Top 10 Employee Benefits for an Engaged Workforce

Your 401(k) and health insurance plan are great, but job seekers already expect them.

Benefits that show you're invested in their growth, well-being, and life outside the office can help differentiate your organization.

This article shows you 10 types of employee benefits that make your company stand out.

Table Stakes for Employee Benefits Packages

Before diving into the voluntary benefits that can set you apart, let's cover the basics. We call these “table stakes” benefits because they're expected—employers who don't offer them may not even make it to the hiring table.

To the modern employee, the following are the bare minimum for an employee benefits package:

  • Medical insurance
  • Paid time off (PTO)
  • Retirement benefits (e.g., 401(k), 403(b), Roth IRA)
  • Family and medical leave
  • Maternity and paternity leave
  • Opt-in flexible spending account (FSA)
  • Opt-in health savings account (HSA)
  • Short-term disability insurance
  • Unemployment insurance benefits
  • Life insurance
  • Dental insurance
  • Vision insurance
  • Workers' compensation insurance
  • Medicare and social security contributions

Some of these—like health insurance and medical leave—are legally required benefits. PTO, retirement plans, and other types of insurance aren't required, but the best employees won't even look at a job offer without them.

The "Must-Haves" According to Employees

MetLife's 2022 Employee Benefit Trends Study examined the changes in employee expectations when evaluating a benefits package since the pandemic.

In addition to the standard benefits mentioned above, employees increasingly want:

  • Health and wellness programs
  • Flexible working arrangements
  • Policies that limit employees' working hours
  • Work-life balance recognition
  • Diversity, equity, and inclusion (DEI) initiatives
  • Development, training, and advancement opportunities

Interestingly, there's a disconnect between what employers think employees need and what they actually want. Although employers now offer more benefits than ever, they're missing the mark on what matters most to employees.

10 Employee Benefits to Make Your Package Stand Out

Half your employees are still free agents. According to the University of Phoenix's 2023 Career Optimism Index, 53% of Americans are looking for a new job or plan to in the next six months. 4 out of 5 say they're hopeful about their careers, but the message is clear: this hope is rooted in their own sense of ambition, not in loyalty to their existing employer.

To attract and retain employees, companies need to invest in the fringe benefits that help them flourish in their careers and personal lives—not just transactional "perks" that tick the boxes.

1. Flexible Working Arrangements

Flexibility is at the top of every employee's list—a new McKinsey survey found that 87% of workers want some sort of a flexible work environment. This could mean several things:

  • Flexible hours
  • A hybrid work model (i.e., part in-office, part at home)
  • A compressed workweek
  • A work-from-home model
  • Complete freedom of location (a work-from-anywhere model)

Some criticize remote work in its entirety (most publicly, Elon Musk), but the reality is this employee benefit isn't going anywhere. And it shouldn't.

A Stanford study involving 16,000 workers found those working at home to be 13% more productive, and those who have the freedom to show significantly higher levels of job satisfaction.

How exactly you define "flexible working arrangements" will depend completely on your organization's dynamics. Some companies let their full-time employees work from anywhere they want, for instance—something that isn't possible in highly-regulated industries like finance.

2. Paid Family, Medical, and Parental Leave

Although family and medical leave are legally required benefits per the Family and Medical Leave Act (FMLA), paid family and medical leave aren't. According to the Bureau of Labor Statistics, 23% of private sector workers don't have access to paid sick leave and just 23% enjoy paid family leave as an employee benefit.

This puts employees who get sick or have to take care of a loved one in a tough position. They need to choose between taking unpaid time off and their paycheck—an impossible choice for many families and one that 44% don't end up taking.

Like family and medical leave, paid parental leave isn't required. It's among the most important child care benefits, but a relatively small amount of employees have access to it.

It might not be as important as other fringe benefits to your younger workforce. But to your employees in their late 20s, 30s, and 40s (which likely includes some or all of your leadership and exec teams), it's a deal breaker.

Affording employees the time to bond with their new child and adjust to their parenting lifestyle goes beyond providing financial support. It's a sign your company cares about their personal lives and values them as individuals.

3. Mental Health Services

The conversation around employee mental health has gained considerable traction, but that doesn't change the fact that work is a significant source of stress for many people. Gallup research examining the economic cost of poor employee mental health reveals that work has a somewhat or extremely negative impact on the mental health of 40% of the U.S. workforce.

Broken down by age group, it's clear the data skews toward Millennials and Gen Z (who will comprise the vast majority of the workforce by 2025).

There are several ways to support your team's mental health, including:

  • Counseling services and virtual therapy
  • Wellness programs (e.g., meditation, yoga, stretching)
  • Employee discounts for off-site programs
  • Mental health and meditation apps
  • Companywide "mental health" days

4. Student Loan and Tuition Assistance

More than 60% of new grads have student loan debt, which completely changes the equation when it comes to evaluating job offers. For those who aren't out of college yet, helping them pay for their tuition is a huge plus.

Employee assistance programs for tuition shouldn't just be for your corporate workforce, either. Companies like Chipotle and Starbucks have programs that prioritize tuition assistance for their hourly in-store employees.

Tuition assistance isn't just good for employees—it's great for businesses. Offering tuition reimbursement and student loan repayment assistance help you attract and retain employees, which dramatically cuts recruitment costs.

5. Health and Wellness Benefits

A healthy workforce is a more productive one, which is why the most competitive companies are going beyond standard health benefits to improve employee morale.

The best way to manage these employee benefits is to offer a health and wellness stipend, which is a sum of money employees can use to design their own health and wellness program.

For example, Webflow offers its employees $200 per month (through Compt) to spend on health and wellness activities like gym memberships, fitness classes, mindfulness and meditation apps, and anything else they need to stay health.

6. Career Development and Training

Whether they stay with your company forever or move on to the next in a few years, your mindset toward your employees should be the same: How can I help them grow?

More than half of Americans say they don't have a mentor, and 46% say they don't even have one advocate for their professional development, according to the previously-mentioned Career Optimism Index.

Investing in their career development drives employee satisfaction and loyalty and makes you more appealing to the best job candidates.

Employee benefits for career development could include:

  • A mentorship or coaching program
  • Developing employees' soft skills
  • Reimbursement for online courses and certifications
  • Access to professional development platforms (e.g., Udemy)
  • Incentives for attending conferences and workshops

7. Company Equity and Profit Sharing

Stock options are usually a critical element of total comp for higher-earning employees who can convert them into six- or seven-figure payouts (some of which exceed their salaries).

Since they're based on employee retention and have a higher impact at scale, they aren't usually the focal point of an entry-level employee's compensation package. But many executives, company leaders, and employees in roles with high earnings potential like sales and software development see equity as an essential employee benefit. Especially in cases where the company is steadily growing or preparing for an IPO, the benefits of stock options are almost unlimited.

Profit sharing is another powerful incentive, particularly for managers and employees who don't get their salaries in stock. Offering them a reward (like a cash bonus) proportional to your company's performance creates alignment and reinforces the idea that they're part of something bigger than themselves.

8. Unlimited PTO

Unlimited PTO is among the emerging work-life balance benefits that are becoming more commonplace in companies of all sizes.

Its premise is simple: Employees take as much time off as they need, whenever they need.

It reduces human resource management costs associated with PTO tracking and approval, but it requires the right environment to be successful.

According to a report by the Society of Human Resource Management (SHRM), the "cap" on unlimited PTO is between three and six weeks, which is considerably more PTO than average. That same report, however, found employees to be far less likely to take time off when it's unlimited.

If HR leaders want unlimited PTO to play out in the office like it does in their heads, they need to encourage their employees to actually use it.

The best way to do this is to offer an employee travel stipend—i.e., a budget that's set aside specifically for employees to use on vacation. That way, they're more likely to actually take paid time off and enjoy it guilt-free.

9. Subsidized Commuter Benefits

There's no feeling quite like filling up gas, looking at the price, sheepishly preparing to swipe your credit card, and standing there in disbelief.

The average commuter drives 41 miles per day. Statistically, they get to feel this at least once per week.

If you can't offer your employees flexible working options or a work-from-home policy, you can at least make their commute more affordable.

The most common commuter benefits include:

  • Carpooling subsidies
  • Company vehicles
  • Ride-sharing subsidies (e.g., Uber, Lyft)
  • Gas stipends
  • Public transit passes and reimbursement
  • Maintenance reimbursement
  • Parking reimbursement
  • Electric vehicle charging stations
  • Bicycle parking facilities

These fringe benefits are tax deductible—as of 2023, employers can set aside up to $300 per month to cover their employees' commuting expenses.

10. Lifestyle Spending Account (LSA)

A lifestyle spending account is by far the best way to give employees control over their fringe benefits.

Think of it like an allowance—employees get a certain amount of money every month (or year) to use on whatever they want. Plus, HR won't have to deal with the administrative headache of managing multiple employee benefits.

Employees can use their LSA on any number of things:

  • Gym memberships and personal training
  • Home gym equipment
  • Therapy and counseling services
  • Childcare expenses
  • Meals and food
  • Pet care expenses
  • Commuting
  • Family activities

LSAs help your employees use company benefits on their terms, which translates to happier, more engaged, and higher-performing employees who stick around.

How can small businesses compete?

Whenever you read an article about the companies with the best employee benefits, it's enterprises topping the charts—Spotify, Apple, HubSpot, Google, and so on.

Offering a competitive employee benefits package might seem difficult for smaller companies, many of which don't have the means to provide certain benefits. Still, there are plenty of ways to get the most out of your benefits budget:

  • Negotiate with vendors. Many employee perks vendors will offer discounts for companies with fewer than 25 employees.
  • Talk to your employees. Ask your team what types of employee benefits would be most helpful, and use that feedback to design a custom package tailored to their needs.
  • Evaluate benefit costs. Some high-impact benefits (like unlimited PTO) cost very little to implement.
  • Use an LSA. LSAs give employees control over their own benefits, so they can choose what's right for them.

Offer the Right Benefits Package With Compt

No matter your company's size or vertical, you need to offer competitive employee benefits if you want to attract and retain talented employees.

Compt is an all-inclusive, 100% tax-compliant employee perks platform that helps you design, manage, and deliver a comprehensive benefits package.

With Compt, you can manage stipends whether your team is remote, hybrid, in-office, or international.

Click here to see how we can help.

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