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How to Build a Great Employee Benefits Package

Andreas Rivera
Andreas Rivera

Developing an enticing benefits package is a key aspect of attracting and retaining top employees.

  • Employee benefits packages offer health insurance, paid time off and other nonwage benefits.
  • Employee benefit plans are important for attracting and retaining top talent.
  • The benefits you offer will depend on your company’s size, budget and goals.
  • This article is for small business owners and human resources professionals who are interested in starting or expanding their current employee benefits packages.

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).

A truly impactful employee benefits program goes well beyond medical coverage, said Alex Shubat, CEO of work-life balance platform Espresa; your benefits package is a tool for attracting and retaining employees.

“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.”

If you’re looking to build a comprehensive, cost-effective and engaging benefits program for your small business, here’s what you need to know. [See related article: Quitting Your Day Job? The Basics on Benefits Coverage for Entrepreneurs]

Editor’s note: Looking to outsource your human resources department for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

What is an employee benefits package?

An employee benefits package is a set of perks and special offers given to company employees. These items, often called “nonwage benefits,” 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.

Key Takeaway

An employee benefits package encompasses all of the perks and offers you provide your employees for use both inside and outside the office. Learn more about how to choose a PEO partner if you’re interested in outsourcing benefits management.

[Outsourcing your benefits Administration? Read Related: The Best PEO Services]

What to include in your employee benefits package

Here are some employee benefits that PEOs and Insurance brokers can help you offer, as well as a few perks that many employers are adding as they expand their benefits packages:

  • Health insurance, including the following:
    • Medical: Health benefits are among the leading reasons an employee chooses to work at a company. Offer plans or options that help employees and their families access the ongoing and preventive care they need to lead healthy lives.
    • Dental: Annual cleanings, cavity fillings and emergency dental work can be among the most expensive healthcare costs. A good plan helps employees and their families access preventive and vital care at an affordable price.
    • Vision: For the millions of people who wear glasses, vision insurance helps them access discounted or free corrective eyewear. This can lift a significant financial burden off your employees’ shoulders.
  • Flexible spending accounts (FSAs): This health insurance benefit helps employees save pretax dollars for medical expenses.
  • College (529) savings plans: Help your employees set aside funds for their children’s education with a 529 savings option.
  • Retirement savings plans, such as a 401(k): Offer employees an easy way to save for retirement by automatically depositing money into a retirement account each pay period. Your company may also elect to match contributions up to a certain amount or after a certain number of years of service to the company.
  • Additional insurance (e.g., life and disability): Life and disability insurance can help your employees and their families if something catastrophic occurs.
  • Time off for vacation, sick days and personal days: Offering ample time off for employees to take care of themselves and loved ones is an excellent way to demonstrate your commitment to their well-being and work-life balance.
  • A pretax commuter benefits program: This is especially helpful if your company is in a major city. For example, New York City requires all employers with 20 or more full-time, nonunion employees to offer this type of program. Even if you’re not required to offer it, employees will appreciate knowing you’re dedicated to making the daily grind a little easier.
  • Flexible and/or remote work options: During the COVID-19 pandemic, many businesses rapidly switched to a work-from-home model for the first time. Offering this option also helps employees save on commuting costs and achieve a better work-life balance.
  • Stock options: Common in startups, stock options are equity compensation given to employees in exchange for their years of service or for getting in with a company on the ground level. This benefit allows employees to purchase stock at a preferred price for a predefined time period if the company were to go public.

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, he added, 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.”

Some wellness-related perks might include gym memberships or discounts, smoking cessation programs, subsidized health food markets and childcare benefits.

Other low-cost perks include employee-recognition programs (with small rewards or prizes), points-based programs that let employees earn discounts or cash, 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.

Why offering competitive benefits is good for employers

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:

  • It attracts top talent. The best employees in your field know that they are in demand, and they have choices for where to work. An appealing employee benefits package can help attract and retain these employees.
  • It keeps employees healthy. Without health insurance, the flexibility to work from home or ample time off, employees may experience burnout. That hurts your bottom line in the long run, as employees are less productive when they’re overworked than when they are well rested.
  • It’s good for public relations: More customers want to conduct business with companies that have strong values, including good treatment of employees.

[Read Related: What’s the Difference Between a PEO and an Employer of Record?]

Tips for creating an employee benefits package

Our sources offered the following advice for building an employee benefits package that works for your company:

Offer choices.

Not every benefits package is a one-size-fits-all solution. 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.

Use technology to your advantage.

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 you make it 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.

Ask employees what they want.

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.”

Did You Know?

Benefits should be flexible, easy to access and desirable for your employees.

Additional reporting by Nicole Fallon-Peek. Source interviews were conducted for a previous version of this article.

Image Credit: fizkes / Getty Images
Andreas Rivera
Andreas Rivera
Staff Writer
Andreas Rivera graduated from the University of Utah with a B.A. in Mass Communication and is now a staff writer for and Business News Daily. His background in journalism brings a critical eye to his reviews and features, helping business leaders make the best decisions for their companies.