When we evaluate various job opportunities, it’s easy to think that for most of us, the most important consideration is salary. However, studies reveal that this is often not the case. A Glassdoor survey revealed that 5 out of every four workers would rather have additional benefits instead of a pay rise. Here’s a detailed look at employee benefits.
What are Employee Benefits?
Employee benefits are all types of compensation offered to employees on top of regular wages or salaries. There are many variants of employee benefits. They are a key component of employees’ overall compensation package – particularly for small and medium-sized enterprises that don’t have the resources to pay higher salaries.
Employee Benefits Examples
If you’re providing employee benefits for the first time, you should provide the kind of benefits that your workers need. While a billiard table and a meditation room may seem useful and fun, those may be the kinds of benefits that your employees don’t need. Some of the most popular employee benefits include:
- PTO (Paid time off), such as vacation and sick days
- Health insurance
- Remote and flexible working options
- Retirement accounts or benefits
- Long-term disability
- Short-term disability
- Life insurance
- Financial planning resources
- Healthy lifestyle or fitness incentives
- Professional development
- Identity theft protection
- Employee assistance programs (for emotional and mental wellbeing)
- Sign-on bonuses
- Incentives for home office improvements for remote workers
- Childcare benefits
- Student loan payment benefits
Examples of Employee Benefits Structures
Once you’ve decided on the types of benefits you will offer your employees, you need to structure them. Typically, there are two methods of structuring, contributing, and providing employee benefits:
- Organizational-oriented benefits
- Consumer-oriented benefits
Depending on the kind of benefits you want to provide your workers, you can either offer only consumer-oriented, only organizational-oriented, or a blend of the two. Here is how each option works:
Employee benefits that are organizational-oriented are selected and owned by the employer. This means you, as the employer, provide defined or specific employee benefits of your choice. Your employees only need to decide whether they will accept your benefits or not. Employees don’t have a say on the type of benefits that the employer will offer them. Organizational-oriented benefits include:
- 401(k) or the retirement pension
- The standard group health insurance policy
- A prescribed wellness program
Consumer-oriented employee benefits are selected and funded by employees. With this option, you’ll provide a given amount and allow your workers to personalize their benefits to suit their needs. This empowers your employees to make healthcare choices that suit them. Consumer-oriented benefits include:
- HSA (health savings account)
- Stipends for wellness activities
- Reimbursement plans, such as HRA (health reimbursement arrangement)
Traditionally, health insurance takes the form of an organizational-oriented employee benefit. Today, however, employers are increasingly enabling their employees to make healthcare decisions by providing HRAs. With HRA, you get to repay your workers, tax-free, for what they spend on personal health insurance premiums as well as 200 medical expenses that qualify. Fringe benefits can enable you to attract talented employees as well as retain current employees. For instance, research conducted by Zenefits, an HR software firm, revealed that half of the employees of small businesses were sticking with their current employers because of the health benefits they receive.
How to Get the Right Employee Benefit Plan?
In the current scenario, it’s important to have access to the right employee benefits for a safe lifestyle. To get the right employee benefits plan for your business needs in CA, contact our insurance experts at Knight Insurance Services.