What Is the Purpose of Employer-Provided Benefits?

The objective of a benefits program is to help employees achieve their goals. This can include financial goals like saving for retirement or long term goals like using education benefits to gain new skills and capabilities. No matter the size of a company, when HR leaders strategize employee benefits for small business or larger businesses, it’s important to keep the employees’ needs in mind.

Benefits can also encourage a sense of belonging at one’s company. For example, according to a 2024 Workforce Edge Learner Survey of employees who use the platform to access their education benefits, 89% of Workforce Edge users report their general level of engagement at their current job as very or fairly engaged. 

Employer benefit expenses are those that are incurred as part of offering benefits. This can include fees a company pays to provide benefits, expenses incurred to promote the existence of the benefits to employees, the dollar amount a company contributes to an employee’s 401(k) savings plan or life insurance policies, or other types of expenses related to benefits.

Employer benefit expenses are part of a company’s total compensation costs and can be used to attract and retain skilled workers. These expenses are geared toward contributing to employee well-being, which can, in turn, enhance productivity and job satisfaction. They are typically factored into a company’s budget and reported as part of operating expenses on financial statements.

What are the most expensive employee benefits?

During the benefits administration process, HR leaders often analyze how expensive benefits might be for the organization at large. Some offerings are more expensive than others, while others carry relatively low costs.

For example, because of the nature of the healthcare system in the United States, offering health insurance is often one of the more expensive benefits for a company to offer.

The costs for other benefits, such as retirement savings plans, life insurance policies, commuter stipends, funds for home office equipment, onsite childcare, employee assistance programs, and more should all be factored in to an organization’s budget considerations.

Employee and employment benefits can have a large impact on productivity. It’s one of the reasons why the importance of employee benefits cannot be overstated and why HR leaders should be strategic when creating their approach to offering them.

Employee benefits can play a large role in influencing employee productivity by directly impacting job satisfaction, motivation, and overall well-being.

"When employees feel supported through benefits such as health insurance, retirement plans, paid leave, education benefits, and wellness programs, they often feel valued and engaged in their work."

For example, according to LinkedIn’s 2024 Workplace Learning Report, 8 in 10 people say learning adds purpose to their work. 

Benefits that address physical and mental health, like wellness programs and mental health support, can reduce stress and absenteeism, leading to more consistent attendance and higher energy levels. Furthermore, benefits such as professional development opportunities and performance incentives can encourage growth and reinforce a sense of achievement while often motivating employees to perform better. Overall, a comprehensive benefits package can help create a positive work environment that fosters loyalty and increases productivity by helping employees stay healthy, motivated, and focused on their goals.

The purpose of employer-provided benefits is to create a culture of support within a company. From health insurance and life insurance to paid time off, retirement savings, education benefits, and more, these benefits can give employees resources to help them thrive. Benefits can also support a satisfactory work-life balance and give employees a compelling reason to remain at one’s company.

Workforce Edge can help you manage and administer your education benefits program. If you’re interested in revamping your education benefits, changing the way you offer them, or exploring new ways to support your team with educational opportunities, Workforce Edge can assist you.