Attracting and retaining top talent is a task on most business owner’s to-do lists. During the Great Resignation of 2021, this task has become even more challenging. As a result, offering competitive benefits is more important than ever.
To help you assess how your benefits package stacks up, here’s some information about what employees expect from a standard employee benefits package in 2021.
Employees Expect More Than Just Health Insurance
A few decades ago, employees were happy to receive health insurance. Today, the benefits landscape is dramatically different. Employees now expect their employers to provide them with access to a wide range of benefit choices. Here are the most common elements included in a standard employee benefits package:
A lot of decision-making goes into purchasing health insurance benefits for your employees. You must consider both your employees’ needs and your business budget.
That said, most small businesses offer their employees a few health insurance choices that range from robust to basic coverage. Plan options often include a health maintenance organization (HMO), a preferred provider organization (PPO), a high deductible plan with a health savings account (HSA), or an indemnity (fee-for-service) plan.
Some companies cover 100 percent of their employees’ health insurance costs; however, that is rare.
In 2020, 94 percent of employees participating in employer-sponsored plans paid some portion of their own premiums, according to BLS.gov. For single coverage, private industry employers covered an average of 78 percent of the premium costs, and for family coverage, private employers covered an average of 66 percent of premiums according to a 2020 BLS.gov News Release. In 2020, average employee contributions came in at $6,797 compared to average employee contributions of $4,524 in 2010.
Should you include dental and vision?
Offering dental insurance is more common than offering vision. However, many health insurance plans include some vision and dental coverage in their group packages.
Life & Disability Insurance Benefits
Small amounts of group life insurance are often provided as part of the standard employee benefits package. The 2020 BLS.gov News Release reports that 95 percent of employees covered by basic life insurance do not have to contribute to the premium. However, those who elect higher amounts most likely have to pay for the difference.
While short-term disability isn’t a standard health benefit, long-term disability is more common, and the cost is typically covered by the employer.
Both life and individual disability insurance are often added as a voluntary benefit so interested employees can buy as much coverage as they’d like at group rates through paycheck deduction. This is a win-win. It costs employers almost nothing to make these added benefits available.
Retirement Savings Plans
According to BLS.gov, 67 percent of private industry workers had access to employer-provided retirement plans in 2020. Following the pandemic, employers remain focused on helping their team members save for retirement. They are also increasingly focused on providing employees tools for financial literacy.
Activities that can impact retirement readiness include defined contribution plans such as 401(k) or 403(b), employer match and an automated contribution option.
Paid Time Off
While the health and savings benefits are undoubtedly the most crucial part of any standard employee benefits package, the perks also get plenty of attention. Perks are typically non-monetary benefits that employees enjoy.
For example, 97 percent of private industry workers are offered paid holidays. Receiving paid time off for your birthday and/or anniversary is a benefit that is trending.
Many small businesses offer vacation or paid time off and sick leave, while others grant individuals parental leave. The 2020 BLS.gov News Release reports that paid sick leave was available to 75 percent of private industry workers in 2020, with an average of eight paid sick leave days. At companies with 100 employees or fewer, 67 percent had access to paid sick leave – that jumped to 88 percent at companies with 500 employees or more.
Seventy-nine percent of private workers received paid vacation days. On average 10 paid vacation days were available to private workers after one year of service, and 17 days were available after 10 years of service. That said, some companies are now offering unlimited time off to set themselves apart from the competition.
Some employers also offer a fixed number of paid volunteer days as part of their basic benefit package.
Besides paid time off, today's workforce enjoys genuineness. Employees want their employers to care for and appreciate them and their efforts. They want validation in the form of personalized bucket-list experiences and customized care packages, to name a couple of ideas.
Wellness programs are climbing the list of popular perks, too. Employees have shifted to focusing on preventative health and mental wellness instead of just treating symptoms as they arise.
Flexible Work Schedules
Before the pandemic, only seven percent of the American workforce had access to flexible work schedules. Since many companies had to send their teams home to work, employees now desire hybrid work models and flexible schedules. And when workers do enter the office, they want a relaxed dress code or a pet-friendly workplace.
Flexibility will be an important way to differentiate your workplace, post-pandemic.
A Personalized Approach Is Key
Remember to formulate your benefits package based on the needs and desires of your unique employee pool. Consider conducting a survey to find out what your employees genuinely want. Here’s a list of popular perks small businesses offer:
- Paid time off or vacation
- Parental leave
- Childcare assistance
- Commuter assistance
- Employee discounts and rewards
- Employee Development Plans (IDPs)
- Sick leave
- Employee recognition
- Stock ownership
- Wellness programs
- Flexible schedules and hybrid work models
- Pet-friendly office space
- Performance bonuses
- Gym membership
- Tuition reimbursement
Like life and disability insurance, some of these options can be offered to employees on a voluntary basis at little to no cost to you.
Keep in mind that large corporations and enterprises often have the large FTE counts needed to leverage the best rates in benefits. However, small and emerging companies often don’t have the same opportunities.
As you review your benefits package, be sure to compare your benefits with those of companies similar in size. For some candidates, there are many advantages to working for a small company. As you structure your benefits plan, you may want to focus on flexibility and other perks rather than trying to compete head-to-head on health insurance.
Our employee benefits team works with companies of all shapes, sizes and budgets. Please contact us for assistance in finding the best plan for you and your employees. We offer a wide range of paid and voluntary benefits to meet your team’s needs, and we can help deliver on your goals with year-round support.