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 are HR 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 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 questions should I ask in a benefits survey? ›
- How satisfied are you with your current PTO amount?
- Are you currently enrolled in our health plan coverage?
- Are you satisfied with the health plan coverage we offer?
- Do you feel the maximum deductible is too high?
- Are you satisfied with your health plan provider options?
- 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 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.How many types of employee benefits are there? ›
The most common employee benefit plans include life insurance, health insurance, disability insurance, and retirement.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.
Paid time off, flexibility/remote working options and paid family leave are the top non-insurance benefits employees want, according to a new survey of 1,500 U.S. workers by benefits provider Unum.What are the 4 mandatory benefits for an employee? ›
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 four major benefits? ›
There are four major types of employee benefits many employers offer: medical insurance, life insurance, disability insurance, and retirement plans.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 the best benefits to ask for? ›
- Paid time off. ...
- Flexible work hours. ...
- Remote work. ...
- Sponsorship or mentorship programs. ...
- Learning opportunities. ...
- Tuition reimbursement. ...
- Paid parental leave. ...
- Adoption assistance.
- Health Insurance.
- Life Insurance.
- Short-Term and Long-Term Disability.
- Retirement Plans.
An employee survey can identify the most pertinent areas of improvement for human resource or leadership teams to focus on. This vital benefit identifies those core areas and factors which are important to employees but also the ones they are less than satisfied with.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 example employee benefits? ›
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. Many of the benefits employers provide are only available for full-time employees.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 7 types of employees? ›
- Fixed term.
- Daily hire and weekly hire.
- Apprentices and trainees.
- Full-time. Full-time employees work for a specified number of hours every week and are typically paid on a salary basis that does not change. ...
- Part-time. ...
- Contract. ...
- Independent contractor. ...
- Temporary. ...
- On-call. ...
What benefits are employees looking for in 2022? ›
According to MetLife, 55% of employees cite health and wellness programs (such as access to fitness facilities, gym memberships, medical screenings, etc.) as a necessity for accepting a new position in 2022, which has more than doubled from pre-pandemic expectations.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 in HRM? ›
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 quiet quitting means? ›
In short, quiet quitting has been popularized recently with employees that are just at a job for the paycheck and aren't really emotionally or intellectually engaged. It's about doing the bare minimum, and not going “above and beyond”. However, some are not so convinced that the trend even exists.What is the number one thing employees want? ›
Sixty-four percent of workers rated an increase in income or benefits as “very important” when vetting a company. Employees want to do good work and get paid fairly for it. As employees acquire more skills and hit additional milestones, rewarding them with higher pay shows that you appreciate and value their work.What is the HR focus for 2023? ›
The top 5 priorities for HR in 2023
HR leaders must manage investments in people and technology, cultivate a positive culture and employee experience, and transform HR to be more automated and digital — all while new employee expectations are impacting retention and attraction.
Handle Employee Benefits
Employee benefits are another important responsibility of the HR department. This includes things like health insurance, retirement plans, and vacation days. The Human Resources Department works with benefit providers to set up these programs.
Compensation and benefits are two important aspects of human resources. 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 is the best benefit for employee? ›
One of the best ways to improve your employees' work-life balance, mental health, and quality of life is by giving them paid time off. This should include sick leave, vacation time, personal days, or inner work days.In what way might an HR manager be involved in employee benefits? ›
The bottom line – Human resource managers are often put in charge of employee compensation and benefits. Proper leadership within the HR department will involve negotiating insurance plans, making sure payments go out on time, and improving and developing employee benefits packages.
What are employees benefits examples? ›
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.How do I ask HR about benefits? ›
- Does the company offer health insurance?
- Will it cover members or my family as well as myself? ...
- How much of the premium costs do I have to pay for myself? ...
- Can I choose different levels of coverage? ...
- What kind of coverage is there for dental, vision and disability insurance?
Employee benefits are more important than salary, because they provide better experience for employees and increase satisfaction. While salary is important, other forms of compensation, whether they be benefits or unique perks, can often be even more effective to recruit and retain talent.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).
Popular employee benefits in the U.S. include: long term/short term disability insurance, health insurance, life insurance, dental insurance, vision insurance, paid parental leave, commuting/travel assistance and gym/wellness benefits.