What are the most important benefits to employees?

In today's competitive labor market, employers are constantly looking for ways to attract and retain top talent. In many cases, offering an attractive salary alone isn't enough. PeopleKeep's 2024 Employee Benefits Survey found that 81% of employees said an employer’s benefits package is an important factor in whether or not they accept a job.

Your employee benefits package needs to be impressive to win over the right candidate. But with such a wide range of 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.

Takeaways from this blog post:

• Health benefits, dental insurance, and paid time off are the three most sought-after benefits by employees.
• Offering health benefits through HRAs instead of a group plan can be a cost-effective way for employers to provide healthcare coverage to their employees.
• Employees also highly value retirement benefits, such as 401(k) plans, as they ensure financial security in the future.

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.

Health benefits

Health coverage is one of the most important benefits employers can offer their workers. Findings from our survey show that 92% of employees rated health benefits as important.

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. KFF¹ found the average annual cost of employer-sponsored medical insurance premiums per employee in 2023 was $23,968 for family coverage and $8,435 for single coverage. Even if your small business or nonprofit can afford a group plan now, you’ll likely face steep annual rate increases and tough minimum participation requirements.

Many employers utilize health reimbursement arrangements (HRAs) instead of or in addition to a group plan. 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:

• The qualified small employer HRA (QSEHRA): The QSEHRA is a stand-alone benefit for small businesses with fewer than 50 full-time equivalent employees (FTEs) that don’t offer a group plan. You must offer a QSEHRA to all of your W-2 full-time employees. You can also choose to offer it to part-time employees. This allows you to reimburse your employees for their individual health insurance premiums and out-of-pocket expenses. Employees must have a plan that meets or exceeds minimum essential coverage (MEC) standards to participate.
• The 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 an existing group health insurance plan. An ICHRA offers employers the ability to differ allowances and benefit eligibility with 11 employee classes, such as full-time or part-time workers. Employees must have a qualifying individual health plan to participate.
• The 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.

Dental insurance

Dental insurance is the second most popular benefit, with 91% of employees ranking it as important in our survey. It's no surprise since dental care is costly. A study by Synchrony¹ found that 92% of Americans have considered delaying dental care due to the rising cost of treatment.

By offering your employees dental coverage, you can help them maintain a healthy smile and offer assistance with costly dental procedures. Instead of offering a group dental plan, you can offer an HRA as an affordable option. This is great for employers who want to offer medical and dental coverage to their employees without the extra cost or hassle.

Paid time off

If you want to entice job seekers, you'll catch their attention by offering ample paid time off (PTO). According to our survey, 90% of employees view PTO as a highly important company perk.

Adequate vacation time, sick leave, and personal days are essential for maintaining employee morale and preventing burnout. PTO provides a greater quality of life by allowing employees to rest and recharge without the fear of losing their income.

Retirement benefits

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 survey found that 89% of employees said retirement benefits are important to them. Yet, many employers are missing the mark here since only 61% of those surveyed offer it. Therefore, offering a retirement savings plan is another great way to improve employee loyalty, become an employer of choice, and gain a competitive edge.

Mental health and wellness benefits

Holistic health is also important to employees, with 80% rating mental health and/or wellness benefits as important.

With an HRA, you can reimburse employees for their mental health counseling, chiropractic care, and acupuncture. You can help your employees take care of their mental health by making time for fun at work and offering mental health training and resources.

Having access to an on-site gym or a discounted gym 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.

Flexible work schedules

With the rise of remote work, it's no surprise that many employees want more flexibility in their working arrangements. Survey results show that 57% of employees said it’s important to have access to remote work or a hybrid work environment.

Providing remote work options, flexible work hours, or four-day 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.

Life insurance

Employees also want financial security for their loved ones, with 77% of them rating life insurance as an important employee benefit. It helps ensure that your employee's family is taken care of financially in the event of their death. It can provide financial security for family members, cover funeral expenses, pay off debts, or any other financial needs that may arise after their passing.

This is another employee benefit that can set you apart from the competition since only 48% of employers surveyed currently offer it.

Education benefits

Education costs are a financial burden for many American workers. According to Education Data³, the average federal student loan debt balance is $37,088. This alone makes education benefits another appealing perk for employees. They offer financial support for personal growth and provide opportunities for skill acquisition.

Here are some examples of education benefits you can offer:

• Tuition assistance or reimbursement programs
• Student loan assistance programs
• In-house training programs
• Education conferences
• Employer-sponsored scholarships
• Assistance or reimbursement for professional licensing and exams
• Professional development courses

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.

Conclusion

While salary is important, you also want to build a comprehensive benefits 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 it their best while they're at work.

This post was originally published on October 9, 2015. It was last updated on June 4, 2024.

1. https://www.kff.org/report-section/ehbs-2023-summary-of-findings/
2. https://www.dentallifetimeofcare.com/#page=1
3. https://educationdata.org/student-loan-debt-statistics