12 Types of Employee Benefits Every HR Practitioner Should Know (survey)
What types of employee benefits are most appreciated among the different generations in the workplace? That’s what we’ll take a look at in this article that’s based on a recently released study on employee benefits. The study was done among more than 19,000 participants from 61 organizations and its results were published in the Employee Happiness Index 2019.
What are employee benefits?
What are the four major types of employee benefits?
Employee benefits every HR practitioner should know
Types of employee benefits among the different generations
What are employee benefits?
Employee benefits cover the indirect pay of your workforce. This can be health insurance, stock options, or any myriad of things offered to employees. While two jobs can offer the exact same salary, they can vary greatly in terms of benefits, hence making one offer a better financial proposition than the other. This highlights the importance of employee benefits in a job offer.
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Find out about the four types of employee benefits you should know about in this Learning Bite
Some employee benefits are country-specific. In the US, for instance, health insurance is a key component of employee benefits packages and in France, many employees get restaurant vouchers for every workday.
Providing fair, performance-based compensation is an inextricable part of human resource best practices. Compensation and benefits go together, with the former covering your employees’ salary. For an in-depth article on this key element of Human Resource Management, check out our full guide on Compensation and Benefits.
What are the four major types of employee benefits?
Traditionally, most benefits used to fall under one of the four major types of employee benefits, namely:
- Medical insurance
- Life insurance
- Retirement plans
- Disability insurance
Nowadays, however, the list of employee benefits continues to grow. We’ll take a look at different examples of employee benefits below.
Types of employee benefits every HR practitioner should know
In its 2019 Employee Happiness Index, HR tech company Benify distinguishes 4 categories of employee benefits:
- Benefits at work
- Benefits for health
- Benefits for financial security
- Lifestyle benefits
Benefits at work
This includes working hours & leave, skills development, food & beverage, and employee clubs, activities & gifts.
Working hours & leave
Think of flextime here for instance. Flextime gives your employees the possibility to decide about their working hours and/or the location they want to work from. Other examples include additional holidays and, one of the other benefits employees value most, paid parental leave.
Rapid technological developments and the fact that people change jobs more often make skills development more important too. Skills development, however, is not just an important benefit for (younger) employees, it’s also essential for organizations if they want to remain competitive.
Food & Beverage
We already mentioned the meal vouchers in France. Other benefits that fall into this category include free lunches, fruit, and coffee. At AIHR, we get to enjoy a free lunch every day and it’s something that’s very much appreciated by the team. As an added bonus, free lunch and fruit are also a good way to promote healthy eating habits at work.
Employee clubs, activities & gifts
There are heaps of possibilities when it comes to this category of the employee benefits package: knitting clubs, running groups, (video) game nights, Secret Santas, anniversary gifts, you name it.
Benefits for health
Think of health and wellness and healthcare here.
Health and wellness
More and more companies have employee wellness programs. The possibilities are endless and examples of employee wellness programs vary from a simple gym membership to full suite solutions that include physical, mental and financial wellness.
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A focus on total employee wellbeing will be one of the key HR trends for 2023, and organizations with the HR departments in the lead will be looking for ways to improve the different aspects of their employees’ wellbeing.
Healthcare benefits also come in different shapes and sizes. Think of physiotherapy and chiropractic sessions, for instance, but sometimes fertility treatments and psychological support can also be included.
Benefits for financial security
The number one thing here are pension plans. Other benefits for financial security are insurances, financial benefits for employees, and personal finance benefits.
Interestingly, according to the research study, pension plans are considered as a very important benefit by every generation, but they’re not among the top ten most appreciated benefits.
As we mentioned above, in some countries health insurance is something that comes with the simple fact of being an employee. Other types of insurance benefits for employees cover parental leave or injury.
Think of commissions, bonuses and the possibility for employees to buy shares of the company they work for.
Personal finance benefits
The Benify report too shows that stress about personal finances has grown bigger over the past year. Yet another reason for employers to seriously start thinking of benefits such as advice about loans and savings. In other words: employee financial wellness.
Lifestyle benefits consist of work-life balance and mobility.
As employees increasingly attach importance to their work-life balance, it’s no surprise that benefits in this area become more popular too. Examples are childcare, grocery delivery, and legal services.
Mobility benefits can make your employees’ life a lot easier. Because even if they can work from home or elsewhere, they’ll still have to come into the office – or workplace – regularly. This category covers things like public transport and cars but also bicycles and carpooling.
What types of employee benefits are most appreciated among the different generations?
Different generations of workers (often) want different things. We’ve already seen this in our article about generational differences in the workplace.
As each generation is in a different stage of their lives, it’s no surprise that they tend to appreciate different types of employee benefits. After all, young Millennial parents have other priorities than a close-to-retirement Baby Boomer, right?
The Benify study separates employee benefits into two categories: those that employees find most important and those they most appreciate. Let’s see what the overview looks like per generation.
Two things immediately stand out when we look at what benefits people find important. The first and perhaps the most obvious one is the fact that pension plans gain in importance as the generation gets older. This is something that makes sense as graduates who just entered the workforce probably won’t be thinking about their retirement in 40+ years yet…
The second thing worth noticing here is skills development. Unsurprisingly, the development of new skills is more important for younger generations – as they will be more affected by technological developments – than it is for Baby Boomers.
Something that’s important for all employees, regardless of their age, and that tops almost every list, are working hours and leave.
When we look at the benefits that are most appreciated by employees, the top 5 per generation looks slightly different. All of a sudden things like food & beverage and mobility pop up on various lists. The number one among pretty much every generation, however, is health & wellness.
It’s interesting to see that financial wellness is something that the youngest generation in the workforce, Generation Z, has in its top five. As companies will increasingly hire people from Generation Z, financial wellness will probably become a more important employee benefit.
Well, there you have it, 12 types of employee benefits every HR practitioner should know. The days where employee benefits packages offering health insurance and a basic pension plan were enough to get candidates working for you are over. Today’s candidates and employees expect benefits at work, benefits for their health, financial security and work-life balance. If you want to get a competitive edge, you need to make sure to choose the best employee benefits that fit your workforce.
You can download the full report for free here.
What are employee benefits?
Employee benefits cover the indirect pay of your workforce. This can be health insurance, stock options, or any myriad of things offered to employees.
What are the four major types of employee benefits?
Traditionally, most benefits used to fall under one of the four major types of employee benefits, namely: medical insurance, life insurance, retirement plans, and disability insurance.
What benefits do employees value most?
Benefits that employees value most include flexible hours, the opportunity to work from home, vacation time, and paid parental leave.
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What questions should I ask in an employee benefits survey? ›
- How would you rate our health insurance policy?
- How would you rate our sick leave policies?
- How would you rate our flexible work policy?
- Rate each of our benefits in terms of importance to you.
- How happy are you with our paid time off policy?
Typical employee benefits may include: Paid vacation time. Medical, dental, and vision insurance. Disability insurance.What is the most common type of employee benefit answers? ›
According to our 2022 Employee Benefits Survey Report, the most popular employee benefits are: Health insurance. Paid time off (PTO) Retirement plan benefits.What are types of employee benefits? ›
Benefits are any perks offered to employees in addition to salary. The most common benefits are medical, disability, and life insurance; retirement benefits; paid time off; and fringe benefits.What are the top 3 most sought after employee benefits? ›
- Flexible work hours. ...
- Company-sponsored retirement plan or pension. ...
- Leave early on Fridays. ...
- Four-day work week. ...
- Family health insurance. ...
- Private health insurance. ...
- Healthcare cost reimbursements. ...
- Paid self-care days or time off for mental health.
- What's going well in your role? Any wins this week? ...
- What challenges are you facing? ...
- How are you feeling? ...
- On a scale of 1-10, how fulfilled are you? ...
- Ask for feedback on ways you can become a better leader.
- Health Insurance. ...
- Life Insurance. ...
- Dental Insurance. ...
- Retirement. ...
- Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs) ...
- Paid Vacation and Sick Time. ...
- Paid Holidays. ...
- Paid Medical Leave.
Statutory benefits, also known as mandatory benefits, are entitlements that employers are obligated by law to provide to their employees. Common examples include benefits like paid annual leave, parental leave, worker's compensation insurance, and paid sick leave.What are the most popular employee benefits? ›
Many companies providing this benefit have seen it be the most popular benefit among their employees. And employees also tend to take almost the same amount of vacations as they used to earlier.
- Paid leave.
- Affordable health insurance.
- A free weekday lunch.
- Digital coaching.
- Mental health prevention services.
- Gym reimbursement.
- Tuition reimbursement.
What are some examples of employee benefits and why are they important? ›
Some examples of employee benefits are health insurance, stock options and medical insurance; these are some basic benefits offered to employees. Some of the employee benefits are country-specific. For instance, life insurance is one of the key components of employee benefits.What are the types of employee benefits every HR practitioner should know? ›
These benefits may include, group insurance (health, dental, life etc.) retirement benefits, education loan, other loans (house loan, vehicle loan etc), sick leaves, vacation as well as flexible alternative arrangements.What are the types of employee benefits as per AS 15? ›
Regular period benefits (Eg: Salary, Wages etc) Compensation of short-term absence (Ex: Sick leave, Annual leave, etc) Bonus/Profit payable within 12 months from the end of the period in which employee rendered services. Non-Monetary Benefits (ex: Medical Insurance, Housing, etc)What are the type of compensation and benefits in HR? ›
Compensation includes wages and salaries, while benefits include things like health insurance, vacation time, and pension plans. Compensation and benefits are important because they can help attract and retain talented employees.What are the top workplace benefits for 2022? ›
Healthcare emerged as the leader in ranked importance by employers as the most important type of benefit that an organization can offer its workers followed by retirement and leave benefits, which ranked jointly at number two. Retirement benefits were at 55 percent in 2020/21, back up to 82 percent in 2022.What are key benefits for employees? ›
Always a key benefit, healthcare has never been more important than it is during the midst of a pandemic. Paid time off. Employees need to recharge and employers want employees focused on their work, so it makes sense that paid time off is a key benefit. Flexible hours.What do employees want most 2022? ›
A salary that contributes to their financial wellness; a sense of safety and stability; opportunities for learning, growth, and career development. All these things are fundamental in order to build a good workplace that employees will love and want to stay in.What are killer questions? ›
What are killer questions? Killer questions are questions that are asked to candidates who register for a specific job advertisement and have the effect of filtering applications and carrying out a very first screening action.What are the tricky HR questions? ›
- What are your weaknesses? ...
- Why do you want to work here? ...
- Where do you see yourself in five years? ...
- Why do you want to leave your current company? ...
- Why is there a gap in your work history? ...
- Tell me about a time you made a mistake. ...
- What can you offer us that other candidates can't?
- Why did you decide to apply to this role? ...
- What experience do you have that would be relevant to this role? ...
- Tell me about your experience in … ...
- What did you like most about the job description? ...
- Why are you leaving your current job?
What are the three most important benefits? ›
Most Desirable Benefits According to Employees
If you want your benefits package to remain competitive, you'll want to offer health insurance, some disability and life insurance, and probably a retirement plan, such as a 401(k).
Mandatory benefits, also known as statutory benefits, are benefits that employers are required by law to provide to their employees. Examples include worker's compensation insurance, unemployment insurance and, under some state and local laws, paid sick leave.What are mandatory benefits in HRM? ›
Mandatory employee benefits in India include Employees' Provident Fund, which includes Employees' Pension Fund and Employees' Deposit Linked Insurance; Employees' State Insurance Scheme; statutory leaves; Gratuity; and Maternity Leave.What are legally required benefits? ›
Some common examples of statutory benefits include social security, Medicare, unemployment insurance, and work injury insurance, just to name a few. Non-statutory benefits, in contrast, are not required by law and include benefits such as health insurance, dental insurance, disability insurance, and pension plans.What is a good employee benefits package? ›
Company holidays, personal days, sick leave, and other time off from work. Retirement and pension plan contributions. Tuition assistance or reimbursement for employees and/or their families. Discounts on company products and services; housing.How important is knowing about compensation and benefits for an HR practitioner? ›
HR needs to understand how the money is going to be spent. Keeping compensation and benefits balanced is critical to making sure HR can continue to adapt the strategy accordingly. Most HR departments only look at the compensation of employees at the end of the year or during an employee review period.What are the 6 types of compensation? ›
- Base Pay.
- Overtime Pay.
- Bonuses, Profit Sharing, Merit Pay.
- Stock Options.
- Travel/Meal/Housing Allowance.
- Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...
These benefits typically include medical insurance, dental and vision coverage, life insurance and retirement planning, but there can be many more types of benefits and perks that employers choose to provide to their teams.What are key things that should be in every employee engagement survey? ›
Important engagement factors, including employee happiness, goal alignment, and future objectives, should be included in a survey. You'll need to include questions in various areas to do a survey with employee engagement questions that meet your company's requirements.How do you evaluate employee benefits? ›
- What is the cost share? ...
- What is covered? ...
- How extensive is the health care provider network? ...
- How much are deductibles, co-pays, co-insurance, and premiums? ...
- What benefits do you and your employees absolutely need? ...
- What is the reputation of the insurance company?
What are the three 3 most important benefits an employer can give to an employee and why? ›
After all, there are baseline employee benefits that most industry experts say are needed to attract talent competitively: healthcare, paid time off, and possibly a retirement savings option.How do you measure employee benefits for success? ›
- Account for Different Data Points.
- Know What Your Employees Value.
- Track Team Engagement.
- Determine the Number of Days Worked.
- Define Measurable Payback.
- Calculate the Cost of Turnover.
- Speak Directly With Employees.
- Check for Growth-Oriented Work.
To avoid this pitfall, it's important to identify your main objective and your target audience before doing anything else. At most, a survey consists of three parts: the introduction, the questions themselves, and the conclusion.What are the benefits of an employee survey? ›
- Improve your business: Surveying your employees is a great way to identify opportunities and any obstacles to effective management. ...
- Increase employee engagement: ...
- Boosts employee retention: ...
- Promotes a positive working environment: ...
- Setting a benchmark:
- Health insurance. ...
- Life insurance. ...
- Paid time off—that actually gets taken. ...
- Family leave. ...
- 401(k) and retirement planning. ...
- Student loan assistance. ...
- Career development. ...
- Lunch stipend or team lunch.
While this can differ depending on who you ask, the standard in most industries consists of health insurance, dental insurance, flexible spending accounts, retirement savings plans, vacation time, and additional paid time off for events like family medical leave, maternity leave, and sabbaticals.