When employers talk about their “compensation packages,” they don’t mean just salary. In addition to employees’ pay, these packages typically include a number of other perks, like health insurance, retirement plans and paid time off (PTO). If you want to build a truly desirable benefits package to keep your employees happy and attract top talent, this guide is for you.
An employee benefits package is a set of perks given to employees in addition to their salary or wages. Often called “nonwage benefits,” they encompass many tools employees can use to take care of themselves and their families, establish a healthy work-life balance, save money and more.
Some benefits are mandated by law in certain instances, such as health insurance, while others, such as PTO, are offered to attract top-level employees to work for a particular company.
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A truly impactful employee benefits program goes well beyond medical coverage, said Alex Shubat, CEO and co-founder of work-life-balance platform Espresa.
“I believe that benefits are all about employee recruitment and retention, which comes from people feeling valued,” Shubat said. “They want to know that their employers care about their well-being and respect their time.” [See related article: Quitting Your Day Job? The Basics on Benefits Coverage for Entrepreneurs]
Here are some employee benefits that PEOs and insurance brokers can help you offer, as well as a few perks that many employers add as they expand their benefits packages.
Of course, these are just the basics. To stand out and make your company more attractive to employees, you’ll need to go above and beyond, within your small business budget.
“All companies wish they could spend more on benefits, but it is a balancing act,” said Jeff Yaniga, former chief channel officer of Maestro Health. “It’s been hard for smaller employers to offer choice. Voluntary benefits continue to improve and evolve. Employers must budget benefits with the same rigor by which they budget payroll, innovation, and building great products and services.”
Benefits don’t have to eat up your whole budget, though. Small perks, like free food or discounted services, can go a long way in keeping employees happy.
“Something as simple as free drinks in the kitchen may only cost a few hundred dollars a year, but it’s amazing how much the ‘little things’ affect morale and performance,” Shubat said. For example, a soda machine or on-site dry cleaning “isn’t going to break the bank, and the value they generate in terms of retention is unbelievable,” he said.
Some wellness-related perks might include gym memberships or discounts, smoking cessation programs, subsidized health food markets and child care benefits. Other low-cost perks include employee-recognition programs (with small rewards or prizes); points-based programs that let employees earn discounts, cash and gift cards; and drawings or raffles.
Employee benefits packages can include a wide range of programs and perks, from large benefits, such as medical and dental insurance, to small perks, like free lunch. What you decide to offer depends on your company’s budget and overall goals.
You know that attractive benefits packages help employees, but you should also understand the advantages for employers. Here are a few reasons you should offer a competitive benefits package:
Our sources offered the following advice for building an employee benefits package that works for your company.
Employees may seek different offerings in their benefits packages. For example, younger employees may want help saving money to buy a house, while older workers may be more focused on saving money for their retirement. Allowing employees to personalize their package to meet their own goals is a big part of increasing satisfaction with your benefits plan.
High-deductible health plans can be supplemented with voluntary benefits, such as low-cost loans, Yaniga said. “Empowering employers with the best benefits options will put them on a path toward higher retention rates, greater employee engagement and a more thriving workplace,” he said.
Other popular voluntary benefits include wellness plans, telemedicine, pet insurance and financial advisory tools.
Finding an intuitive online portal that’s easy for your employees to access and navigate is important to help them understand what they can do with their benefits package. If it’s easy to enroll and make changes down the line, employees will feel in control of their benefits.
“Most traditional benefits, like medical and retirement plans, can be viewed and managed through online portals,” Shubat said. “The next wave is making all benefits and services available through digital platforms. Most companies don’t have those tools in place right now, but it’s becoming more and more common every day.”
Technology can help employers, too. By using the analytics provided by these tools, you can gain a better understanding of your employees’ needs and what’s working.
Yaniga emphasized the importance of knowing your employees and finding out what benefits they really want.
“The more we understand about the benefit priorities of our employees, the more we can meet them at their priorities,” Yaniga said. “Best-in-class companies build a great culture by applying all they know about their employees’ priorities to their benefit structures.”
Benefits should be flexible, easy to access and desirable for your employees.
If you’re looking for HR software that can help you devise and manage a great employee benefits package, consider these platforms:
These are just a few great options. See our picks for the best HR software to learn more about our favorite solutions.
While a good wage or salary is important for any employee who’s considering whether to accept a job or stay with a company, the strength of the employer’s benefits package can often play a large role in their decision as well. By bundling the retirement, healthcare, time-off and other benefits your employees really want, you can help improve employee retention and enhance your recruitment efforts. Follow the advice above to start building a benefits plan that truly makes a difference for your employees and your business.
Nicole Fallon-Peek and Tejas Vemparala contributed to this article. Source interviews were conducted for a previous version of this article.