When you think about employee benefits, the first things that come to mind are likely health insurance and retirement planning. Employer-sponsored health insurance plays a big role in the employee benefits puzzle, as do retirement plans — accounts like 401(k)s, employer contributions to retirement savings, pension plans and more.
While health insurance and retirement plans are crucial to employee benefits, you have more options for driving employee satisfaction and loyalty. This FAQ is for HR specialists or business owners who want to make sure they’re making the most of the key opportunity employee benefits represent.
Employee benefits, when part of a larger strategy, can attract and retain top talent and empower your people to succeed both in and out of their roles.
Below are some commonly asked questions about employee benefits and information on how to design an employee benefits program to work with your overall employee compensation package.
What are employee benefits?
Employee benefits are any non-wage compensation provided by employers to support employee wellbeing, financial security and job satisfaction. In short, they’re the perks of working for a company outside of a salary. This can include but isn’t limited to:
- Health and wellness benefits
- Retirement and financial benefits
- Paid time off
- Flexible work arrangements
- Bonuses and incentives
- Education and development
- Other perks
Good health benefits are the foundation of an effective benefits program, but it’s not the only way in which employers can support their people. All of the above can play a part in creating a robust total rewards package.
What are total rewards in HR?
Total rewards are the complete package of compensation, benefits and other incentives that an employer offers to an employee. Total reward strategies provide a compelling value proposition for your employees, and a robust total rewards and compensation strategy drives business performance in today’s competitive job market.
Employers who appropriately reward their talent build a valuable employer brand, keeping their people satisfied in their roles and attracting talent to join the team. When it all comes together, the skills, expertise and commitment of a workforce that feels valued move your organization's business goals and objectives forward.
How do I design an employee benefits program?
Designing a successful employee benefits program starts with understanding your organization’s needs and seeing how they stack up against other organizations. With cost pressures intensifying and the pace of change showing no signs of slowing, employers need clear insight into their employee benefits strategy. This includes a customized total rewards program based on strategic planning, market and industry-specific benchmarking.
NFP’s Talent Solutions consultants can help you plan, utilizing data specific to the industry, geography and organizational size to ensure accuracy for your business. In conjunction with our team of compensation consultants, we provide independent, third-party compensation planning with incentive and goal-oriented rewards to meet your unique business needs.
What are employee assistance program benefits?
An employee assistance program (EAP) is a workplace benefit designed to help employees manage personal or professional difficulties. These programs offer a way to help employees with challenges that may affect their wellbeing or work performance.
Often, EAPs will include short-term counseling, referrals to specialists for ongoing support, consultation or coaching for managers to address employee-related challenges and work-life balance support. EAPs are part of a holistic approach to your employees’ health and overall wellbeing. They work hand in hand with other benefits to help your employees find balance.
For that reason, it’s important that any EAP be highly customizable. What are your people struggling with? What challenges are they facing both in and outside of the office? Starting with data about your organization – and others like yours ‒ is key.
What is an employee benefits trust?
An employee benefits trust is a long-term savings plan established as a job benefit, often involving stock ownership or pension plans. It’s a legal arrangement that holds or manages money or assets for employees. You may have heard them referred to as an employee stock ownership plan (ESOP) or a pension plan.
An ESOP is qualified by the Internal Revenue Service because it includes special tax benefits for both the employer and the employee. The plan must meet standards for participation, vesting and proper administration that are set by the federal government.
An ESOP or pension plan could be an additional benefit for your people outside of a traditional retirement account.
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