Image

As the world of work evolves and employee needs shift, more people are asking: “What are employee benefits and how do they bring about positive business returns?” While each employer must consider the resources available to them, there’s no denying the value and impact of employee benefits for sustained employee satisfaction.

Suppose you scan the latest labor statistics, including reports from reputable publications like the Harvard Business Review. You’ll learn that employee benefits are a worthy investment for both employers and employees. From fringe benefits to wellness programs, there are various ways for companies to offer lucrative work-life support beyond salary. 

This article covers top insights about employee benefits solutions for a happier, healthier, more productive workforce.

Understanding Employee Benefits: Mandatory vs. Voluntary

So, what are employee benefits? These are supplementary or additional perks and incentives, or workplace coverage extended to eligible employees over and above their salaries. Employee benefits are crucial, especially in modern workplaces, for bolstering job security and employee retention. 

Employee benefits fall under two major types: mandatory and voluntary benefit coverage, with federal and state-specific considerations to adhere to as well. Let’s take a look at each type to better understand how they work and a few examples of each.

Mandatory Benefits

These are the core benefits that each employer has to put in place to ensure compliance and proper follow-through to cover a set scope of legal requirements. Mandatory benefits might look different from one company, field and state to the next, depending on the company size, the specifics of each industry and location. 

Some common core employee benefits include: 

• Unemployment insurance
• Medical cover and health benefits 
• Family obligation and special leave 
• Sick leave 
• Workers' compensation 

From Social Security considerations to paid time off, an employer wants to make sure their benefits packages incorporate fair coverage of the most basic and urgent worker needs. Think of core benefits as the workplace contributions that enable your employees to show up and execute their work consistently without hindrance or serious obstacles.

Voluntary Benefits

These types of benefits are part of the support network of each workplace structure and contribute significantly to company culture. Voluntary perks cover different kinds of fringe benefits or supplementary employee incentives to help employees strike a sustainable work-life balance. 

Some common fringe employee benefits include: 

• Life insurance 
• Dental and vision insurance 
• Accidental injury and disability coverage 
• Pet insurance 

In this allocation of employee benefits coverage, an employer can offer fringe perks that cater to the additional or secondary needs of employees. Popular examples include wellness programs, affiliate discounts and professional development opportunities, helping workers feel supported in the long term.

Tips for Striking a Good Balance Between Mandatory and Voluntary Employee Benefits

With each employee benefits package design, employers must get a good gauge of what employees actually need, balanced against the company’s goals and ROI projections. 

The following five tips make a business-defining difference in the consideration and final decision processes: 

• Tip #1: Align employee benefits with your organization’s long-term goals. 
• Tip #2: Assess company expenditure, ROI and any fundamental budget constraints.
• Tip #3: Consider what kind of coverage your unique demographic of employees needs and prefers. 
• Tip #4: Research industry trends and align your offerings with what the market reveals to be necessary in your field. 
• Tip #5: Roll out employee surveys and gather feedback at set intervals to learn how to incorporate employees’ changing needs. 

For example, a timely company review may uncover that there are overlooked health and retirement benefits gaps causing concern, uncertainty or anxiety among your company’s older employee group. As an employer, you’d need to respond to this discovery and reevaluate the effectiveness of your current employee benefits packages.

Key Employee Benefits Categories

We’ve shed light on what employee benefits are and the two main types: mandatory and voluntary. Next, details on the four categories that shape how employers design, implement, communicate and evaluate their employee benefits offerings: 

1. Health: Health insurance solutions are arguably the most essential employee benefits, as they safeguard employees’ physical, mental and psychological well-being. 
2. Retirement savings: Workers need a solid employee benefit plan for retirement to safeguard their livelihoods beyond their working years. Companies that completely neglect retirement considerations are often undesirable for well-qualified, highly skilled or top-talent prospects. 
3. Time off: A combination of paid and unpaid time off works in tandem with health coverage and various wellness program offers. The absence of time off is a deal-breaker for employees across different industries. 
4. Additional compensation: Employees may need additional workplace insurance (for mandatory out-of-office work) and other lifestyle benefits, providing a fair cushion in their workplace support network.

Cost and ROI Considerations: Crunching the Numbers

Like all major company decisions and long-term planning, employee benefits design, implementation and evaluation require careful considerations of the different but interconnected aspects of your business. The types of benefits packages that finally make it into employee offers depend on employers leveraging all leading insights and completing accurate ROI projections to assess feasibility.

While employers shouldn’t approach employee benefits with a bare minimum perspective, each business needs to be realistic about its available resources, possible limitations and future goals. Workers need competitive employee benefit packages that are comprehensive enough to provide an acceptable level of job security. 

From paid time off and special leave to health insurance and career advancement incentives, the balance has to be fair but sustainable for company growth and profitability. In our post-pandemic, pro-remote-first workplace reality, employers need to be strategic with their benefits package design and offers. 

While employers need to keep a close eye on what employees report as their financial, physical and mental health needs, employers also need to ensure that the employee benefits offered support company growth, worker productivity and claims savings. The company costing and ROI calculations that matter most are: 

• Company reputation 
• Employee demographics
• Employee satisfaction 
• Employee turnover 

For some companies and depending on the particulars of a specific industry or emerging trends, the data points for ROI calculations may need to look different to the short list above. The latest trends confirm that hard data is what drives accurate assessments and costs, leading to a few measurable benefit areas being cited as the most pivotal for positive business ROI. The non-negotiables are mental health, health insurance, retirement investing and skills investing (career advancement or study reimbursements) for employers who want to attract and retain top, loyal talent.

How Employee Benefits Ensure Top Recruitment and Retention

Employee benefits are a game-changer, shaping company culture and reputation, employee performance and the external messaging prospects pay attention to when deciding where to apply for viable work. While it’s true that the competition is stiff and modern workers are less inclined to commit to long-term careers where their needs aren’t met, it’s equally valid that employees will be loyal and more productive in workspaces where they feel well-looked-after and prioritized. 

That’s why the extent to which clever, meaningful employee benefits design and implementation can significantly affect recruitment and retention patterns in your company. Internally, employers can’t neglect ROI outcomes such as increased productivity, improved brand awareness and high-quality candidates. 

Externally, however, the most powerful employee benefits outcomes are centered on the following 10 advantages for workplaces. Employee benefits boost recruitment and retention by: 

• Attracting top talent 
• Boosting employee morale 
• Enhancing employee loyalty 
• Elevating employee satisfaction and customer service 
• Encouraging more employee engagement 
• Ensuring legal compliance 
• Improving worker productivity 
• Lowering employee turnover rates and company costs 
• Maximizing a company’s competitive edge 
• Strengthening company culture

Having the right employee benefits in place, supported by the right decision-making, should be part of a business’s forward-thinking strategies for growth. Workplace benefits communicate something that impressive profit margins and client databases simply cannot, that employers care about the people who drive business executions on the ground.

Best Employee Benefits: Practices for Effective Management and Communication

Knowing what kind of benefits are best to implement for both employee and employer needs is just one aspect of the implementation process – management and communication are another. These seven guidelines will help employers ensure they are leading with competitive benefits and effective management: 

• Guideline#1: Develop and include benefit strategies that cater to diverse workforces. This means taking into account the varied needs of different racial, age and gender groups. 
• Guideline #2: Leverage technology and digital tools to streamline benefit administration. Leverage employee benefits automation where appropriate, and explore the power of integrated systems for all HR-related operations. 
• Guideline #3: Respond appropriately to emerging trends and develop unique benefits, answering the needs of your unique workforce. For example, employees might value mental health support, dependent caretaking, further qualification and certification, commuter benefits, flexible work hours and personal days. If those are important to your employees, then they are considerations worth making in the internal benefits negotiation and design stages. 
• Guideline #4: For small, start-up or growing businesses with limited budgets, employers must strategize differently or creatively but fairly to account for the financial constraints that may clash with certain employee benefits coverage in the first few years. 
• Guideline #5: Ensure full compliance to meet the legal requirements in your industry, state and geographical location. 
• Guideline #6: Include benefits that will attract and keep the most talented employees. For instance, modern workers appreciate employee discounts or lifestyle benefits over and above vacation days, paid sick leave, civic duty and volunteer work. 
• Guideline #7: Perform extensive industry research to understand what the employee benefit deal-makers and breakers are. Then, consider benefits administration to ease the requirements of effective employee benefits management.

Frequently Asked Questions: Implementing Employee Benefits

Employee benefits are no small matter. Naturally, employers, stakeholders, partners, investors and employees alike might have a few questions about effective design and roll-out. Here are five of the most frequently asked employee benefits questions. 

Q1: What Best Defines Employee Benefits? 

Employee benefits can be defined as the non-wage-related offers, perks and incentives that add value to an employee’s work agreement. Comprehensive benefits packages include mandatory and voluntary perks, and contribute greatly to workplace culture, employee satisfaction and retention. 

Q2: Why Are Employee Benefits Important? 

For each employer wanting a competitive advantage, employee benefits are fundamental dealmakers for attracting top talent and retaining loyal, committed workers. Employers need to provide a fair level of job security while employees seek additional compensation. Employee benefits are the meeting ground and most effective mechanism for companies and workers to achieve both feats. 

Q3: What Are the Top Five Employee Benefits? 

The most competitive employee benefits package will offer paid leave, health insurance, retirement contributions, mental health support and flexible work schedules. These are the five perks and incentives that modern employees identify as the most imperative. 

Q4: What Benefits Do Employees Value Most? 

Employees care about longevity and job satisfaction, and so they value packages and offers geared toward physical health, financial and mental wellness benefits. These support and encourage a healthy work-life balance. 

Q5: Do Employee Benefits Include Salary? 

Employee benefits do not include salary. An employer should approach benefits package design from the perspective of an employee benefits program that supplements and supports each worker with common needs and assurances. 

Reshape Your Workforce with Effective Employee Benefits 

More so now than ever before, employee benefits are incredibly essential for workforce satisfaction, employee loyalty and retaining talented employees. From Social Security contributions and paid time off to suitable wellness programs, a progressive employer will aim to implement an employee benefits package that fulfills workers’ needs. The most valuable employee benefits boost morale, define company culture and lead to higher rates of job satisfaction. 

Aptia is proud to offer streamlined and comprehensive employee benefits administration, insights and services at an industry expert level. We help both employees and employers with effective employee benefits advisory and management. Contact us today to learn more about the best administration solutions for your business's employee perks and packages.