According to the U.S. Bureau of Labor Statistics, 50.5 million people quit their jobs in 2022—leaving employers to backfill their roles and spend trillions on recruiting and onboarding new employees. Companies looking to stabilize and grow their business need to improve their employee retention. But what is the best way to do that?
One method is to introduce new additions to your benefits packages in response to the tight labor market. After all, the better the employee benefits are, the better the employee experience is, which can make you an employer of choice.
In this article, we’ll go through eight common benefits options you can offer to make your employee benefits package stand out and improve your company culture.
See how you can use fringe benefits to your advantage at your organization in our guide
1. Family benefits
Many employers recognize the importance of supporting their workers through the financial challenges of building a family. Family benefits help reduce the financial blow of costly procedures, such as in vitro fertilization (IVF), donors and surrogacy, or other reproductive technologies and fertility treatments.
While many employers offer a group insurance policy or another type of health benefit, not every plan covers these expenses. If your group health insurance plan doesn’t cover these kinds of family-planning benefits, you can supplement the plan with a group coverage health reimbursement arrangement (GCHRA), also known as an integrated HRA.
If you don’t have a group health plan, you can still offer an HRA in the form of a qualified small employer HRA (QSHERA), ideal for organizations with fewer than 50 employees, or an individual coverage HRA (ICHRA), which is for employers of any size.
With all three HRA options, employers set a monthly allowance for employees to use toward out-of-pocket expenses. Employees buy qualifying items or services—including many fertility treatments—and then employers reimburse them up to their available allowance.
Several of the eligible family planning and child care expenses that employees can pay for with an HRA include:
- Pregnancy tests
- Fertility treatments & monitor
- Midwives
- Childbirth classes
- In vitro fertilization
- Adoption (and associated medical costs)
- Breast pumps & accessories
- Infertility treatments
- Cord blood storage
- Ovulation monitors
- Lamaze classes (for mothers only)
- Breastfeeding classes
- Doula or birthing coaches
- Diaper rash creams (over-the-counter)
This makes an HRA not only a good perk in general but an excellent option for those looking to start a family.
You can also add a stipend to a health insurance policy or an HRA to offer your employees even more coverage. A health stipend is a set amount of money employees receive to buy necessary medical services. Like GCHRAs and ICHRAs, stipends have no minimum or maximum contribution limits. But because they’re not considered a formal health benefit, they’re taxable.
The great thing about a stipend is that you can set it up to cover anything. So whatever your employees are looking for to support their family-building needs—like egg retrieval, surrogacy services, child care, or IVF—a health stipend can help them meet their goals.
2. Retirement benefits
Retirement savings plans are a valuable benefit that impacts employees' present and future lives. They’re a great way to create a competitive benefits package. Some business owners offer their employees 401(k) accounts or profit-sharing, which helps employees save for retirement and aids employers in their retention efforts.
Here are some of the pros of offering retirement benefits:
- You can receive some significant tax advantages2 for your business
- Employers offering a 401(k), SEP, or SIMPLE IRA for the first time can qualify3 for up to $5,000 in tax credits for three years.
- If you base the benefit on profits, it may enhance employee motivation and productivity
- Retirement benefits give you a recruiting advantage over other companies that don’t offer a retirement account
- If your business is new and you can’t offer competitive salaries yet, you can use a retirement plan to supplement your compensation package as an extra incentive.
If you want to offer retirement benefits, you should get professional advice and guidance. Pension regulations are complex, and the tax aspects of retirement plans can be confusing for beginners.
3. Wellness benefits
A healthy employee is generally happier and more likely to be productive at work. A way to invest in your staff’s well-being is with wellness perks.
A wellness stipend, or wellness spending account, is an easy way to set an allowance for employees to pay for wellness benefits. You could also create a workplace wellness program to support your employees if they’re in the office.
Example wellness perks could include:
- Gym memberships and fitness classes
- Discounted workout equipment
- Free access to meditation apps or programs
- Onsite or virtual health services
- Ergonomic office furniture
- Mental health support services
Time away from the office is another valuable wellness perk you can offer your employees to promote a healthy work-life balance. You can encourage employees to take time by offering mental health days, paid time off (PTO), parental leave, travel stipends, bereavement leave, sabbaticals to spend time with loved ones, and more.
4. Work-from-home benefits
One of the most attractive perks an employer can offer is workplace flexibility. According to 2023 statistics4, only 16% of companies worldwide are fully remote, but 74% of current employees say having a remote work option would encourage them to stay with a company.
Allowing employees to work remotely or choose a hybrid work model lets them work in their most comfortable surroundings. A growing number of people want the option to work remotely as it’s often a less stressful environment and provides a greater work-life balance.
If you’re already allowing your team to work remotely, you can support your remote workforce with a remote work stipend. This stipend allows employees to cover the extra costs incurred by working from home, such as purchasing a standing desk or new office chair.
If you’re thinking about going hybrid, allowing flexible work schedules, like a 9/80 work schedule, is a great way to boost productivity, improve recruitment and retention, and increase trust throughout the company.
5. Technology benefits
Another popular perk in an increasingly remote world is a technology benefit. Technology stipends help employees buy technology-related items and services, like internet, cell phones, software subscriptions, and device upgrades.
You can cover remote employee expenses through a lump sum reimbursement or in monthly, quarterly, or annual installments. You should outline what you will reimburse employees for and up to what amount in your company’s expense policy.
Technology stipends don’t just financially support your employees and improve job satisfaction. It helps them stay updated with evolving technology trends, making your business more competitive and productive.
It also gives your employees a sense of autonomy. They can choose the items and services they need to make their workspace more effective so they can reach their fullest potential.
6. Transportation benefits
If you need your employees to commute to a physical location, offering commuter benefits can help relieve the financial burden that gas and transportation costs place on employees.
Commuter benefits allow employers to set aside pre-tax funds to pay for qualified mass transit and parking expenses associated with their employees’ commute to work. Some benefits, like mileage reimbursements, are taxable but can still provide value to your employees.
These financial benefits can help offset the frustrations that come with commuting and make it easier for employees to afford the costs of coming to a central location, especially when remote work isn’t an option.
Transportation benefits that encourage public transit use can also reduce your environmental footprint, which can be appealing to customers, employees, job candidates, and your local community.
7. Lifestyle benefits
The costs your employees experience in their daily lives vary. But with inflation, these costs are likely getting more expensive. You can help offset their daily expenses with a lifestyle spending account (LSA).
LSAs are flexible benefits that support employees’ physical, mental, and financial wellness. Unlike flexible spending accounts (FSAs) or health savings accounts (HSAs), LSAs are often taxable. But they’re more customizable and can cover a wider range of expenses, like groceries and meal delivery services, charitable donations, financial planning services, pet insurance, and more.
LSAs typically work on a reimbursement basis and have no employer contribution limits. So you can offer as much allowance as your budget allows. You can also choose whether to let unused allowance amounts roll over and which expenses are eligible for reimbursement.
An LSA is an inclusive way to support all your employees’ diverse needs. No matter their individual needs, whether they work remotely or in the office, your staff can choose how to spend their allowance to best support their life.
8. Education benefits
One of the best ways to support your employees professionally is by offering education benefits. These generous benefits help workers learn new skills, finish their degrees, afford professional development courses, gain certifications, or even pay off their student loans.
Education stipends are a simple way to support your employees in this endeavor. Like other types of stipends, you can provide a monthly, reimbursable allowance for education expenses such as tuition, textbooks, online courses, training, and more.
Offering a stipend for your employees to increase their knowledge is a great way to create a skilled workforce that can contribute to your business's success. It can also help you retain your staff, improve morale, and provide more career advancement opportunities at your organization.
Conclusion
The key to attracting and retaining talented employees could be as simple as offering a competitive employee benefits package. It can be a differentiator in increasing employee engagement, loyalty, and productivity. If you have extra benefit dollars, an excellent way to stop the flow of employees resigning could be spending that money on supplemental benefits.
If you’re ready to create an excellent compensation package with fringe benefits that fit your employees' needs, contact PeopleKeep today! We’d love to help your staff stay financially, physically, and mentally well.
This article was originally published on January 26, 2022. It was last updated on August 25, 2023.
- https://www.cnbc.com/2023/02/01/why-2022-was-the-real-year-of-the-great-resignation.html#:~:text=messages%20to%20bosses.-,About%2050.5%20million%20people%20quit%20their%20jobs%20in%202022%2C,-beating%20out%20the
- https://www.irs.gov/retirement-plans/plan-sponsor/benefits-of-setting-up-a-retirement-plan#:~:text=and%20other%20incentives.-,Business%20benefits,-Employer%20contributions%20are
- https://www.irs.gov/retirement-plans/retirement-plans-startup-costs-tax-credit
- https://findstack.com/resources/remote-work-statistics/
