What Are 5 Types of Employee Benefits?

Employee benefits are any official, organized support that a company provides its employees outside of salary/compensation. These can include programs that support employees and their family members’ health, well-being, long-term financial goals, and other aspects of their lives.

When considering the importance of employee benefits, it’s essential that HR leaders create a benefits package that aligns with the needs and interests of their employees.

Many of these types of employee benefits in hrm (human resource management) are relatively standard: insurance that covers health or life, reimbursement for travel expenses, and others. But companies should consider providing other forms of benefits, including education benefits and other career development opportunities.

Education benefits in particular can help companies remain competitive in a crowded job market: a 2022 survey by Amazon and Workplace Intelligence found that employee development is key for attracting talent. Nearly 90% of respondents said strong skills development programs (87%), ample career advancement opportunities (88%), and paths to different career tracks (87%) were important when considering a new job.

Companies who would like to remain competitive when attracting potential employees should consider what benefits are the most popular. They should explore existing employee benefits examples and decide which ones will best support their future and current employees. Throughout the process, it’s important for leaders to get feedback from their workforce and see which benefits are successful and which ones might need to be revised. This feedback can be collected during annual check-ins, informal chats between managers and their teams, and company-wide surveys. Feedback can also be given during performance reviews, which can be a chance for employees to express what benefits might be most helpful to assist with their goals.

Out of all the benefits that are available to employees, health insurance coverage is often one of the most popular. Others are also common, including education benefits, retirement savings plans, paid time off, and travel expense reimbursement.

What benefits do employees value most?

Employees seek out companies with unique employee benefits as well as ones that offer non-traditional benefits. Among the benefits that are valued by employees are health insurance, life insurance, paid time off, and benefits that assist with professional development.

It’s important to note that professional development benefits aren’t just important to employees. This type of benefit has seen an increase in interest among companies over the past few years: according to a survey conducted by Strategic Education, Inc., 51% of business leaders say that building the workforce skills needed for the future is among their organization’s primary motivations for offering a tuition assistance program.

Because employees place a high value on benefits and consider which ones are available when applying for a new role, it’s important for companies to continually communicate what is available—both for prospective and current employees. Details about benefits can be shared via the company’s internal website, newsletters, email, or as part of new hire orientation. They can also be shared during events held by the organization’s leadership team.

With the wide range of options available, it should be a priority for organizations to determine which benefits will best support their employees. From unique employee benefits to ones that are offered at most companies within the same industry, there are a lot to choose from.

Since each organization has its own unique needs and workforce, benefits that are effective for one company might not be as effective for another. As a result, companies need to tailor their benefits to suit their specific employees’ needs.

This can include offering creative benefits such as remote work options, access to workout equipment and classes, employee reward programs, and discounts on travel or electronics. Some companies with onsite office workers offer spaces for those workers to bring in their household pets, which can make the work environment more friendly and comfortable.

Companies can be creative with how they offer access to education benefits. These learning and development opportunities can include programs such as tuition reimbursement, continuing education content that’s provided at no cost to the employee, and other avenues of training. Learning and development benefits can be effective for employers as it can increase the skills and capabilities of the company’s workforce. And employees appreciate the ability to learn new skills and potentially grow into new roles: according to LinkedIn’s 2024 Workplace Learning Report, 8 in 10 people say learning adds purpose to their work.

Each type of benefit should be carefully evaluated as a company builds out its benefits offerings. That way, companies can ensure that their offers align with employee goals and expectations. Companies can offer a variety of popular benefits, including these 5 types of employee benefits:

Health insurance coverage. Health insurance helps employees and their families manage medical expenses in case of illness or unexpected injury. Policies can extend to dental, vision, and other types of care. Since health insurance is typically provided by one’s employer in the U.S., many employees expect this coverage, particularly if they work full-time. Also, health insurance may provide preventive care through regular check-ups, screenings, and wellness programs, all of which can support a healthier lifestyle.

Life insurance policies. Offering life insurance allows employees to plan for long-term financial security and provide for loved ones. A standard life insurance policy may cover one year’s salary, though employees can opt for more coverage at an additional cost. As with other benefit elections, employees should carefully consider their options, do independent research, and consult with family members.

Retirement savings accounts. Access to 401(k) plans and other retirement savings options is a common and valued benefit because it helps employees plan for their future after their career. These plans can also provide peace of mind that their current job will support their eventual retirement. Contributions to traditional 401(k) accounts are usually made with pre-tax dollars, which offers tax advantages. Employer matching contributions, which are typically a percentage of the employee's contributions, further enhance the overall savings potential, especially when combined with compound growth. 

Paid time off (PTO) and paid sick leave. PTO covers various types of leave, such as vacation, mental health days, and sick leave for employees or their families. This benefit ensures employees continue to receive income while focusing on personal matters. PTO also helps employees achieve a healthier work-life balance by allowing them time to rest and recharge, which can reduce burnout and boost overall employee well-being. For employees with several dependents (children at home, aging parents, etc.), the ability to take paid time off can be especially helpful.

Career development opportunities. Employers can offer training and development programs, including workshops, courses, and online learning platforms. These opportunities and more can help employees grow their skills. Mentorship programs also fall into this category. They can connect employees with more experienced colleagues, providing guidance, institutional knowledge, and career support. Career pathing is another valuable tool, offering employees a structured approach to growth within the company.

Many employees want to feel supported by their employer. They also want to save money for the future and enjoy a lifestyle that includes travel, paid time off, and resources that benefit their physical and mental health.

To better provide this support, employers should ask: what is a good benefits package? That way, they can tailor their offerings to the wants and needs of their team members and maximize their benefits’ effectiveness.

According to Forbes.com, the top 3 most attractive employee benefits are employer-covered healthcare, life insurance, and pension and retirement plans. Their popularity is stated as follows:

Employer-covered healthcare. 67% of employees and 68% of employers believe this to be the most important benefit.

Life insurance. 45% of employees and 43% of employers named this a top benefit.

Pension and retirement plans. 34% of employees and 34% of employers agree that planning for the future is vital.

Beyond salary, the best employee benefits can be the ones that provide employees with non-financial support. Think of it as giving employees other valuable resources: time and assistance with other aspects of their lives. From onsite health services (e.g., flu shot clinics offered in workplace buildings) to access to gyms/spaces to onsite daycare, these kinds of benefits help employees take care of necessary tasks outside of work and near their workplace, saving them time and energy during a busy work week. As with other types of benefits, these can help support a more satisfying work-life balance and also overall health.

Offering benefits is also important because it can communicate to employees that their employer values and support them. It sends a message that leadership understands that workers have other priorities in their lives; benefits provide employees with assistance in taking care of those other priorities.

Conclusion

It’s important to consider the role that offering benefits can play in supporting your employees. This includes education benefits and how they can round out your overall benefits package. Platforms like Workforce Edge also can make it easier for employees to use their education benefits and pursue education: 61% of Workforce Edge users surveyed agree that Workforce Edge helped them go back to school by taking advantage of their education benefits.*
_{*Source: Workforce Edge User Survey, 2024}

Workforce Edge streamlines the process for both employees and HR staff managing an education benefits program. To see how it can help your organization, schedule a consultation and connect with our team.