With more attention being paid to employee wellness than ever, corporate wellbeing is becoming more and more important and companies are trying harder to improve their employee retention rates and stand out from other employers while also attracting new people to the workforce.
Implementing employee benefits and other fringe benefits that employees may be looking for allows companies to differentiate themselves from the competition.
What are Employee Benefits?
Employee benefits and fringe benefits are interchangeable phrases. Employee benefits are the schemes that all employees are entitled to when they join the company, such as insurance and healthcare, which can act as an incentive to join one company over another.
However, perks at work include more extravagant ‘prizes’ or rewards for employees that perform highly or particularly well. They act more as an incentive for employee retention and for productivity in the workplace.
A lot of employers forget that employees have options when it comes to their employment; employment is not just a one way street of employees searching for work, but companies need employees to function. They’ll always be needed somewhere, and if their current workplace isn’t giving them what they can get elsewhere, they won’t stay. With the way we work constantly changing, it’s increasingly important for employers to make sure they are giving their workers a reason to stay with them.
In fact, studies have shown that happier employees lead to a more productive workforce, higher employee retention rate and greater financial gains for the company. Because of this, it’s important that employers do everything in their power to be a desirable employer and give employees the benefits that they deserve.
Basic Employee Benefits
When it comes to the standard benefits employers can offer to their workers, there are four major types that should be included in a benefit scheme. Some are a mandatory requirement and some are expected, as opposed to employee perks which are optional and put in place by companies individually. For small businesses, these are the essential employee benefits to think about, as they are the most important and can provide the most help for employers. This is certainly not a comprehensive list, but it is also not a list of just requirements, and some employers may be able to provide all of them, while others will provide some.
The most important insurance that employers can offer is medical insurance. It can cover expenses such as hospital and doctors visits, prescriptions and certain necessary procedures. The level of coverage often varies depending on the employer, and sometimes employees will be expected to pay a portion of the expenses, while the employer can pay a part. Medical insurance in this manner is more common in the U.S, where healthcare is expensive, whereas, in the U.K, the healthcare system means that most things, such as doctors appointments, hospital procedures and ambulance services are free. However, certain employers do offer private healthcare on their schemes to UK employees which means they get fast-tracked appointments and non-NHS procedures and check-ups (such as dentists or vision appointments) for free.
Medical insurance can also often include a range of other things, listed below
- Dental insurance – exams, check-ups and x-rays
- Vision insurance – check-ups and sometimes helps with expenses for glasses and contact lenses, either fully or partially
- Cancer insurance – depending on the type of insurance, can pay a lump sum after a diagnosis or supplementary payments throughout the treatment procedure
- Hospital insurance – federal and state workers automatically get free hospital insurance whereas most other industries may require their employees to contribute monthly as part of their benefit scheme
- Accounts – employers can open accounts such as FSAs (Flexible spending accounts) or HSAs (Health savings accounts) in which employees can deposit tax-free money which gains interest, to be used on non-essential healthcare procedures. Employers themselves do not have to add to these accounts but are able to if they wish.
Another critical area of employee benefits is life insurance, which is usually configured with a contract through a separate insurance company. Upon the death of the employee, the insurance can pay a lump-sum payment, or ‘death benefit’ to beneficiaries of the deceased. It’s an important benefit for companies to offer, as it means that the family of the employee is protected and continues to benefit, especially if the deceased was the primary breadwinner of the family.
Accidental death and dismemberment insurance can be included under this category and disability insurance, but it is not to be confused with life insurance, or replace it. This insurance means that your family receives a payout upon death or serious injury from an accident.
This can help pay a portion of an employees income if they become unable to work due to illness or injury from an accident. There are both short and long-term coverages available to companies and it will depend on how comprehensive the cover is as to how long it can keep going for.
Accident insurance also comes under disability insurance, as it can help employees pay for costs incurred during recovery and being unable to work. It can include, but is not limited to; emergency treatment, hospital stays, medical exams and certain salary payments.
Retirement and Pension Plans
Last but not least is retirement schemes; designed to help employees get the most out of their pension when they leave the company. It’s recommended to utilise a partner who specialises in retirement plans such as a 401(k) as they can help advise on the best ways to implement the retirement scheme. Pension plans are beneficial to the employee and are a great way to show that you care about your workforce as an employer by helping them to set up a stable income after they are no longer employed.
Further Employee Benefits
Aside from these important four benefits that companies can employ to attract and retain employees to their company, there are a few that are less essential but can be a great way of beating the competition around them. These could be thought of more as employee perks as they are optional additions that companies may choose to include in their benefits scheme, however, they can be less exciting and more of a necessity than the perks we will look at further on. These further employee benefits are generally more common in larger companies as they have more money to spend on employee wellness, but they’re good examples of what works and what employees want to get out of their benefits schemes.
Some companies will help cover costs incurred from pet insurance, whether this be paying part of or comprehensively covering the monthly/yearly cost of the insurance itself, pay-outs when a pet is lost/stolen or injured, or help cover costs if the animal causes harm to another animal or person.
Employers can sometimes help with childcare costs, as these can be expensive. This can range from extended maternity and paternity leave and flexible holiday time to on-site childcare centres or discounted child-care during the day. This initiative is one of the most important at the moment, with workplace equality being prioritised, employers want to show that they are not discriminating, and are instead accommodating of all parents’ situations, even if they may be a disruption to their position.
There are two main elements of tuition reimbursement that employers can offer. Certain schemes and programs offer their employees the opportunity to have tuition paid for during their employment, in particular, if they are taking a Masters or PhD that will allow them to further their career within the company. This corporate benefit scheme is beneficial for both parties; the employer is gaining a more experienced employee that can use their skills to aid the company, and the worker is able to gain experience that they may otherwise not have afforded, that they can utilise to rise up through a company. This is common in the armed forces – military services will pay your tuition before you join, so that when you leave you are able to go into a related job and this decreases the amount of ex-army servicemen who become unemployed.
Another tuition reimbursement benefit scheme can include having tuition fees from previous university time paid off in part by the employer. In the U.K, 9% of university fees are taken off of a person’s wages when they are earning over a certain amount. In this case, some companies will choose to reimburse their employees this money so that they are not appearing to lose money from their wages as part of their employee benefits scheme. However, this is less common than having a company pay for an associated or related degree whilst working for them, as there are fewer benefits to the company themselves.
Employee Wellness Programs
Corporate wellness or employee wellness programs are also part of corporate benefit schemes and can range from extravagant initiatives of installing gyms or pools in office buildings, or as simple as extending lunch hours. They’re all about improving employee wellbeing and making the workplace a more enjoyable and relaxed environment by providing rest and relaxation for workers. Most companies with a workforce of over 100 in the U.S have implemented some sort of corporate wellness scheme and on average get a 200% return on their investment made.
‘Perks at work’, as they are sometimes more colloquially known, are slightly different from employee benefits. Although both are used to increase productivity and employee retention for companies and may have similar benefits. Perks at work often refer to the benefits that high-performing or tenured employees of the company receive as recognition for their work. Here are some examples below.
Company Paid Vacations
It’s especially common in sales departments for companies to offer paid vacation to their high performers, who have maximized sales and earned the most commission. Email marketing firm Litmus employs people from all over the world and takes some high performing employees on retreats such as skiing in Vermont, where employees from all countries get to meet and spend time together, instead of over the phone. Companies can offer a range of holidays and retreats; some will offer extravagant, all-inclusive holidays abroad, whereas others may go for more modest, shorter stays closer to home, but both go a long way in being a good incentive and encouraging employees to work to the best of their ability.
Flexible Holiday Time
Allowing employees to have a more flexible time-off schedule will help them to be more relaxed and get to do the things they want and need to like spending time with family or helping the community. The Body Shop even gives employees an extra three days off to volunteer, and this is becoming common in a number of companies. Rigid holiday schedules can lead to tiredness and a lack of productivity from employees, and therefore being more lenient helps to improve corporate wellbeing, which leads to a number of benefits for the worker and the company respectively. This can apply to all workers, however applying it in a way that allows the top employees to have the first pick on when they want to take time off can act as a further incentive to working hard and being productive.
It’s a simple initiative, but just recognising employees for their hard work can leave a lasting impression and show them that they are cared about and their contribution to the company is appreciated. Yes, bonuses are probably more appreciated, but not all businesses can afford to shell out cash for their high-flyers, and workers will generally appreciate something over nothing. Bonusly is an online tool for businesses that works like a company social media site; colleagues can post their achievements, team projects or even shout out to other employees on it, increasing recognition. To save money, even mentioning a few employees in a weekly email blast or newsletter sets an example and motivates other people to follow suit.
What Benefits do Employees Want?
Fortunately, more than half of employees say that they are happy with their current work perks in their jobs. However, when it comes to what people want to see implemented in their companies, it’s clear to see which initiatives would be the best employee benefit. In one survey conducted in the U.K, more than a quarter of respondents said they would like to have more paid leave opportunities from their employer and 37% would prefer extra paid leave over a pay rise. In the U.S this figure was 40%.
Especially for small businesses, it can be difficult to implement a strong employee benefit or perk scheme, as it requires cash that some might not have access to. The number one strategy is offering more paid leave, or more flexible time off, as this has proven to be popular with the majority of employees and is less money consuming than cash incentives.
Younger employees are also more likely to choose perks such as paid leave or housing benefits than perks such as health insurance, with just 10% of Gen Z respondents claiming they would like to have better health insurance from their company, compared to 26% of Baby boomers.
Laurie Mitchell, vice president of global wellbeing and health at Unum puts this down to the shift in the way we want to work these days. She says people are trying to find more of a work/life balance where there has been a lack of it in the past, we are prioritising our own health and wellbeing, and employers need to keep up with this change in attitude. The American workforce is starting to become dominated by millennials, who have a different mindset from previous generations and therefore are changing the way companies must think about their employee wellness and do their research in order to implement the best employee benefits scheme.
It is important to make sure that whatever wellness strategies and employee benefits you are implementing, is going to be utilised and appreciated by the workers themselves. Otherwise, the investment will not offer tangible returns and productivity will not increase.
In order to stand out from the sea of employers out there, you need a desirable employee benefits scheme and programs that genuinely increase their happiness and wellbeing.