10 Best Employee Benefits You Should Offer & Why In 2023
Providing generous benefits can pay dividends in employee retention and morale. Here are some of the best benefits to offer employees this year.
While the economy in the United States remains unpredictable, a labor shortage remains in a wide variety of fields. Individuals, particularly younger workers, are savvier than ever and far less willing to settle for the low wages that have been the norm in the country for decades. As such, companies are needing to scramble in order to entice people back into the workforce.
Some industries have already responded with modest increases to their starting salaries but, with the increasingly high cost of living, that still might not be enough.
Another way to make your company more desirable and your employers happier is by offering benefits packages. And while most business owners know about things like health care and 401k offerings, there are plenty of other unique and intriguing benefits that you might want to consider. Here are some of the best employee benefits your company can offer.
Table of Contents
- Why You Should Offer Competitive Employee Benefits
- Top 10 Benefits Employers Should Offer
- How To Start Offering Employee Benefits
- FAQs About Employee Benefits
Why You Should Offer Competitive Employee Benefits
Business owners who are overly obsessed with the bottom line may be tempted to skimp on employee benefits as a way to cut costs. But research shows this is a poor choice on multiple fronts. A 2019 study from Achievers showed that only 21% of employees reported being highly engaged at work. And if this isn’t shocking to you, maybe consider a similar report from Gallup that estimates disengaged employees have 37% higher absenteeism and 15% lower profitability, all tallying up to costing business owners 34% of a disengaged employee’s salary.
Keep in mind, too, that the study was done prior to the 2020 pandemic, and workers now have a far lower tolerance for low pay and dissatisfaction on the job.
Fortunately, offering a unique and broad array of benefits can dramatically impact the number of applicants you get for openings and can have a big effect on your current employees’ morale. And some of these benefits that you might not have even considered come at a very small cost to your business — and can pay dividends if they boost your workforce’s overall happiness.
Top 10 Benefits Employers Should Offer
Employers should offer a mixture of practical benefits like 401k matching and parental leave as well as more unique benefits like tuition reimbursement and employee care packages to keep individuals engaged and invested in the company.
Here are some of the best employee benefits that you should consider as a business owner:
1) 401(k) Matching
According to the US Census Bureau, only 32% of Americans are currently investing in a 401(k). This pairs with many other statistics that show that younger workers have very little, if any, savings for retirement, something that could lead to a legitimate crisis in the near decades to come. While employees may have modest individual retirement accounts, there is a difference between an IRA and 401(k). Offering a matching program incentivizes employees to make modest pre-tax contributions from their paychecks that can pay long-term benefits. The prospect of saving for the future can be daunting for many workers (and, at times, very difficult), but this is an easy benefit to offer with clear results.
2) Strong Healthcare Options
Perhaps the most important and beneficial “perk” that your company can (and quite frankly should) offer is small business health insurance. Especially in a country without universal health care, employer-based insurance is considerably cheaper than buying either public or private insurance. It’s also important not to skimp on your healthcare insurance offerings either. Making sure that your plans don’t have sky-high deductibles or co-pays will keep employees happy. Go the extra mile and include additional insurance for things like dental and eye care.
It’s estimated that Americans are nearly $50 billion in debt as a result of medical expenses. Having affordable health insurance results in healthier employees who are incentivized to take more trips to the doctor and keep up with their health in general, saving companies money in the long run.
Considering offering an FSA or HSA savings account for your employees is also a great idea!
3) Flexible PTO
Paid time off is often a sticking point for companies and employees when negotiating pay and benefits. Many companies, including some of the country’s biggest, have started offering virtually unlimited PTO. On the surface, that might sound absurd, but studies have shown that employees who have the flexibility to take time off when they need it don’t abuse the system and, in many cases, actually end up taking fewer days off during the year. This also cuts down on the stress of employees scrambling to use all of their days off before losing them, potentially leaving you short-handed at the end of the year.
4) Flexible Schedule
Assuming you have a business that doesn’t actively need its workers on the premises, giving your employees the flexibility to work from home or work hours that better fit their schedules can be an appealing benefit. For employees struggling to work around childcare needs or who may have a stressful commute, this flexibility can dramatically help their morale. With so many workers operating from home during the pandemic, many businesses actually found that their employees were equally — if not more — productive. Having a remote workforce can also save you money on overhead, making this a perk that actually earns you dividends.
5) Tuition Reimbursement
At the end of 2020, it was estimated that Americans owed $1.7 trillion dollars in student debt. It is a crippling burden in some cases, and many individuals don’t see a way out in their lifetimes. Offering tuition reimbursement can provide a light at the end of the tunnel for employees and keep them motivated to stay at your company. What’s more, it can provide more practical help than even a higher salary might.
6) Gym Memberships
The physical health of your employees is important, and one of the best and easiest ways to attain a healthy workforce is to provide gym memberships for those who want them. Especially if your job requires you to sit for long stretches of time, a gym membership could be a useful and fun perk that is relatively low-cost but could make a big difference in your employees’ overall wellness.
7) Stock Options Or Company Equity
Maybe one of the best ways to ensure that your employees have your company’s best interests at heart is to allow them to be literally invested in the strength of your business. Giving your employees stock options or equity in the company makes it so there is a very tangible benefit to performing to the best of one’s abilities. It makes individuals feel more of a part of the business as well.
8) Work Perks Or Expenses
Any additional expenses that a company can pick up to aid their employees can go a long way. If there is hardware or software that is required to do the job, providing that equipment cost-free is something that more and more employees are coming to expect. It’s also an affordable “perk” and tax deductible. But there are other monthly or yearly expenses that your company can pick up that can act as a big incentive to current or potential workers. Helping to pay phone bills, gas expenses, or other stipends can help your employees feel appreciated.
9) Life Insurance
It’s estimated that just over half of Americans are covered by some form of life insurance. However, only about 30% of Americans are estimated to have sufficient life insurance to make sure their loved ones aren’t burdened financially. It’s not often something that younger workers, in particular, think about often. That’s why offering employees a basic but sizable life insurance policy can be a way of looking out for them that they either would not have considered previously or may not have felt they could afford.
10) Appreciation Gifts
You’d be surprised how much even small tokens of appreciation can go toward improving employee morale and overall job satisfaction. Even in a work environment that is extremely supportive overall, it’s easy for individuals to feel overlooked or underappreciated. Tokens of recognition, either in the form of small bonuses, gift cards, or other gifts can be a great way to let everyone on your staff know you appreciate them. You can time them with birthdays, work anniversaries, or employee appreciation week to give your workers boosts throughout the year.
How To Start Offering Employee Benefits
Many of the benefits mentioned in this post are easy to set up. For those, it’s simply a matter of figuring out how much you want to budget throughout the year to give back to your employees.
Some, however, like health care and 401(k) matching, can be a little trickier. You’ll need to sit down either with your HR department or a financial advisor to figure out what your total annual costs will be and what the best plans are for your workforce. And if you’re looking for other creative ways to potentially cut costs and keep employee morale high, there are benefits in offering remote work to employees as well.
And remember, these aren’t just added expenses. There are investments in the overall health and happiness of your employees and can lead to significant dividends down the road. As the workforce continues to get savvier and the demand for good employees increases, a few extra perks in a job package can go a long way.