With the demand for a work-life balance on the rise, a current pandemic, and a massive job market, employee benefits are more important than ever. If companies want to stay relevant up against competitors, offering a great benefits package is the place to start.
This article will dive into the importance of benefits for both the employer and the employee, how much companies spend on benefits, and which types of benefits are most desirable right now.
Read on to learn more about this topic! Click on the sections below to jump right to your specific question.
- Why Are Employee Benefits So Important?
- Why Are Benefits Important to Employees?
- Are Benefits Better Than Higher Pay?
- How Much Do Employers Spend On Benefits?
- What Is the ROI of Benefits, For Employers?
- What Are the Benefits Employees Want Most Right Now?
Why Are Employee Benefits So Important?
Attracts Talent
An excellent employee benefits package will encourage talented employees to apply. It is one of the most effective ways to stand out in the current job market and makes positions desirable. At the end of the day, it plays a large role in what ultimately sells the role to a potential employee.
Not only do they spark initial interest, but benefits help to create and sustain a healthy relationship between employer and employee. A foundation of trust is built when an employer offers great benefits upfront as it demonstrates to job seekers the commitment that companies have to taking care of their employees. If you are curious, check out this post that further explains ‘why are employee benefits important’.
Decreased Turnover
Over time, that trust grows into loyalty. Nearly 70 percent of employees feel more loyal to companies with good benefits. They improve turnover rates and lengthen the amount of time an employee stays with their company. After all, why should they even need to search elsewhere, let alone leave, if their current employer is satisfying or exceeding their needs by providing necessary benefits?
Productivity
If a company offers a competitive wellness program that employees engage with regularly, they will be happier and healthier, and that puts them in a position to succeed. It will reflect on their work performance, which, of course, will result in a better outcome for the company as a whole.
Contributing to the wellbeing and happiness of an employee also cuts down on the amount of sick time they are likely to need and time they spend at work is less inhibited by illness. Contributing to the wellbeing and happiness of an employee also cuts down on the amount of sick time they are likely to need and time they spend at work is less inhibited by illness. Overall, helping you to combat the causes of employee absenteeism.
Why Are Benefits Important to Employees?
Healthcare
Medical care is costly. A huge advantage of benefits for employees is because they help to lower the amount spent on healthcare. The introduction of COVID-19 has reminded the workforce that proper medical insurance for employees and their families is paramount. When an employee is provided the comfort that their employer is going to shoulder a good portion of these costs, it eases their financial burden.
Additionally, employees are encouraged to seek out preventative care when insurance lowers the cost of these expenses and consequently they are less at risk of chronic health conditions.
Retirement
None of us want to work forever and a retirement package paves the way for employees to be able to retire from their career comfortably and at a reasonable age. Recent and current events have employees on edge about job security and knowing they have a growing retirement fund reduces those anxieties.
Some of the ways these benefits can be provided are:
- 401(K)
- Employee pension plans
- profit-sharing
- stock bonus
Work-Life Balance
Having a healthy boundary between work and home has become increasingly important to employees. Acquiring this balance decreases stress and improves quality of life. Employees simply aren’t as willing to remain at a job that does not ensure a work-life balance, so offering paid time off and structuring the workplace in a manner that gives employees the ability to leave work at the office is crucial.
Morale
Benefits help employees to feel rewarded for their hard work and inspire confidence. Overall attitude and company culture in the workplace improves when employees feel recognized and valued. Feeling like they are in a mutual give-and-take relationship with their employers makes a significant difference and encourages employees to perform at their best. They want to feel good about what they do and it feels more meaningful to contribute to a company who treats them well.
If you would like to see how benefits will impact your organization, you might want to try using an employee benefits survey to gauge your employees’ thoughts.
Are Benefits Better Than Higher Pay?
It’s not all about income. Offering benefits gives employers a notable advantage over companies who don’t. A recent study by the American Institute of Certified Accountants reported that 80% of respondents chose a job with benefits over an identical position that offered 30% more salary, but no benefits.
As previously mentioned, benefits attract skilled talent and imply to a potential employee that a company is invested in their health and happiness. Even if an employer promotes excellent company culture in other ways without benefits, it’s going to be more difficult to secure new employees. Excluding benefits gives off the impression that a company cares less about their wellbeing than competitors who do offer them.
Benefits make a job appear more attractive because they can lighten the load of day-to-day life by offering things such as:
- Childcare
- Commuting subsidies
- Gym membership discounts
- Wellbeing programs that focus on physical, mental, and financial health
Employees who engage in these programs often save time and keep more in their wallets. Additionally, they aid in overcoming the looming financial and emotional stress of student debt that is affecting more and more Americans each year. They also promote a healthier lifestyle and encourage employees to invest in their own wellness.
While a hefty paycheck sounds great, when it comes down to higher income vs. benefits, the latter seem to rank higher.
How Much Do Employers Spend On Benefits?
The average cost of civilian employees as reported by the U.S. bureau of Labor Statistics in 2021 was $38.91 per hour. Of that amount, 69% of it was wages and the other 31% was benefits.
It’s tough to break down those numbers by company size due to various factors, but small businesses often deal with a tighter budget and have to be more vigilant about cutting costs. On that note, check out this ultimate guide to small business employee benefits & 4 ways you can get started. If you are looking to learn more about benefits at larger companies, check out this guide to employee benefits for mid-size businesses.
It’s essential for a business of any size to listen to their employees and provide them with the benefits that they actually want, so that money isn’t being wasted on programs that are under utilized.
What Is the ROI of Benefits, for Employers?
Companies have come to learn that investing in their employees via benefits has major positive effects on their business, including two key things in particular: it saves both time and money.
Below are some of the most prominent benefits right now and the return on investment they bring to employers:
- Healthcare – 200-300 percent (this usually occurs between 2-9 years)
- Wellness programs – 600 percent
- Mental health benefits – 162-218 percent
- Flextime and telecommuting – 170-445 percent
- Financial wellness – 300-1500 percent
Though the time-frame of the return can vary, spending money in the right places upfront sees a great return on those funds.
What Are the Benefits Employees Want Most Right Now?
These days, employees want benefits that promote their wellbeing in a number of ways. A study done by GlassDoor reported that 94 percent of employees desire benefits that are going to meaningfully impact their quality of life.
Here are some of the most in-demand benefits that positively impact employees’ lives.
Remote Work
At the height of COVID-19, remote work was adopted as the only option for companies. However, as people slowly return to the office, many of the reasons why remote work is such a perk have been highlighted. It saves on commute time and childcare expenses, and allows for a level of flexibility that people have come to not only enjoy, but also rely on.
Health Insurance
While healthcare has always been a fundamental benefit, the relevance of good medical insurance has skyrocketed in the face of a pandemic.
Paid Time Off
Employees want vacation time, personal/sick days, and family leave. People in recent years have been more dedicated to self-care than previous generations, so planning vacations and time to get away from work is just as important as the ability to take a mental health day when needed.
Flexible Schedule
Flextime has become an increasingly desirable perk as it allows employees to schedule appointments and attend important personal events without having to miss work and use their PTO. It also allows them to restructure their workday/work week when they might need to due to mental health reasons or other unforeseen circumstances.
4-Day Work Week
There’s been a buzz around the discussion of a 4-day work week in the past few years. Recently, Microsoft Japan reformed their work week from five days down to four, but did not decrease pay. This led to a 40 percent increase in productivity and saved costs in both printing and electricity.
40 companies in the U.S. and Canada have followed suit, as of June of 2022. They are participating in a study run by the non-profit organization 4 Day Week Global to deduce whether or not the implementation of this work week model will increase employee happiness, health, and productivity as expected. While this may seem like a relatively slow introduction to the execution of a 4 day work week, the concept is certainly beginning to catch fire.
Student Loan Assistance
Many recent graduates struggle with keeping up with payments on their student loans. On average, recent graduates owe around $28,950 in student loans. If employers want to attract the best and brightest that are new to the workforce, giving employees that boost up the ladder out of the pit of student loan debt is one of the best ways to do it. It also makes sense from a savings perspective; you can give your employees a car insurance discount if they maintain a good driving record. This offer can be a great way to help them finance a car and keep them safe on the road while saving your business money in turn.
Wellness Programs/Fitness Benefits
Around 70 percent of employers with 50 or more employees offer wellness benefits and that’s because employees love them! Between the great return on investment and positive effects on the employees, wellness programs are a crucial part of a benefits package.
The COVID-19 pandemic has increased the need for wellness benefits as people’s struggles with mental health issues such as anxiety and depression have sharply inclined. These changes have been detrimental to people’s overall wellbeing and the dedication to improving physical and mental health is on the rise.
That’s where IncentFit comes in!
Wellness programs can come in various shapes and forms. Some employers like to focus on gym membership and fitness equipment reimbursement. Others prefer to incentivize employees to get active by tracking certain physical activities, then rewarding them for those activities. Whatever it may be, IncentFit offers a variety of products that can accommodate the specific needs employers have for their workforce.
