Simply put, employee benefits are any form of compensation paid to employees over and above regular salary or wages. Employee benefits come in many forms and are an important part of the overall compensation package offered to employees. Last week we provided an in-depth look at the definition of employee benefits. In this article, we’ll outline common examples of small business employee benefits.
Employee Benefit Examples
Here is a list of popular employee benefits in the U.S.:
- Paid time off such as PTO, sick days, and vacation days
- Health insurance
- Life insurance
- Dental insurance
- Vision insurance
- Retirement benefits or accounts
- Healthcare spending or reimbursement accounts, such as HSAs, FSAs, HRPs, and HRAs
- Long term disability insurance
- Short term disability insurance
- Tuition reimbursement
- Childcare benefits
- Gym memberships or discounts
- Wellness programs
- Relocation assistance
- Commuting/travel assistance
- Telecommuting options
- Workplace perks such as recreation activities, food and coffee, and flexible work schedules
For small and medium-sized employers with lean operating budgets, some of these examples may seem unaffordable. Before you dismiss offering health or retirement benefits because of cost, however, consider different benefits structures and contribution strategies which help control cost. We’ll cover this next.
Example Employee Benefits Structures
In general, companies have two different ways to structure, contribute, and offer employee benefits:
1) Organizational-oriented benefits: Offer employees a specific or defined benefit. Benefits are employer-owned and employer-selected. Examples include a traditional health insurance policy, retirement pension or 401(k), or formal wellness program.
2) Consumer-oriented benefits: Offer employees employer-funded dollars to customize their benefits using technology. Benefits are employer-funded and employee-selected. Examples include defined contribution healthcare, defined contribution retirement plan, or allowances for wellness activities.
For a closer look at how these two strategies compare, here is a helpful chart.
Examples are a helpful way to learn about employee benefits options - especially for employers on a small business budget. Organizational-oriented benefits have historically been the way to offer benefits, however many employers are turning to consumer-oriented benefits to better meet the expectations of employees and to more effectively control cost.
What questions do you have about employee benefits? Which examples would you add to our list? Leave a comment or question below.