Attracting and keeping good talent and committed employees is getting increasingly difficult. As of the end of 2022, there were over 10 million job openings and only 6 million unemployed workers in the US. Needless to say, that makes for some steep competition when it comes to attracting new talent and keeping the workers you have.
Higher wages are always a great strategy, but don't overlook the potential of employee benefits for not only keeping workers but attracting the best to your company. Here's what you need to know about the tremendous variety of employee benefits at your disposal, whether you employ your workers hourly or on salary, and how to implement them most effectively to build a great workforce and keep it for the long term.
There are all kinds of different types of benefits for employees. Some are typical of most businesses, like health insurance or retirement plans, while others are a bit more unusual, like the ability to bring your pet to work or a game room at the office. Here are some of the most popular examples of employee benefits:
You already offer a competitive salary, a safe and pleasant work environment, and you’re doing a good job of meeting your employees’ needs. So why do you need to offer employee benefits packages? The answer is simple: if you want to compete for good talent and keep it, you need to offer benefits.
Here are some statistics that drive in the importance of employee benefits packages:
Clearly, a great benefits package is key not only to human resources success, but to the future of your business. If you can't attract and keep employees as well as your competition, your business is not going to survive.
The four major types of employee benefits are time off, retirement plans, insurance, and additional pay. Nearly all businesses provide these benefits to some degree. Some are required by law, depending on the size of the business. Here's some more in-depth information about what these employee benefits might look like in a company:
Insurance is perhaps the most essential aspect of employee benefits in America. In fact, until recently, when insurance companies were restricted in the degree to which they could reject coverage for pre-existing conditions, many employees stayed with their employer for the insurance, rather than the paycheck.
Insurance is still a major driver for how people choose an employer and whether they stay with them. Depending on your state and the size of your company, there may be different regulations on exactly how much insurance you're required to provide to your employees.
However, whatever is required by law, more competitive insurance plans are a powerful way benefit. Here are some of the insurance types you can offer:
Good retirement plans that keep building the longer the employee is with the company are a great way to inspire long-term loyalty as part of your employee benefits packages. A 401k which both the employee and company contribute to is a powerful incentive for employees to stay with the company, and can even prompt employees to stay a bit longer, delaying retirement as they wait for the stock market to be at an ideal place to cash out.
Of course, there are all kinds of other retirement plans that can be funded by the company and don’t involve stock options. If long-term employee retention is a major goal of yours, good retirement plans are a great idea.
Paid time off, whether for vacation, family leave, or something else, is extremely precious to pretty much every employee. After all, what could be more valuable than time for employees to spend however they like?
Many companies distinguish between sick leave and vacation time, encouraging employees to plan vacations. Time off for the employee can be beneficial for the company as well. Employees who are able to relax and decompress with paid time off are likely to be happier, better workers.
Hesitant about paying your employee for a lot of time when they're not working for you? A great alternative is to offer training days or team bonding opportunities. The employee feels like they get a break and a perk, but they are learning valuable information to improve their performance or forming bonds that will make them better team-mates, which feels like a good investment for the company as well.
Let's face it, nothing beats cold hard cash when it comes to motivating employees to come and stay with your company. It may not be feasible to offer higher salaries, but extra compensation can be provided on a case-by-case basis as part of employee benefits packages.
In fact, many business owners find it much better to leave room in the budget for these kinds of bonuses than to increase wages across the board. Employees may be more motivated to work for periodic high lump sumps than for regular wage increases.
There are all kinds of ways to use extra compensation to motivate your employees and provide a valuable benefit. Here are just a few examples of how you can use extra money as a benefit:
The four primary types of benefits included in employee benefits packages are extra money, time off, retirement plans, and insurance. However, it can be argued that there is a fifth kind of employee benefit just as important as these four. This extra benefit is employee population-specific benefits. The perfect benefit to keep and attract your ideal worker may be specific to your situation. Here are a few examples.
Once you start thinking about it, you'll likely realize there are some types of benefits for employees particular to your company and work population that are particularly effective for your employee benefits packages. By honing in on these benefits, you can get a lot of return on your investment.
Employees may be willing to work longer hours or settle for lower salaries if they feel that your company is helping care for their pets or kids. Workers who are provided compensation for education or training may decide to grow within your company so you can keep the best talent and build a workforce with long-term experience at your company. Sometimes, finding the perfect employee benefit for your particular company is more valuable than a significant raise.
You have surely thought about health insurance, retirement plans, and even free snacks when building employee benefits packages. However, if you're trying to beef up your employees benefit packages without going far beyond your budget, getting creative with some employee benefits you may not have thought about before can be helpful. Here are few examples of employee benefits that may not have occurred to you:
People love their pets, arguably now more than ever before. In 2021, people spent around $300 more on their pets than they did in 2013, and that's likely a low estimate. A lot of that money goes into medical care and care for pets while employees are at work.
Taking care of those concerns for your employees can be a tremendous benefit for pet owners. You can offer a pet insurance plan, let people bring their pets to work, or allow for flexible scheduling so that employees can go home during the day to care for pets.
Want to invest in your employees and encourage them to invest in the company, but don't have a lot of liquid capital? Profit sharing can be a superb solution. Allow your employees to take some of the share of the profit for their hard work. They'll be more likely to stay around for the long-term, especially if they think your company is doing well, and they'll probably work harder too.
You have a built-in benefit right in your company, assuming that your workers have different skill sets. Training within your company as part of employee benefits packages allows your workers to see a path forward within your company, rather than seeking their fortunes elsewhere.
For instance, a restaurant could create a shadowing program in which waiters can learn from chefs if they like. You won't have to spend much for the benefit, but you'll likely have much more dedicated waiters who are also a lot more knowledgeable about your menu.
Think it will be a hard sell to convince your employees to do more work at your request for free? You may be surprised by the enthusiasm your employee show for volunteering.
Volunteering together can be a great team bonding opportunity. By facilitating volunteering opportunities, you can introduce your employees to a new experience they may enjoy. Needless to say, the fact that you won’t need to provide compensation is an added benefit for you.
You already have vacation and sick days, so do you really need to give your employees another designated type of day they can use to take off work with? Many employers would argue that you do.
Mental health is a serious problem for many workers. Offering a no-questions-asked opportunities for workers to take off when they need to can be deeply beneficial. Many companies benefit just from having a private break room where employees can take a moment to themselves during the work day if they need to.
A library is a great way to foster bonding between your employees as a creative part of your employee benefits packages. You don't just need to stock it with books either.
Encourage employees to bring in games, movies, and magazines, as well as books, to share with the rest of the company. Limited on space? Create a digital dropbox where employees can deposit suggestions of favorite TV shows, music they're listening to, etc. It’s not hard to create a sharing space where employees can get to know each other better.
Many workers, especially young workers, struggle to manage their money. Over half of Americans don't have enough in their savings account to cover a $1,000 emergency. As the provider of your employees' income, you’re in a great position to encourage money management. Offer a saving account, provide classes or counseling in money management, and consider offering low-interest loans when your employees really need them.
You've probably already thought about offering good family leave, but if you have decided you can't afford any more family leave or stipends to help families with child care, think about some other options you may have.
A designated area for breast pumping and storing breast milk and a flexible schedule so that mothers can breastfeed more easily can be a huge perk. Even if you can't subsidize child care all year, consider offering financial help with a summer school program or camp so that your employees don't take on an additional financial burden between school years.
By thinking outside the box, you can find some great ways to help your employees with childcare. Asking your employees with children where they’re struggling most is a great way to start.
If more vacation time is a good perk, what about unlimited vacation time? Unlimited vacation time can be a frightening perspective for a company. After all, how will you know if you have sufficient staffing if everybody can take off for as long as they want?
In fact, many employers find that offering unlimited vacation works out well as an affordable feature of attractive employee benefits packages. After all, it doesn’t cost you anything to allow employees to take unpaid time off when they want to. You can still be demanding about ensuring that employees schedule their time off ahead so you'll know you have coverage.
Giving employees the option to make less and work less when they want to can help you keep employees you may otherwise have lost. It’s also an affordable perk that attracts great talent. Workers who want time for their own projects or private life and don’t need as much income may decide to pick up some hours and extra income with you, offering you a more flexible and often more capable workforce.
One way to make your company a more enjoyable place to work is to arrange for visitors to the office that will make your employees’ work day better. Consider having a therapy dog or even someone's pet come to visit for the day.
Hire a chiropractor or massage therapist to provide their services to your employees for free. Even something as silly as hiring a Santa Clause for a holiday party at work can inspire good feelings for your company from your employees. Your employees will find work a lot more fun if they’re always wondering what wonderful new thing you're going to come up with.
Every company varies a little bit in what kind of employee benefits packages they offer. However, there is a definite expectation when a company offers full benefits. Here are the benefits that you might expect from a full benefits package:
No matter what kind of business you have or how many workers you employ, benefits are something you need to be thinking about. Your company may be small enough that you aren't required to offer health insurance, but if other businesses like yours are doing so, you're unlikely to keep the best employees for long.
Building a company with employees that your competition rejects is not likely to result in smooth business operations. In fact, the job market is so competitive that you may not be able to attract enough employees to keep your doors open unless you offer a good benefits package. By getting creative about the kinds of benefits you can offer, you can attract good workers and keep them happy even on a tight budget.