you have an established goal, you can make decisions that align with your company’s mission statement and hiring strategy.

2. Determine your budget

All benefits have tangible and intangible costs, so consider your budget before you start exploring your options in detail. If you offer health, dental or vision insurance, you need to pay premiums and administrative costs. Other benefits may come with monthly subscription fees or other expenses, such as wellness programs, fitness classes or gym memberships.

3. Know your legal obligations

Review federal and state laws to understand what benefits are required or optional. You might also consult with your Vice President of Human Resources (HR) or HR Manager when determining which benefits to offer.

4. Choose a partner

Some companies administer their own benefits programs, while others work with third-party providers instead. For example, you might join a professional employer organization (PEO), a third-party that manages HR processes, including benefits, legal compliance and administrative support, for companies.

5. Develop internal policy

Create policies to explain the benefits that don’t require an outside provider. Your policy might include these benefits:

• Free lunches
• Flexible breaks
• Employee bonuses
• Casual Fridays
• Stock options
• Employee discounts
• Wellness programs

6. Use benefits technology

Consider using human resources software to implement and manage your employee benefits program. HR software can automate the process of onboarding employees and enrolling them in their selected benefits. Many HR software options can also track time-off requests, record deductions, remind employees when to renew their benefits and manage payroll.

7. Communicate with employees

Next, inform your employees about the new benefits policy. It’s helpful to outline the policy in your employee handbook to make it clear to new hires. Any time you make changes to benefits offerings, consider sending updates to your team.

8. Seek feedback

Asking employees about their satisfaction with your benefits package gives you insight into what they value and what they aren’t as excited about. This gives you an opportunity to remove some benefits and emphasize those that employees value most.

Unique benefits to consider

Offering nontraditional benefits may help separate your company from competitors. Here are some nontraditional benefits to consider:

Snacks

Supplying snacks and drinks can enhance the employee experience. For example, setting up coffee and tea stations might help employees stay alert in the morning. These stations also offer employees space to socialize, contributing to improved team morale.

Pets in the office

Pet-friendly offices create a fun, welcoming company culture. If you don’t want to allow pets full time, consider hosting occasional bring-your-pet-to-work days. If your company does allow pets full-time, consider creating accommodations for employees with allergies, such as pet-free workspaces.

Gym memberships

Offering free or discounted memberships to a local gym gives employees affordable and accessible workouts. Some companies also have office workout rooms for workout sessions before or after the workday.

Career development

Regular professional development opportunities, tuition reimbursement, free classes and other career development perks can help you attract motivated professionals who want to grow with your company. Professional development also makes it easier to engage in succession planning, as it can help you identify top employees to promote or transition into different roles.

Childcare

Having an on-site daycare or offering a childcare stipend for working parents shows employees your workplace is family-friendly. Sponsoring childcare can also help you retain current employees if they decide to start or grow their own families. Flexible work arrangements can also support parents’ needs, as they can help them to balance their personal and professional responsibilities.