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What do you think of when employee benefits programs are mentioned? Traditional offerings like health insurance and retirement plans are likely the first things that come to mind. Organizations often fail to go beyond these standard benefits, and if they do, it’s with a few additions that are seldom improved and selected without much thought.
Today’s workforce is experiencing a new level of empowerment, and that comes with high expectations that potential employers need to meet. Building a great benefits program helps your company attract and retain the best talent possible, keeping team members engaged and happy. Create an impactful employee benefits program, regardless of your organization size or budget, with the help of these six simple steps below.
What are employee benefits?
Employee benefits are non-salary compensation and perks, also known as mandatory or statutory benefits. Employers are required by law to provide these benefits to their employees, and vary depending on location, but typically include:
- Health insurance
- Worker’s compensation
- Unemployment insurance
- Family and medical leave
- Overtime pay
While health insurance, and family and medical leave, are not required for all organizations, some states have mandated disability insurance and retirement plan requirements.
What are benefits that are voluntary?
Also known as supplemental employee benefits, these are benefits that an employer voluntarily offers employees, covering any perk offered to employees that is not mandated by law.
While the list of benefits in this category began with perks such as dental insurance and life insurance options, today, the list of voluntary benefits has grown significantly to include:
- Rewards programs, with the ability to earn and redeem points
- Unlimited paid time off
- Flexible work schedules, such as four-day work weeks
- Wellness programs, such as discounts on gym memberships
- Budget for setting up a home office, such as buying a desk or external monitor
Why are employee benefits important?
Employers use benefits to attract top talent, especially in a tight labor market, and to retain employees once hired. They enable smaller companies to compete with larger organizations that may pay higher salaries, and benefits can act as employee engagement tools and support a positive corporate culture.
Millennials influence the types of benefits available in the workplace, and for good reason, as the U.S. Bureau of Labor Statistics reports that the Millennial cohort is set to outnumber other age groups in the workforce by 2029.
According to insights from Great Place to Work, finding a sense of meaning and purpose is a key driver to retaining the Millennial cohort, along with these four key areas:
- Profit-sharing model
- Fair compensation package
- Clear guidance and expectations
- Benefits related to work-life balance
Benefits are also essential to employee morale, satisfaction, health and well-being and help organizations maintain a competitive edge against other companies.
What are the steps to creating an employee benefits program?
1. Discover what your employees want in a benefits program
The first step to creating a benefits program for your organization is determining what your employees value. Research by Gallup reveals that in a new role, 64% of employees would be looking for an increase in pay and benefits while 61% value work-life balance and prioritizing their personal wellbeing.
Every team is unique, though, and no amount of research can compare to simply asking your employees what benefits they prefer. Surveys and questionnaires are one way to gather this feedback, along with an employee engagement solution, where your employees can communicate which benefits they’d like, and what they could do without.
2. Decide on the goals of your organization’s employee benefits program
Is your organization looking to lift morale and reduce turnover? Or maybe its major priority is attracting young talent with the right skills.
Here are just a few goals that your organization might set for its program:
- Attracting higher quality candidates
- Decreasing turnover
- Increasing productivity
- Improving morale
- Boosting employee engagement
- Increasing work-life balance
- Incentivizing desired behaviors
Identifying the objectives of a benefits program in advance ensures that your company is making the most of its available budget and allows it to measure progress with tangible key performance indicators (KPIs).
3. Offer great rewards as a benefit
If your organization wants to provide benefits that employees truly appreciate in a way that fits any budget, consider implementing a recognition and rewards program with a centralized recognition platform that supports points-based rewards. Your company awards each employee a certain amount of points each month, and employees can give those points to other team members when they provide social recognition.
Team members can then watch their points increase and redeem them for things and experiences they find meaningful from a built-in rewards catalog. This system offers the flexibility to match your organization’s budget, boosts the impact of social recognition, and offers a way to personalize benefits for every employee.
4. Design your employee benefits program
Now that you understand what team members want, your company’s big-picture goals, and the advantages of a points-based reward system, it’s time to prioritize and select the benefits to include in your program.
Here are some steps to take when designing your employee benefits program:
1. Start with the must-haves: Gather all the information your organization needs to comply with applicable legal requirements.
2. Consider mandated benefits: They may include leave time for caring for family or personal medical purposes, worker’s compensation, as well as health, disability, and unemployment insurance.
3. Consider the size of your business: It’s one of the many variables to consider when determining whether the relevant regulations apply to your business.
4. Evaluate your organization’s budget: Once you’ve taken care of the essentials, evaluate your budget and choose benefits that fit within it and align with your organization’s goals.
5. Consider voluntary benefits: A points-based reward system can be a great incentive, as are benefits focused on promoting wellness. Additional flexibility in when and where employees work, along with family-friendly leave policies, can have a big impact at a low cost.
6. Support professional development: Offering benefits such as tuition reimbursement and online learning programs, is another way to show employees your organization is invested in their success.
5. Communicate your benefits to employees
Effectively communicating your organization’s benefits is crucial, as even the best benefits won’t have any impact if employees aren’t aware of or excited to use them. Clearly explain the benefits available, such as 401k matches or paid time off calculations, considering their complexity, and offer extra guidance as needed.
Another way to communicate effectively is to frame benefits within total compensation to highlight their value. For instance, an employee with a $50,000 salary and a $15,000 benefits package has a total compensation of $65,000. Since the $15,000 is non-taxable, that makes these benefits even more valuable, and this clarity will help employees understand the true value of their benefits.
6. Keep soliciting feedback and improve your employee benefits program
Developing an employee benefits program is not a one-and-done proposition. Your organization should revisit the benefits it offers frequently, with updates driven by both external and internal factors. Also, by encouraging organizational transparency by collecting and implementing feedback on your company’s benefits program, it helps guide its evolution and improve organizational culture.
Establishing formal channels for anonymous feedback with tools such as pulse surveys and chatbots reduces the chance of bias and ensures your company gets the honest input it needs to make the right changes. Using an employee engagement platform and its built-in reporting capabilities, your company can discover insights on everything from costly benefits that employees aren’t really interested in, to new benefits like hybrid work arrangements that employees are looking for.
Employee benefits you should include in your program
Employee recognition
Recognition can include manager-to-employee, peer-to-peer, social, monetary, and any other form that has meaning to employees and the organization. This benefit tops the list because of the high value that employee recognition brings to any organization.
The ideal way to experience the maximum benefits of employee recognition is based on two principles:
- Recognition should be an everyday event and not an occasional award
- Recognition should be given in real-time and in a variety of forms
Creating a culture of recognition is an ideal strategy for establishing your organization’s community atmosphere. In fact, according to an Achievers report, 91% of employees agreed a strong recognition culture makes a company attractive to work for.
Employee rewards
The days of giving employees an annual ham and a handshake are long gone. Just like recognition has meaning, so should rewards—and the most effective reward system lets employees choose their reward.
For example, employees can earn points for great work and then redeem those points for a reward of their choosing from a rewards marketplace. The rewards offered can include anything from gift cards, travel savings, charitable contributions, the latest tech item, and trendy fashion apparel.
Some organizations develop a unique reward system to include rewards based on what employees’ value and are motivated by, such as a day off to perform charity work or to attend a child’s out-of-town athletic event.
Wellness programs
According to the 2024 SHRM employee benefits survey, organizations that adapt their total benefits and compensation packages with up-to-date and creative offerings are better positioned to retain and attract talent.
The survey shows that 70% of employers believe in the utmost importance of “flexible working benefits,” while 48% prioritize wellness programs as a part of their benefits package.
For example, wellness program features may include:
- Management of chronic health conditions
- Fitness challenges and health monitoring programs
- Yoga classes for stress reduction
- Nutrition workshops or healthy snacks in office
Family-friendly leave benefits
Family-friendly leave benefits are an essential part of a supportive workplace culture, as it promotes work-life balance and shows that an organization cares about the life that employees lead outside of the workplace. According to Deloitte Global’s 2024 Gen-Z and Millennial Survey, work-life balance is a “top consideration” for respondents when choosing a company to work with.
Family-friendly leave benefits typically include parental leave, adoption leave, and sometimes even days off to care for sick family members.
On the organization’s side, benefits to offering family-friendly leave include:
- Demonstrating a commitment to employee well-being, and allowing individuals to nurture their families without compromising their careers
- Contributing to a more inclusive and compassionate work environment where employees feel valued beyond their professional contributions
- Being able to attract and retain employees
Flexible work schedules
Flexible work schedules allow employees to spend more time with family and friends, reducing stress and improving wellbeing as they’ll be able to prioritize exercise and healthy eating.
Flexible work schedules typically include:
- Hybrid work arrangements
- Fully remote work arrangements
- Four-day work weeks
- Flexible work hours
The importance of flexible work schedules is exemplified in research from Gallup, where nine in 10 employees that are able to do their job remotely, report that they prefer a certain level of remote working flexibility. What’s more, is that while 53% have expectations of a hybrid work arrangement, 24% want to be fully remote.
As hybrid or fully remote work environments are core to company culture and employee job satisfaction, organizations should take this into consideration when developing flexible work schedules as a part of their benefits package.
Employee assistance programs
The Employee Assistance Program (EAP) is a safety net and work-based intervention program for employees dealing with personal or work issues that cause stress or anxiety.
According to a 2023 survey from the American Psychological Association, 77% of employees have reported feeling work-related stress, while 57% say that they’re experiencing symptoms of workplace burnout.
People don’t leave their personal selves at the door when they show up for work. The EAP offers employees resources that help them navigate life issues that may impact their ability to remain productive, like counselors specializing in mental health, substance abuse, financial difficulties, managing work changes, and family conflicts.
Career development opportunities
Deloitte’s annual Gen Z and Millennial survey reveals that lack of career development opportunities in a role may motivate employees to job hunt. In fact, 16% of Gen Zs and 22% of Millennials say that they left their previous role due to lack of career advancement.
According to Forbes, there’s also a disparity between employer and employee opinions on the career development opportunities that are available, highlighting the need for better professional growth programs.
On one hand, 61% of employers say that their organization offers internal mobility opportunities, however just 36% of employees agree. In the same vein, 90% of employers believe that their organization provides employees with opportunities for career development, but only 69% of employees agree.
Transparency and feedback
Implementing an employee feedback system is key to encouraging transparency in the workplace. A formal feedback process gives everyone an equal voice, reducing the biases found in one-on-one annual performance reviews.
Some benefits of an employee feedback system are:
- Clear and consistent feedback channels
- Boosting engagement by showing employees their opinions matter
- Keeping employees aligned with organizational objectives and goals
- Fostering a culture of continuous improvement
- Promoting transparency in both communication and decision-making
Ongoing feedback builds trust among employees, and between employees and their managers. The most effective feedback tools enable managers to continually listen to employees, take action, and impact engagement right away.
Perks, perks, and more perks
One of the advantages of a benefits program is that employers can customize the offerings to fit the needs of their employees. Some companies offer to reimburse employees for student loans or tuition expenses, while providing access to affordable daycare is growing in popularity. Employers are offering reimbursement for a percentage of daycare expenses or signing contracts with a nearby daycare to provide reduced cost services to employees.
When it comes to perks, the sky’s the limit. Consider “bring your pet to work” days, offering yoga classes, and creating quiet space for focused work.
Incorporating rewards into your employee benefits program
Beyond basic healthcare offerings, modern employee benefits programs are critical engagement tools. Your benefits program can make your team feel cared for, recognized, and motivated — with the right tools in place.
The Achievers Experience Platform combines the recognition and listening capabilities needed to lift your benefits program to new heights. It’s powered by Achievers Recognize, a science-driven employee recognition platform that makes it easy to incorporate meaningful rewards into your benefits program. With a wide variety of options available in the Achievers Reward Marketplace, your hardworking team will be able to redeem their points for something meaningful to them.
Recognize integrates with Achievers Listen, an employee engagement solution that helps your organization keep tabs on employee sentiments. It features pulse surveys, lifecycle surveys, and a feedback channel that leverages single-click polls and follow-up questions to gauge how employees feel about their benefits. Achievers Listen makes taking action on feedback quick and easy with anonymized reports and guidance on how managers can form collaborative responses with their teams.
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