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Employee benefits have evolved into a necessary component of any competitive compensation package. From legally mandated insurance to free snacks, benefits and perks can significantly attract and retain talent.
Employee benefits are tangible or intangible compensation in addition to their base wages or salaries.
The definition of employee benefits includes job benefits, such as health and dental insurance, stock options, and cell phone plans. However, employee benefits can range from training opportunities to startup perks (let’s not forget the infamous ping-pong tables).
Generally, any non-wage gain associated with an employee’s position can be classified as an employee benefit, whether mandatory or voluntary, provided by an employer.
There are types of benefits that are most commonly met in companies across countries. When thinking of benefits, many people mention health insurance, life insurance, disability insurance, and retirement plans as examples of these benefits. Other benefits can be in the form of additional compensation or time off.
Health insurance (dental, medical, and vision), life insurance, and disability insurance are all included in this category. Many countries require employers to provide health insurance or some form of medical plan, and employers frequently supplement publicly available medical care. However, to provide better options to their employees, many businesses elect for a private group or individual insurance.
Life insurance demonstrates that the company is concerned not only with the employee but also with their family. If an employee dies, their family will receive a lump sum to cover the funeral and other related expenses or their cost of living for a specified period.
Employees who receive retirement benefits feel more secure about their future. In the United States, for example, a common benefit is a pension plan, in which both the company and the employee make regular defined contributions to the employee’s account.
The pension plan is a defined contribution plan in which employees are not guaranteed a specific benefit upon retirement. This is due to the fact that if investments fail, the money invested in the account may be lost.
This segment covers any money given to employees in addition to their regular salary. Bonuses, commissions, awards, and gifts are examples of direct compensation, as are stock option plans and profit-sharing.
Benefit packages consume a significant amount of time for many HR professionals. And for a good reason: they are one of the most fundamental employee engagement and retention strategies, as well as a source of talent attraction.
Benefits are also among the top motivators candidates look for in job ads, with 63% of job seekers polled saying they pay attention to what benefits a company provides. This means that including benefits in your job ads and careers page is an important part of your employer branding efforts.
Aside from the major categories, there are a variety of other types of benefits that are frequently included in company benefit plans.
Are you looking for an Employee Benefits Plan for your organization in Strathroy, ON? We at Kulla Financial are happy to assist you with deciding which group benefits plan is right for you. We also offer financial planning and other services.