Employee benefits are nothing but additional perks that are not a part of a regular salary. Providing a competitive benefits package to their staff is beneficial for businesses – this practice drastically increases performance and reduces turnover.
Among other things, Millennials and Gen-Z workers value such traditional benefits as medical insurance and retirement plans to sustain a better life at work and beyond. Therefore, companies try to offer benefits packages in both cash and kind since they are imperative for attracting and retaining employees during times when talent and skills are scarce.
So, in this piece, we shall discuss the importance and different types of employee benefits organizations must focus on. But first, let’s see what kind of employee benefits exist.
What Are Employee Benefits?
Employee benefits come as an addition to a hefty paycheck at the end of every month, and each organization has its own unique benefits program based on the needs and requirements of its employees.
Such benefits may include:
Now that we have an idea about employee benefits, let’s take a look at some of the most common of them and those that people actually want:
5 Types of Employee Benefits Each Organization Must Have
1. Leave policy
Employees are legally entitled to take paid leaves throughout the year apart from their week offs and national holidays. Organizations must provide an ample number of paid and sick leaves for employees. And the latter can avail these leaves at their convenience whenever they need them (it could be for personal commitments or unavoidable circumstances).
2. Bonuses
Bonuses – aka forms of pay outside of the base pay – keep employees motivated and help improve their job performance. It varies from country to country on which occasions or festivals the companies want to give out bonuses. Some also provide their staff with yearly bonuses based on employee performance and profits.
3. Salary increment
Employees want to feel valued and appreciated for their hard work, and increments are the best way to reward them for their contributions. Employees look for benefits like salary increments, which means increasing their salary once or twice a year. The percentage of the raise usually depends on their performance and reviews.
4. Promotion
Apart from salary raises, employees expect to receive fair promotion in designation, too. Career growth is a significant benefit strategy organizations must practice. However, a promotion must only happen after judging the performance of an employee. It would be best to give your team members fair and equal opportunities when looking for someone to take a new job position.
5. Medical benefits
Employee health is imperative for organizational success. Companies must monitor their employees’ physical and mental health and provide necessary health facilities. After all, employees are your main assets, and you should remember that healthy employees would show a lower absenteeism rate. Thus, consider offering employees health insurance, medical reimbursement, sick leaves, mental health awareness, etc. – these are probably the most vital types of employee benefits out there.
Other benefits
The above are the most common types of benefits, but there are many others that employees can receive from their employers too. Extra benefits may include baby care for new mothers, maternity leaves, period leaves, etc.
Let’s have a quick glimpse at those extra employee benefits here:
- Flexible hours for single parents
- Retirement plans
- Disability insurance
- Daycare
- Parental leave
- Education loans
- Entertainment
- Housing allowance
- Sabbaticals
- Food and beverages
- Gift cards and discount coupons
- Rewards and recognition
But do these benefits help businesses to grow?
Importance of Employee Benefits in a Workplace
Implementing an different types of employee benefits fosters a positive work environment and improves employee mental health. This ensures undivided dedication from employees. As a result, companies can notice increased productivity, which also generates greater revenue.
So let’s see how these benefits are advantageous for your business and staff:
1. Higher employee productivity
Employees can either build or break an organization. They are the most significant assets for success and development. Hence, organizations must prioritize and care for their employees. Over-pressure and unrealistic deadlines can lead to employee burnout and hamper employee productivity.
Thus, employers must pay attention to their employees’ needs and provide them with some extra benefits. Doing so leads to increased productivity and employee happiness.
2. Motivated team
Lack of motivation is among the primary causes of high absenteeism. However, the benefits mentioned above not only keep employee burnout at bay but also help in elevating their motivation level.
The extra paid leave can allow them to take care of their personal commitments. Similarly, other employee benefits are helpful in various ways. These benefits keep employees motivated and boost their happiness, and a satisfied employee yields excellent results and shows higher productivity with outstanding performance.
3. Positive work environment
The purpose of employee benefits is to elevate employee motivation and build confidence. Such perks help employees to work effectively and, hence, improve the company’s bottom line.
Of course, if employees yield higher results and profit, employers must celebrate by giving additional benefits. Options like flexible work, break room, and nap pods can help you create a desirable work environment. Productivity will rise while your branding sees a significant boost in value. This ensures peace in the workplace and employees stay afar from stress and burnout.
4. Improved brand recognition
One of the major importance of employee benefits is that it helps in broadly improving brand recognition. When employees feel happy working at the organization, they will advocate it to other people outside the company.
Word of mouth does the trick. When employees talk good about your company culture, people tend to believe. People get to know about your company and desire to join you in the future, knowing you care for your employees.
Also, organizations that care for their employees care for their customers equally. Based on this, many people gain trust towards the organization and start believing in its products and services as well.
What Types of Employee Benefits to Embrace? Final Takeaway
A successful organization cares for its employees and creates the best working environment for them by providing valuable perks. And luckily for every business, there are plenty of different types of employee benefits to choose from.
Employees can get many benefits depending on their company policy, budget, and size. Nevertheless, benefits are not only advantageous for employees but also for employers. They foster increased productivity and team motivation.
This article is contributed to actiPLANS by Gautam Gayan, a Content Marketer at Vantage Circle.
