Benefits

compensation

A worker’s compensation includes salary AND benefits.

Benefits are a key legal, motivational, and organizational consideration when it comes to employee relations. Standard benefits address a range of employee needs, and they can be a key reason for employees to seek out employers who offer them. Human resource professionals must familiarize themselves with the various benefit options that are out there. The following lists the most common types of benefits:

• Relocation assistance: Sometimes hiring someone means moving the new employee to a different location. The talent an employer needs may come from another city or country, and attracting the right person may entail providing assistance with visas, housing, flights, and a range of other moving costs.
• Medical, prescription, vision, and dental insurance plans: Particularly in countries with poor social benefits (such as the U.S.), medical insurance is a necessity for employers hiring full-time workers (sometimes it’s even legally required). In countries with strong social welfare systems (such as Canada), these benefits are provided by the government.
• Dependent care: Many employees obtain health insurance coverage through their employer not only for themselves but for their spouse and/or children, too.
• Retirement benefit plans (pension, 401(k), 403(b)): Larger employers usually offer employees various retirement-related benefits such as long-term investments, pensions, and other savings for retirement. The primary draw for most of these benefits is the tax benefit (the ability to set aside pretax income for retirement savings).
• Group term life and long-term care insurance plans: Life insurance and long-term care are benefits paid by employers to insure individuals against various types of risks and disasters. Employees with life insurance or long-term care insurance will see their dependents (and themselves, in the case of long-term care) financially supported if a serious ailment or tragedy occurs.
• Legal assistance plans: Not quite as standard as the rest of the benefits above, legal assistance plans can be established for jobs in which personal liability is high. Legal assistance is expensive, and such plans draw on organizational resources to cover the employee under circumstances when legal aid is needed.
• Child care benefits: Supporting employees’ families is absolutely critical to retaining great talent. Especially in families with two working parents, employer-covered child care is a key benefit that provides cost savings to the employee while enabling the employee to focus on work (which benefits the employer).
• Transportation benefits: Another common benefit is paid transportation. Particularly in countries/regions where public transportation is the norm, it’s quite common for the employer to pay for all work-related transportation.
• Paid time off (PTO) in the form of vacation and sick pay: All organizations must provide paid time off, vacation, and sick pay under certain circumstances. Many countries have stringent legislation governing minimum requirements for paid time off and vacation leave to ensure that employees have a healthy work-life balance.
• Employee assistance programs (EAP):  These programs offer free, confidential assessments for personal or work-related problems. The assessment can include counseling, referrals, and other follow-up services. EAPs are meant to address a variety of issues such as mental and emotional wellness, substance abuse, stress, grief, and family problems. Sometimes these benefits may be included with a medical insurance plan.

While there are other, less common benefits that employers can offer, the list above describes common benefits that employees can expect to encounter.

Fringe Benefits

The term “fringe benefits” was coined by the War Labor Board during World War II to describe the various indirect benefits that industry had devised to attract and retain labor when direct wage increases were prohibited. The term perks (from “perquisites”) is often used informally to refer to those benefits of a more discretionary nature.

Perks are often given to employees who are doing notably well or have seniority or particularly high-value skills. Common perks are hotel stays, free refreshments, leisure activities on work time, stationery, allowances for lunch, and use of a company vehicle. When numerous options are available, select employees may also be given first choice on such things as job assignments and vacation scheduling. They may also be given first chance at job promotions when vacancies exist.

Benefits may also include formal or informal employee discount programs that grant workers access to specialized offerings from local and regional vendors (e.g., movies and theme-park tickets, wellness programs, discounted shopping, hotels and resorts, and so on). Companies that offer these types of work-life perks seek to increase employee satisfaction, boost loyalty  and minimize turnover by providing valued benefits that go beyond a base salary. Fringe benefits are thought of as the costs of keeping employees (besides, of course, salary).