✨ Don't miss out! Register for our Employee Appreciation Webinar scheduled for 29th February.🎖️
✨ Don't miss out! Register for our Employee Appreciation Webinar scheduled for 29th February.🎖️
Register now
Employee benefits are more than just perks—they’re a critical part of the employee experience. From health insurance and retirement plans to wellness support and paid leave, benefits help attract talent, boost morale, and drive retention.
This guide answers the most common questions around cost, value, communication, and how to build a competitive benefits package that employees actually care about.
Employee benefits are non-wage compensations provided to employees in addition to their regular salaries.
These can include health insurance, retirement plans, paid time off, wellness programs, and more. The goal is to enhance job satisfaction, improve employee well-being, and attract or retain top talent.
Employee benefit programs are organized systems or plans through which benefits are delivered.
Common programs include:
These programs may be managed internally or with the help of third-party providers.
Employee benefits are essential because they:
Without meaningful benefits, employees may feel undervalued—even if they receive competitive salaries.
Some employee benefits are taxable, while others are exempt:
Taxable benefits may include:
Non-taxable benefits (in most countries):
Always check with a tax advisor or local laws for accurate classification.
The cost of benefits per employee varies depending on the industry, location, and company size. On average:
Employers must consider both fixed and variable costs when budgeting for benefits.
To offer employee benefits, follow these steps:
These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).
Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.
eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.
The value of employee benefits depends on the mix of offerings and the employee’s usage. On average:
Providing meaningful, well-communicated benefits increases the perceived worth dramatically.
Employee benefits work by supplementing an employee’s salary with non-cash advantages that support their overall well-being.
To design a strong benefits program, employers should:
Regular reviews and feedback collection are key to ongoing success.
To build a competitive benefits package, consider the following:
Benchmark regularly to ensure your package remains attractive in the job market.
To calculate employee benefits, follow this process:
Example: If an employee earns $50,000 and receives $15,000 worth of benefits, then benefits = 30% of total compensation.
Effective communication of employee benefits is essential to ensure employees understand and value what is offered.
Best practices include:
Clear communication increases participation and satisfaction.
To improve employee benefits, employers should:
Even small updates can make a big impact when aligned with employee needs.
To calculate benefit cost per employee:
Formula: Benefit Cost per Employee = Total Benefit Expenses / Number of Employees
Tracking this metric helps in budgeting and comparing value across departments or time periods.
To create an employee benefits package:
A well-crafted package supports retention, performance, and organizational culture.
Hype Cycle for HR Technology, 2023
Hype Cycle for Hybrid Work, 2023
Market Guide for Voice of the Employee Solutions™ 2023
Innovation Insight: Digital Technologies Driving DEI Outcomes 2023
Forrester Employee Recognition Landscape, Q1 2023
Everest Group R&R Solutions PEAK Matrix® Assessment 2023
