A competitive salary is the priority for most employees when they start a new job. However, other financial benefits that are included in the compensation package can also be helpful when attracting top talent.
Any financial discount that helps employees reduce their costs is typically going to be the extra incentive they need to choose a particular company. Some of these financial benefits include:
Healthcare
According to a 2023 Kaiser Family Foundation survey, the cost of employer sponsored health coverage for a family averaged $23,968 per year. The annual costs for a family contributing to their health care plan averaged $6,575. Many health care plans have also introduced alternative options that can help reduce costs, including:
Telehealth - Which allows for a remote doctor’s visit to do initial assessments, manage chronic conditions, or conduct mental health counseling. This reduces the cost of traveling to an in person appointment which usually has a higher copay.
Health Saving Accounts (HSA) - Generally, an HSA is offered as part of an employee’s health care plan to use pre-tax income for qualified medical expenses. This could include paying for dental procedures and vision care.
Alternative Care - Depending on the specific health care plan, the services that are usually offered as alternative care is chiropractic, acupuncture, and massage. Usually there is a set cost and number of sessions available each benefit year.
Retirement
A retirement plan is a benefit that most companies offer their workers. Employees will usually compare the financial advantages of each retirement plan, and carefully considers the specific costs of participation, including:
Employer’s Match - According to Fidelity, the average employer match is 4.7%. The employer’s contribution typically matches dollar for dollar an employee’s funds up to a percentage limit each year.
Employee’s Contribution - Employees usually have their money deposited into their retirement account each pay period. Typically, in order to receive the full employer match, a minimum amount needs to be deposited to their account.
Vesting Period - This is the length of time an employee works for an employer before having access to the employer’s contributions in their retirement account. This time period is usually 3 to 5 years. If an employee leaves the company sooner, a portion or the entire amount could be forfeited at that time.
Insurance
Different types of insurance allows employees to take advantage of lower group rates that can be automatically deducted from each paycheck. Insurance that is usually offered in a comprehensive benefits packages could include:
Disability Insurance - This insurance typically provides coverage for either short-term injuries (usually less than a year), or a long-term disability that could last during the employee’s lifetime. The amount paid will usually depend on the type of injury, illness, and the specific policy terms.
Life Insurance - Beneficiaries of the employee will often receive a set amount of money in the event of the worker’s death. In some cases, a lower policy amount is automatically provided by the employer without charging any premium to the employee.
Pet Insurance - A supplemental insurance usually offered to cover costs related to the health of an employee’s pet. This can often be used for routine veterinary exams or additional procedures if the pet has a more serious medical condition.
Paid Time Off (PTO)
Most employers will offer PTO which is typically accrued each pay period based on the hours an employee has worked. Many companies will usually have a maximum PTO that can be earned based on the worker’s length of employment.
According to Forbes, the consumer price index (CPI) increased to 3.7% in September. Which indicates goods and services will generally cost more, and possibly strain an employee’s budget. As the Federal Reserve increases interest rates to help lower inflation, this action can also impact an employee’s ability to pay off their existing debt.
The 2023 Workplace Wellness Survey conducted by Employee Benefit Research Institute (EBRI), reported 47% of workers were most stressed about having savings for an emergency situation. While 45% indicated they were more stressed about paying their monthly bills. These economic conditions have prompted many employees to look for financial relief from their employer.
Since financial strain is an overall concern for the majority of these workers, many are looking for alternatives from their benefit plans to help reduce their overall costs. In the EBRI survey, 54% reported they wanted greater financial contributions from their employer. While 34% indicated they wanted more benefits and resources made available to assist with their financial well-being.
More productivity - According to the 2022 SmartDollar Employee Benefits Study, 51% reported their stress related to money issues negatively impacted their mental health. Also, 45% of those surveyed indicated they were distracted at work due to financial issues.
Solidifies reputation - Since many companies are competing to hire the best talent available for their organization, highlighting the financial benefits beyond the base salary helps to attract and recruit job candidates. This also solidifies a reputation as an employer of choice.
Promotes happier workplace - Workers who are unhappy about their financial situation will likely quit to find a workplace that offers the benefits they need. When employees are happier they will likely stay at the company which also can reduce recruitment costs.