Employee Benefits Overview

Employee benefits are part of strategic initiatives used to attract and retain key employees. Benefits vary greatly by organization and can be as simple as health insurance and as complex as flexible work schedules or on-campus day care. Benefit packages come in many shapes and sizes, depending on the industry and the size of the organization. The larger the organization, the more expanded and diverse the benefits become. Smaller organizations often lack the resources to offer expanded benefits and the manpower to administer them. All employee benefit packages require a designated human resource generalist to administer them and maintain employee file records. More often than not, employees participate in funding a portion of insurance premiums. The percent of employee cost participation varies by organization. It is rare for employers to pay 100% of insurance premiums although it does happen.

Some examples of employee benefits:

• Paid time off
• Vacation time
• Sick paid leave
• Holidays
• Birthday holiday
• Personal day
• Jury duty
• Military service
• Insurance
  • Health
  • Dental
  • Disability
  • Life
• Tuition reimbursement
• Tuition reimbursement for children
• Matching retirement contributions
• Discounts on area attractions
• Employee assistance programs
• Health and wellness programs
• Discounts to workout facilities
• Discounts on business products and services
• Flexible work schedules
• On-site day care
• Bring your pet to work
• Dry cleaning services

Things to remember when creating an employee benefit package:

• Cost of benefits should be considered part of a comprehensive compensation package and total value of package should be presented to job candidate at the time of offer.
• Benefits typically increase with the employee’s level of responsibility i.e.; managers receive better benefits than staff employees; directors receive more benefits than managers; and vice presidents and CEO/CFOs often have a completely different level of benefits. This is typically not known by staff employees and considered confidential information.
• While good benefits attract employees, if benefits are too rich, they can retain employees who have the desire to move on but stay for the benefits. This creates a working staff of robotic employees who are only there for the benefits and aren’t there to further the vision or add value to the organization. This can result in an undercurrent of disgruntled employees who are frustrated that they want to leave but can’t because they need the benefits.

So how do you balance the two?

• Benchmarking other like organizations can be a big help in finding out what others offer their employees. A good rule of thumb is you want to have good benefits but maybe not the best amongst your peers. You also want to have the flexibility to flex benefits to be able to attract desired potential employee candidates.
• Use a strong performance management process to maintain top performance of employees.
• Use professional development programs to prepare employees for higher levels of responsibility.

Rewarding employees for their contributions to an organization is what benefits are all about. Creating a strong employee benefit package coupled with strong performance management can help organizations achieve their objectives and business goals.

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