While work was primarily rewarded with salaries, the demand for employee benefits are growing more important over time
Job seekers are always looking for companies that best fits their career goals and offer the best employment packages.
But between employee benefits and salary, which one do candidates care about the most? Below, we weigh out what job seekers give more importance to and what employers can do with this information.
Salary and employee benefits
Salary is the regular payment employees receive from an employer for the work they do for the company. The fixed amount of money is primarily paid monthly, but there is an option for salary to be paid annually.
Meanwhile, employee benefits are types of compensations offered to employees on top of the salary and wages they receive. Common employee benefits include overtime pay, medical insurance, life insurance, vacation leaves, and profit sharing, and retirement benefits.
It is important to note that while the terms benefits and perks are used interchangeably, they mean different things. Benefits are the non-wage compensation offered to employees, while perks are extra rewards or incentives on top of salary and benefits. Companies usually provide Perks to provide a better working experience that is not necessarily in the form of compensation. Examples of perks are company-subsidized meals, employee discounts, and gym membership subscriptions.
Read more: Perkspot review shows what the employee reards tool is good for
Why companies offer benefits aside from salary
Although people continue to look for work that offers higher pay, companies that provide competitive benefits are getting a lot of attention from a vast talent pool.
There are many reasons why companies continue to offer better benefits – one of the most common ones is to increase job satisfaction. According to a study conducted by the Society for Human Resource Management (SHRM), 61% of employees claimed benefits boosted their job satisfaction. Providing employees with benefits that enable them to enjoy personal activities, build security for health, and save money for future goals can boost workplace morale, engagement, and productivity.
Job seekers are always looking for job offers that offer better pay and employee benefits. According to a Glassdoor survey, around 60% of respondents said they strongly consider the perks and benefits being offered before accepting a job offer. Offering competitive pay and employee benefits makes companies more appealing to candidates.
Benefits can also inspire loyalty within employees and help retain talent. Staff turnover can disrupt the workplace and be costly to recruit, hire, and train new hires. When companies offer an above-average employee benefits package on top of good pay, employees will be satisfied and most likely stay with their company instead of looking for other job offers.
Benefits can also inspire loyalty within employees and help retain talent. Staff turnover can disrupt the workplace and be costly to recruit, hire, and train new hires. When companies offer an above-average employee benefits package on top of good pay, employees will be satisfied and most likely stay with their company instead of looking for other job offers.
Read more: Top 50 companies with the best pay packages – according to employees
Salary vs employee benefits: what do employees prefer?
While work was primarily rewarded with salaries, the demand for employee benefits has grown exponentially. According to the Glassdoor survey, 80% of employees prefer additional benefits over a pay increase.
Employees are starting to prioritize the benefits they would receive from a company over salary because employee benefits provide better experience and helps increase their job satisfaction.
Top benefits employees want in 2021
Employee benefit wants constantly change over time depending on the needs, environment, and trends affecting employees’ lifestyles. For example, with the recent COVID-19 pandemic, many have shifted their priorities this 2021 to prepare for a new normal following the pandemic.
Listed below are the benefits employees consider essential.
- Health care benefits
According to the Robert Half Salary Guide research report, health insurance ranked as the top benefit job seekers look for. Health insurance mainly includes medical coverage for employees and their families. The coverage usually includes doctor and hospital visits, mental health support, and vision, dental and prescription drugs. The specific details and conditions of the health insurance will vary between companies.
With offices slowly opening and adjusting after strict lockdowns, COVID-19 vaccines, mandates and leaves provided by companies are something employees pay close attention to when discussing medical coverage benefits – especially if employees are requested to return to the office.
Offering a comprehensive health insurance plan is essential to having a great benefits package because it assures employees that they do not have to worry about certain costs. Additional coverage for families is also a bonus since it shows how the company values their members and their loved ones.
- Paid leaves
Paid leaves, whether vacation, sick, sabbatical, or bereavement leaves, are sought after by many employees as it helps them create a balance between work and personal life. Paid leaves are also great in combatting job burnout that could be caused by unreasonable workload and deadlines.
- Retirement savings plans
According to research by LendingClub Corporation and PYMNTS, 54% of Americans are living paycheck to paycheck. Due to the pandemic and the many job losses, reduced income, and unforeseen expenses, many employees are now prioritizing emergency and retirement savings.
Companies who offer a tax-advantaged 401(k) plan can help employees reach their retirement goals and help attract new hires and keep current employees motivated and satisfied. In addition, offering to match contributions up to a certain amount is advantageous for workers and can make the company stand out amongst competitors.
- Remote work and flexible schedules
While remote work and flexible work schedules were seen as a key perk for employees, more people and companies now view it as a benefit. This came about as the COVID-19 pandemic lockdowns started and proved that work is still manageable even outside the office. According to GitLab’s Out of the Office report, only 1% of respondents would like to go back to the office, and three out of four claimed they would stay with an employer who offers remote work as an option.
To cater to this demand, many companies are already shifting to a hybrid work model where employees can work at the office and remotely while offering employees the option to have a flexible schedule so long as it does not disrupt their job role.
Read more: The art of building a great benefit plan
With the many employee benefits to choose from, it is difficult for companies to provide all possible benefits while making it fit a pre-planned budget. HR leaders should understand the needs of their employees and plan which employee benefits fit best.