Category: Retirement Products

The Importance of Employee Benefits to Stay Competitive

By Julie Scott, PayTech

Did you know that many American workers feel that employee benefits are more important than a higher salary? In a 2018 study, potential candidates cared about healthcare, vacation time and 401k opportunities alongside their compensation when evaluating employers. Company perks such as gym memberships, flexible schedules, and free snacks are also important to modern employees. Companies who understand the importance of employee benefits and perks are not only able to recruit top candidates, but they are also profiting from the improved performance from their current employees. 

What is the purpose of employee benefits?

The purpose of employee benefits is really to improve an employee’s life outside of work. But, what companies are beginning to understand is that an employee’s happiness outside the office has a direct correlation to their performance at work. By removing some stress and offering solutions to employees’ pain points, companies benefit from more committed and focused employees. This also helps foster a long-term relationship with employees who feel that their company is taking care of them, and in return, employees put in their best effort to take care of their company.

Why are employee benefits important?

Employee benefits are an important part of any compensation package. Benefits help an employee feel taken care of in multiple aspects of their lives by helping them manage the cost of healthcare, plan for their financial future, and enjoy an overall higher quality of life. When your employees feel secure and taken care of, they perform better and stay at a company longer. This creates a more positive work environment, helping companies better achieve their goals. In short, the importance of employee benefits is that they keep your employees happy and make your company more successful.

A good benefits package can help recruit and retain talented employees.

When people are looking for a new role, they consider a lot of factors including the job description, the company culture, the pay, and of course, the employee benefits. Companies can be competitive in many ways, but oftentimes it comes down to one or two key differences that end up making the decision for top talent. Many companies have similar jobs with competitive pay, so the opportunity to differentiate your position lies in your company culture and your employee benefits. 

A good benefits package can also help you retain your current employees. Even if your competitors try to offer one of your team members a higher salary, it would be hard for them to compete with ample vacation time and a comprehensive healthcare plan. Ensuring your employees’ happiness is one of the best things you can do to help keep your team motivated and loyal.

Benefits can help employees focus more on work while they are at work.

The reality is each one of us has a life outside of the office. While we do our best to minimize distractions, sometimes we can’t help letting our minds drift to concerns with our family’s well-being, financial obligations, or mental stress. However, if you can relieve some of this outside pressure for your employees, you’ll benefit from a more focused workforce.

One example might be offering paid parental leave. If one of your employees has a new baby, they’ll be experiencing major life changes at home. Relieving the financial pressure of taking time off work allows your employees to adjust to their new life and come back to work more focused and less stressed.

Wellness programs can help improve performance.

One of the biggest costs companies have to deal with is employee illness. When an employee gets sick, they don’t just miss work. They often perform worse leading up to their time off and take a while to get back in the swing of things when they come back. Even worse, they can get other employees sick which ends up taking a big toll on your company overall. 

You can mitigate employee illness by instituting a wellness program. This allows your employees to manage their health without having to put in money or extra hours outside of the office. This has the additional benefit of reducing healthcare costs for your company. 

Examples of a company wellness program include free gym memberships, healthy snacks in the kitchen, and regular company outings. These wellness initiatives don’t have to cost you a ton of money but can have a huge impact on your bottom line by reducing employee illness.

A good benefits package can improve company culture.

Your company culture is the lifeblood of your business. You can keep it strong and healthy by listening to your employees’ needs and going above and beyond to ensure they are met. This will help your employees feel more optimistic about your organization. When potential employees or even clients come into your office, they will experience a happy, positive environment that they’re excited to be a part of. Your employees may even share their positive perception of your company outside the office, resulting in a terrific public image that will further help you attract top talent and clients. 

A good benefits package can help you meet your employees’ needs both inside and outside of work. This is one of the best investments you can make towards keeping your company culture strong.

Statistics show that benefits, perks are often more important to employees than a higher salary.

You might have been surprised to read that benefits and perks are more important to employees than their salary. But, according to statistics from the business mentoring network, SCORE, employee benefits are an incredibly powerful selling point for potential candidates. 

According to the survey, 88% of respondents cared more about flexible hours than salary. 80% valued vacation time and work-from-home options. 48% wanted student loan assistance and 42% wanted paid parental leave. Company perks like free gym memberships, free snacks, and weekly outings were also valued by more than 20% of employees.

The survey also reported how benefits contributed to overall satisfaction at work. 53% of employees said that more perks at work increased their quality of life. 49% said they made them feel more valued as a team member and 44% said it directly improved their physical and mental health. The numbers don’t lie. Strong employee benefits and company perks are a necessity in today’s work environment.

Which employee benefits and perks do employees consider when choosing a company to work for?

Now you know the importance of employee benefits, but how do you decide which to invest in? 

The following 10 benefits have ranked the highest from employees varying in ages and backgrounds. Not surprisingly, healthcare ranked number one, followed closely by paid vacation time. Performance bonuses were also high on the list in third place. Paid sick days and 401k options finished off the top five. The next 5 benefits were less traditional including flexible schedules, office perks such as free lunch and casual attire, employee development programs, tuition reimbursement, and employee discounts. 

Ultimately, when it comes to selecting the employee benefits and perks your company can offer, you should analyze what your team values the most and what would help improve their overall quality of life. Taking a survey from your existing employees is a great way to get immediate feedback on where to invest your time and money.