In today's competitive job market, employers are constantly looking for ways to attract and retain top talent. In many cases, offering an attractive salary isn't enough. Your employee benefits package needs to be just as impressive to win over the right candidate. But with so many benefit options available, where do you start?
In this article, we'll explore the key benefits employees value most and explain how you can offer them at your organization.
What are the top benefits employees want?
Employee benefits have emerged as one of the most important aspects of job satisfaction. While they may vary from company to company, certain types of employee benefits consistently rank higher than others in their impact on well-being and loyalty.
Let's go over some of the most sought-after benefits for employees below.
According to the Kaiser Family Foundation1 (KFF), health spending per person in the U.S. was nearly $13,000 in 2021. This amount is more than any other high-income nation. Therefore, it's no surprise that health coverage is one of the most important benefits employers can offer their workers. Findings from our 2022 Employee Benefits Survey Report show 87% of employees value health benefits, such as health insurance.
Health insurance helps protect employees from unexpected medical expenses and allows them to receive the quality medical care they need. When employers choose to offer this popular benefit, it shows their dedication to the well-being of their team.
Unfortunately, traditional group health insurance is expensive. KFF2 found the average annual cost of employer-sponsored medical insurance premiums per employee in 2022 was $22,463 for family coverage and $7,911 for single coverage.
Many employers utilize health reimbursement arrangements (HRAs). They're a cost-effective way to offer health benefits. HRAs allow employers to reimburse employees, tax-free, for their healthcare expenses. Depending on the type of HRA you offer, qualifying out-of-pocket expenses can include medical care services and premiums, premiums for dental and vision insurance, and other related costs.
Here are the types of HRAs you can administer with PeopleKeep:
- Qualified small employer HRA (QSEHRA): The QSEHRA is a stand-alone health benefit for small businesses with fewer than 50 full-time equivalent (FTE) employees. It applies to all W-2 employees regardless of their insurance status.
- Individual coverage HRA (ICHRA): The ICHRA works for businesses of all sizes. Employers can provide an ICHRA as a stand-alone benefit or as an alternative for employees who are ineligible for the existing group health insurance plan. An ICHRA allows employees to differ eligibility by employee classes and has no maximum contribution limits.
- Group coverage HRA (GCHRA): The GCHRA, also known as an integrated HRA, is beneficial for employers who want to boost their existing group health insurance policy to better recruit and retain top talent. It serves as additional coverage for out-of-pocket expenses that may not be fully covered by the group health insurance plan, such as deductibles.
Another option is a health stipend. Employees receive a fixed amount of money to spend on their individual health plans and other medical expenses. Stipends are flexible and cost-effective, but they're taxable. They count as part of an employee's taxable income.
Having access to an on-site gym or a discounted fitness membership is another major employee perk. Not only does it provide an opportunity for exercise and stress relief, but it also helps promote a healthier lifestyle for employees by providing them with the resources they need to stay fit and healthy. Wellness programs can also reduce absenteeism.
With a wellness stipend, you can reimburse your employees for gym memberships, fitness classes, home exercise equipment, and wearable fitness trackers. A wellness stipend can also cover mental health counseling and other out-of-pocket wellness expenses to support your employee's overall well-being.
Flexible work schedules
Providing remote working options, flexible schedules, or compressed workweeks can have a positive impact on employee satisfaction by promoting work-life balance. This allows employees to effectively manage their professional and personal lives while meeting their job requirements.
If you employ remote workers, you should support their success. With a remote work stipend, your employees can buy what they need to create or update their home offices. Remote workers can also use that money to cover the cost of working at a coworking space.
Employer-sponsored retirement plans, such as 401(k)s or pension plans, allow employees to save for their future and ensure their financial security after they stop working. Our report found that 87% of employees value retirement benefits or retirement accounts. Many employers are missing the mark here since only 54% of those surveyed offer it. Therefore, offering a retirement savings plan is another great way to become an employer of choice.
Paid time off (PTO)
Adequate vacation time, sick leave, and personal days are essential for maintaining happy employees and preventing burnout. PTO provides a greater quality of life by allowing employees to rest and recharge without the fear of losing their income.
Employees want more than just financial rewards. They want to feel valued and fulfilled in their roles. Our report found that 61% of employees value professional development benefits. However, only 40% of employers offer them.
Providing opportunities for employees to enhance their skills, participate in training programs or workshops, or pursue higher education can boost job satisfaction and improve employee retention. It also demonstrates a commitment to employee growth and development.
A professional development stipend is an excellent way to support your employees’ continued growth. You can reimburse your employees for conferences, career coaching, and online learning platforms like Coursera or Skillshare.
Education benefits are another appealing perk. They offer support for personal growth and provide opportunities for skill acquisition.
Many organizations offer tuition reimbursement programs. According to Statista3, 56% of employers provide assistance for undergraduate or graduate tuition, with 8% offering student loan repayment assistance.
While salary is important, you also want to add a mix of benefits to your compensation package if you want to attract and retain talented employees. The right employee benefits can increase employee satisfaction and productivity while reducing employee turnover. By understanding what benefits are most important to your employees, you can motivate them to give their best while they're at work.
With WorkPerks by PeopleKeep, you can easily create custom stipends related to employee health, wellness, professional development, education, and more. Our HRA administration software also makes it simple to set up and manage your health benefit in minutes each month.
This post was originally published on October 9, 2015. It was last updated on July 14, 2023.