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Employee Benefits: Types of Perks to Offer Employees

Recruiting and retaining excellent employees can be your business’s biggest asset and helps accelerate economic growth. Hiring talented employees dedicated to your business leads to new ideas, improved communication and greater productivity. Businesses can attract top-quality candidates by offering competitive and complete benefits packages. Developing a benefits package and determining the right perks to offer for your business needs is an important step to ensuring your business remains competitive in your industry.

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Where to start with employee benefits

Understanding what employee benefits are commonly offered in your industry, what benefits your team members expect to receive and what your business can afford to provide are all important components of establishing a benefits package. The benefits package includes any compensation, bonuses or perks outside of an employee’s wage.

The type of benefits varies by industry with most industries providinghealth insurance and paid time off to salaried employees. Technology and other highly competitive fields may offer more fun-based perks, such as open-plan office spaces and break areas with games. Consider your industry, what your competitors are offering and what perks fit with your company’s culture to determine the right benefits for your business.

Some benefits your business may consider providing can include:

  • Health insurance
  • Paid time off
  • Flexible scheduling
  • Retirement plans
  • Summer Fridays
  • Profit-sharing
  • Parental leaves
  • Professional development
  • Sabbaticals
  • On-site fitness center or gym membership
  • Student loan repayment assistance
  • Coffee and snack bars
  • Transportation reimbursement
  • Pet-friendly office space

Related:10 Recruiting Strategies for Hiring Great Employees

Pros of providing benefits

In addition to increasing employee satisfaction, offering a fair benefits package has many positive outcomes for your business, including:

Recruit high-quality candidates

A strong benefits package is a great tool to use in recruiting new employees to your business. Candidates often look for a strong compensation package and work-life balance. Benefits such as flexible scheduling, summer Fridays and office coffee machines may not add a significant cost to the business but can add significant value to prospective employees. Ensuring your benefits package is comparable or superior to other businesses in your area and industry can help you recruit quality candidates.

Employee retention

Delivering on the benefits offered while recruiting employees and continuing to ensure your benefits are competitive can motivate employees to continue working for your business. Non-salary based perks encourage people to stay with a company and what they enjoy about going to work every day. Offering an on-site gym, excellent health insurance and parental leaves can be benefits that make employees want to stay with your business.

Negotiate lower insurance costs

Businesses are able to independently negotiate with insurance carriers or join associations who negotiate on their behalf for the best insurance rates. Having a larger group of people on the insurance plan allows for collective bargaining for coverage and prices. Some employers may offer health incentives, such as gift cards or discounts on gym memberships or for participating in a company-wide healthy habits initiative.

Increase productivity

Providing benefits that employees consider to be valuable leads to healthy, satisfied team members. Preventative health services can lead to fewer sick days and more focused time at work. Additionally, when people receive benefits, they feel valued and often show a higher commitment to the business, because their personal goals align with the business’s goals. Happy employees are generally more creative, display more willingness to collaborate and are productive during the workday.

Related:Unlimited Vacation Policy: Why Employers Should Consider It

Actions to take when selecting employee benefits

When determining what benefits to offer employees, consider your industry and your company’s needs. Follow these four steps to building an appropriate benefits package:

  1. Review legal requirements for your area. Federal and state governments mandate minimum time off requirements, health insurance provisions and parental leave under the Family Medical Leave Act (FMLA). Research which laws apply to your business and any additional state or local regulations to ensure compliance. Any required benefits must be offered and can be the starting point of your benefits package.
  2. Establish a total compensation budget. After determining what benefits you must offer, create a budget that includes salaries, required benefits and business expenses and determine how much your business has left in the budget for the benefits package. The final figure is what you can use to determine what other benefits your business can afford to offer your employees.
  3. Choose necessary benefits.Research your competitors and survey your employees to determine which benefits are necessary to remain competitive. These often include paid vacation time, health insurance and paid parental leave. Your industry and corporate culture will determine what other benefits are highly regarded by employees.
  4. Determine extra benefits. The final step is to determine what extra benefits you can afford to offer within your budget. These benefits might include a gym membership, office snacks and transportation reimbursement, but vary based on your location and what your employees find most beneficial to achieving work-life balance.

Employee benefits FAQ

Here are some frequently asked questions about employee benefits packages:

Are employee benefits negotiable?

Benefits packages are commonly negotiable, but it depends on what is feasible for your business. If a candidate submits a salary counter-offer, you may choose to offer other benefits in lieu of an increased salary.

Will all employees receive benefits?

Many companies have contractors in addition to salaried, hourly and part-time employees and may offer different benefits packages to each group. Depending on local laws, you may choose not to offer paid time off to part-time hourly associates, but offer this to full-time hourly and salaried employees. Contractors can be employed directly by your company or by a third party agency, regardless your company is not legally required to offer a benefits package.

Are employee benefits taxable?

Employees are required to pay income taxes on their salary, bonuses and any supplemental income from benefits, such as a relocation package. Most fringe benefits that employers offer are not subject to income tax, including healthcare flexible spending programs and athletic memberships.

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