What Are Employee Benefits and Why Are They Important?
Along with salary and location, one of the most important aspects of a professional role is what kind of employee benefits are offered. A robust and helpful set of benefits, including non-traditional employee benefits, can be a compelling reason why someone applies for and/or remains at their job.
Given benefits’ potential impact on attraction and retention, as they strategize their offerings, it’s helpful for leaders at organizations to ask: what is the importance of employee benefits in HRM?
Are employee benefits really necessary?
When weighing the importance of employee benefits, some HR leaders might wonder if these offerings are really necessary. To answer that question, it’s helpful to consider all the ways that employee benefits can support workers’ well-being and goals.
Some benefits, such as health insurance, provide assistance when employees need medical or preventative care. Other offerings, like education benefits, can encourage a sense of being on a long-term trajectory at their company. For example, according to the 2024 Workforce Edge learner survey of employees who use the platform to manage their education benefits, 65% of Workforce Edge users surveyed report that they see a clear career path for themselves at their company.
What are the top 5 types of employee benefits?
The term “employee benefits” covers a wide range of potential offerings. Companies looking to create a competitive benefits strategy should weigh what benefits are the most attractive to workers. The top 5 types of employee benefits are often:
Health insurance. This coverage can help take care of medical bills, treatments, and preventative care, and it can often include insurances that covers dental and vision. Depending on the details of the insurance plan, an employee’s spouse, domestic partner, and/or children may also be covered.
Retirement savings accounts. 401(k) accounts can be a helpful way for employees to plan for their future financial stability. They can give people peace of mind that once their working years are over, they’ll still receive steady monetary support. Often, 401(k) plans offer tax advantages and are made more effective by employer contributions.
Life insurance. By offering life insurance, a company can help employees with their long-term financial goals. Some policies will cover a years’ worth of salary while others can cover a larger sum, depending on what the employee has selected. Additional coverage can include employee contributions.
Paid time off and paid sick time. Paid time off (PTO) is designed to provide income when an employee is unable to work. This can include vacation time, mental health days, times of sickness, time needed to care for loved ones who are sick, and other important periods of time.
Education benefits and career development opportunities. This is a vast category of benefits that can include a lot of options, all designed to make employees feel valued at their company. According to the same learner survey conducted by Workforce Edge, 63% of Workforce Edge users report they feel supported about the same by their employer since they began their program.
What benefits do employees value most?
The most valued and best employee benefits offered today are generally considered to be those that include health insurance coverage. Many Americans receive this insurance through their employer, and it’s a way to both support one’s health as well as the health of one’s family members.
Why is it important for employees to know their benefits?
If an employee isn’t aware of what benefits are available to them, they won’t be able to take advantage of those benefits. This lack of awareness can also lead to employees not feeling supported by their organization because the value of employee benefits is often found in benefits’ ability to create a satisfying work-life balance.
This can be particularly true for education benefits. According to LinkedIn’s 2024 Workplace Learning Report, 8 in 10 people say learning adds purpose to their work. Only those employees who know about learning and development opportunities are able to pursue them.
Education benefits and other employee benefits can be highly valued by modern employees. These benefits help support their lives during and outside of work and can contribute to an overall sense of satisfaction with their employer.
If you’re looking to create, expand, or review your education benefits offerings, Workforce Edge can help. We offer consultations that can help you manage your overall education benefits strategy, uncover hidden efficiencies, and iterate on your policy to work better for both employees and your organization.
Schedule a consultation to get started.
Along with salary and location, one of the most important aspects of a professional role is what kind of employee benefits are offered. A robust and helpful set of benefits, including non-traditional employee benefits, can be a compelling reason why someone applies for and/or remains at their job.
