Exploring the Types of Employee Benefits for Top Talent

Employees, especially top talent, value quality benefits. Competitive salary packages are an essential component in securing leading candidates, but they might not be enough to keep those talented individuals happy. Traditional workplace perks are good, but unique and innovative benefits can significantly add to the appeal of a job.

When asked, 80% of employees said they would prefer additional benefits over a pay increase, according to a report by Glassdoor.

What types of benefits are most attractive to top candidates? Competitive compensation packages often include many types of employee benefits such as healthcare, retirement and flexible and health savings accounts.

According to a 2024 New York Life study, the top five benefits employees are most interested in receiving are:

• Employer match on a 401(k) or other retirement savings plan
• Supplemental health insurance coverage
• Flexible work arrangements
• Mental health resources and access to support services
• Long-term care insurance

In this guide, we will examine the many types of employee benefits and why providing a diverse array of benefits is essential to a thriving business.

Why Benefits Are Important

Employee benefits play a crucial role in the workplace, offering significant advantages to both employees and employers. For employees, benefits provide essential support and security beyond their regular salary. For businesses, employee perks can benefit the company's bottom line as well as enhance employee recruitment and retention.

Healthy workforce

One of the primary reasons employee benefits are so important is that they contribute to maintaining a healthy workforce. Health insurance, for example, allows employees to access necessary medical care and help maintain a healthy lifestyle.

This not only improves their overall well-being but also helps to reduce absenteeism and increase productivity in the workplace. Additionally, benefits like paid time off and flexible work arrangements can support employees in achieving a better work-life balance, which may help reduce stress and enhance job satisfaction.

Recruiting and retention

Offering a comprehensive benefits package is crucial for attracting and retaining top talent. In today's competitive job market, potential candidates often consider the quality of workplace benefits when evaluating job offers.

A robust benefits program can set a company apart from its competitors and demonstrate that it values its employees. This, in turn, can lead to increased employee loyalty and reduced turnover, helping to save the company significant costs associated with recruiting and training new staff.

Tangible impact on retention rates

A report by the CIPD, an HR professionals' association, cites a direct link between benefits and retention: 75% of employees are more likely to stay with their employer because of their benefits package and 43% of employees said their current benefits package has kept them in their current role.

Boost productivity and performance

Employee benefits can have a direct impact on a company's bottom line. When employees feel valued and supported through a strong benefits package, they tend to be more engaged and productive. This increased productivity can lead to improved business performance and profitability.

Great benefits also help keep workers healthy. Offering benefits that promote employee health and well-being can help lead to reduced healthcare costs for the organization in the long run.

Employee benefits, particularly employee recognition and performance incentives, play a crucial role in driving employee engagement. When organizations implement well-designed recognition programs and performance-based incentives, they create a work environment that fosters motivation and productivity.

Studies have shown that employees who receive regular recognition are 2.7 times more likely to be highly engaged, according to a report by Quantum Workplace, an HR tech company. Incentive programs can increase employee performance by up to 44%, according to the same report.

Company loyalty

These benefits not only boost individual engagement but also improve overall productivity and loyalty to the company. In fact, organizations with recognition programs have 31% less voluntary turnover than those without such programs, according to the Quantum Workplace report.

By acknowledging employees' achievements and offering tangible rewards for outstanding performance, companies can create a culture of appreciation that enhances job satisfaction, increases retention rates, and ultimately contributes to the organization's success.

Compliance

Some benefits are required by federal or state law. It’s important for businesses to provide these benefits both because they have great value for employees and are expected, and because the business may face penalties for non-compliance. We'll cover those later in the article.

First, though, we'll review the different types of employee benefits. Many employers regularly assess benefit trends and the benefits offered by the competition to attract the best talent in the market and retain valuable employees. You can use this comprehensive list to help benchmark your own benefit plans.

Health and Wellness Benefits

One of the most important benefits in the U.S. by far is health insurance. And for companies with 50 or more full-time employees, providing health insurance is required by the federal Affordable Care Act. This usually includes visits to primary care physicians, certain specialists and any type of emergency care.

Medical leave, including maternal/parental leave, is covered for eligible employees by the Family and Medical Leave Act (FMLA). While unpaid, this type of leave can last up to 12 weeks and provide job and benefits protection.

Businesses can offer additional coverage options including vision, dental, prescription and pharmacy, life insurance, short-term and long-term disability options, and flexible spending accounts. Although smaller companies (less than 50 employees) aren’t mandated to provide their teams with these options, they often provide them. HR outsourcing is a common way for small businesses to provide employee benefits that can compete with larger rivals.

Telemedicine

Many insurance providers now offer telehealth or telemedicine visits as a part of their benefits. These are phone or video calls with a doctor or other medical professional to quickly diagnose things like the common cold or flu and prescribe necessary medication.

Telehealth is especially useful for mental health services like counseling, therapy, and psychiatry.

Parental leave

Maternity leave and paternity leave are important benefits for new parents who need time to recover from birth and bond with their new baby. While not required to be paid by U.S. law, paid maternity and parental leave for 12-20 weeks would be an attractive benefit for candidates.

Wellness programs

Employee wellness programs and incentives for maintaining a healthy work-life balance are becoming increasingly more popular. These can include gym memberships and discounted annual fees, rewards for attending fitness classes, and more.

Mental health resources and support services

A benefit popularized after 2020, mental health resources and support services is a great perk for employees. Common areas of support include providing resources and educational programs, stress management support, and access to therapists and counselors.

Financial Incentives

Another category of benefits that helps make employees more financially secure includes providing incentives for performance, which can offer more peace of mind.

401(k) with options for employer matching

Retirement plans like 401(k) plans are considered standard benefits. To go above and beyond, a company might want to consider offering generous 401(k) matching. For example, dollar-for-dollar with a limit of 5% or so matched per paycheck.

Stock options

Stock options can be an attractive benefit, perhaps with company-matched purchases or as year-end bonuses. Profit sharing plans are another option.

Student loan assistance

The burden of student loan debt can be crushing, and assistance in this area can make a great impression on recruits. Many companies help employees pay for education, which adds to their knowledge base, value to the company and promotability. Tuition reimbursement can be an important incentive for employees who need degrees or certifications to advance their careers. Another related option is offering college assistance for employees' children through scholarship funds or a 529 plan.

Financial planning

Financial planning services help employees in wealth management and promote long-term financial planning. By helping employees forge a stable financial life, this type of benefit can help relieve stress, improve overall wellness and keep employees more engaged.

Bonuses

Annual bonuses are a popular way to show appreciation for your employees and their hard work. Performance bonuses are a great motivator as well.

Referral bonuses not only transform employees into recruiters, but also prove your trust in their recommendations. The bonus might be paid at the time of hire, or after a waiting period. For example, you might offer a $1,000 bonus — but only after 3 months of successful employment. This perk can improve both recruitment and retention.

Dependent day care reimbursement accounts

Offering childcare assistance for employees is a great way to support parents in your company. With the rising cost of childcare, providing reimbursement helps ease parents’ financial burden and makes it easier to manage the costs of caring for their children.

Dependent day care flexible spending accounts (FSAs) allow employees to pay for qualified, employment-related, out-of-pocket day care expenses on a pre-tax basis.

Health savings and flexible spending accounts

Health savings accounts (HSAs) and health care flexible spending accounts (FSAs) enable employees to use pre-tax money to cover a wide range of health-related expenses.

This can save them a significant amount of money and can lead to a healthier, happier workforce.

Workplace related benefits

Many employers confer benefits to make the workplace more accommodating. It's important to let your workforce know how much you value them. A savvy business will not only offer great perks, but also use employee benefits communication to make sure people realize everything that's available to them.

Paid time off, including vacation time, holidays

While PTO is a common workplace benefit, unlimited paid time off is becoming increasingly popular and desirable for employees. Offering paid holidays and vacation time separate from sick leave is another expected workplace perk proven to enhance employee morale.

Skills training and continuing education

Skills training and continuing education programs allow employees to stay current with industry trends and acquire new competencies, enhancing their job performance and adaptability in a rapidly changing work environment.

Continuing education programs enable employees to advance their knowledge and qualifications while helping to reduce the financial burden of academic pursuits. This benefit not only attracts ambitious professionals but can also foster loyalty among existing staff.

Career development initiatives, such as mentorship programs, leadership training, and clear advancement pathways, show employees that the company is invested in their future.

Commuter expenses

Are your employees required to commute to the office? Providing gas stipends, access to a company car, fare reimbursements and other benefits for commuters are great incentives to encourage employees to work from the office.

Work-from-home benefits

Corporate benefits like a home office stipend allows employees to improve the quality of their remote workplace. For example, a company may allow $500 a year for home office upgrades such as monitors, PCs, chairs, internet service, etc. Employees may also be allowed to spend the stipend as they see fit.

For many employees, the regular use of their personal cell phone (or home landline) for business purposes is the norm. If so, covering the costs with a monthly allowance of $50 or so is a generous employee perk.

Are your remote employees paying for their own internet service? Cover that cost with an amount appropriate to your local area internet cost. This can easily be bundled with the monthly phone allowance.

Flexible work arrangements

Flexible work arrangements have emerged as a highly valued employee benefit, offering numerous advantages for both employees and employers. This type of scheduling allows employees to tailor their work hours to better fit their personal lives, leading to a better work-life balance and increased job satisfaction.

Employees with flexible schedules often report lower stress levels, improved mental health, and higher productivity due to better focus and energy management throughout the day.

Sabbaticals

For long-term employees, show your appreciation by offering the chance for a sabbatical. This could be extended paid time off, or a longer unpaid leave — though entirely optional. Employees might enjoy a world tour, a long stay at a resort or spa, or just getting overdue tasks done at home. Sabbaticals often are used for productive purposes, too, such as field research and writing papers.

Relocation assistance

Asking employees to relocate to another location for their position? Offering relocation assistance is a common benefit that can help a talented recruit decide in your favor in a tight labor market. This could look like a stipend or reimbursement for any expense incurred while moving for the job, such as a rental truck or movers.

Fringe Benefits

Employee fringe benefits are supplemental benefits offered to employees in addition to their salary or compensation. They can be offered to all employees or at various levels of management or to individuals as rewards for a job well done. For compliance and consistency, it's important to spell out the criteria for fringe benefits in your employee handbook. There are several distinctive levels of fringe benefits, each of which can be used for motivation or employee retention.

A number of the benefits we've already covered fall under the broad umbrella of fringe benefits, including health insurance, retirement plans, flexible work arrangements, paid time off, wellness programs and other forms of assistance. By offering a comprehensive package of fringe benefits, a company demonstrates its commitment to the overall welfare of its employees, showing that they are valued and cared for.

A company can be creative with its fringe benefits and use them to reinforce their core values and reflect what makes them unique. For example, Ben & Jerry’s offers each employee three free ice cream pints a day, while Airbnb gives employees a travel and experience credits. To better understand your options, consider some of the diverse types of employee fringe benefits and what they involve.

Employee assistance program (EAP)

Employee assistance programs (EAPs) are comprehensive support systems designed to help employees manage personal and work-related challenges. These programs offer a wide range of services, including:

• Mental health counseling
• Substance abuse support
• Financial wellness support
• Work-life balance resources
• Crisis intervention

EAPs are beneficial because they help employees manage their stress, potentially reducing absenteeism and improving productivity.

They also provide confidential support for personal issues, allowing employees to address problems before they impact work performance. This support is a cost-effective resource as well for employees, often available at no additional cost to them.

EAPs can lead to decreased accidents and fewer workers' compensation claims as well by promoting overall employee wellness.

Pet insurance

As pets are becoming more increasingly important in people's lives, pet insurance is emerging as a valuable fringe benefit. This coverage helps employees manage the costs associated with pet healthcare.

By demonstrating care for employees' personal lives and acknowledging the importance of pets, you build trust and create a positive workplace culture.

Offering pet insurance can help employees focus more at work by easing the financial stress related to pet healthcare. This benefit encourages pet ownership, which can have positive effects on employee well-being.

Employee discounts and perks

Employee discount programs provide access to various discounts on products and services. These can include retail vouchers, partner concessions, and everyday items.

Volunteer time off

Show your support for local charitable causes. Offer a paid time off, perhaps once a quarter, so employees can volunteer for local charities. Investing in the social good supports your employees' interests while proving your commitment to the charities they support.

Legal assistance

Legal assistance programs offer employees access to legal advice and services at reduced costs or no additional charge.

Mandatory Benefits

Federal and state laws require certain benefits for full-time employees. These include Social Security, Medicare, healthcare benefits, workers’ compensation, unemployment insurance, unpaid leave and health insurance coverage.

Some employee benefits, such as those provided for in the Affordable Care Act (ACA) and the Family and Medical Leave Act (FMLA), are mandatory only for employers with 50 or more full-time employees.

Some states have additional benefit requirements that go beyond the federal requirements. These state statutory benefits include:

• Unemployment insurance – required in every state, each with its own UI program requirements
• Retirement benefits – required in some states
• Workers’ compensation insurance – required in every state except Texas
• Disability insurance – required in some states
• Sick leave and other time off – required in some states

Offer the Benefits Employees Value

Job benefits are a crucial part of talent recruitment and retention, as well as beneficial to the company's bottom line. But how can a small business offer the benefits that qualified employees value? How do they manage benefits administration?

TriNet's PEO services enable small to medium sized businesses to access big-company benefits. Plus, we help handle the complexities of benefits administration for TriNet-sponsored plans.

We also help you navigate compliance with those state and federal rules and requirements. TriNet’s full-service offering, including access to benefits and retirement plans, provides best practice guidance and compliance support. We’re with you at each step.

With TriNet, you can go beyond access to comprehensive health and retirement coverage to include access to popular fringe benefits such as commuter benefits, pet insurance and more. Contact us today to learn more. 

© 2024 TriNet Group, Inc.  All rights reserved.  This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance. TriNet is the single-employer sponsor of all its benefit plans, which does not include Enrich products and voluntary benefits that are not ERISA-covered group health insurance plans and enrollment is voluntary. Official plan documents always control and TriNet reserves the right to amend the benefit plans or change the offerings and deadlines.

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