Decoding Employee Perks: Understanding the Definition and Various Types of Employment Benefits
Employment benefits are very forms of compensation provided to the employees in addition to their salaries and wages. They are provided by the employers in order to improve employee retention, recruitment, motivation and also productivity. Some key things to know about employment benefits, their definition and types are:
Definition of Employment Benefits
Employment benefits, also known as fringe benefits, are very non-wage compensations provided to the employees in addition to their normal wages or salaries. Some common examples include the health insurance, life insurance, disability insurance, retirement plans, paid time off, educational assistance, childcare assistance, housing and car allowance, etc. These benefits are provided voluntarily and enabling the employers to improve the compensation package of the employees.
The purpose of employment benefits is to increase the economic security of the the employees and improve their quality of life. Benefits also enable the employers to attract and retain the best talents over the long term. They are usually tax-free or offered at subsidized rates which increases their financial value for the employees. Overall, the benefits help to create a very healthy, happy and also motivated workplace culture.
Types of Employment Benefits
There are a various types of the fringe benefits commonly offered by employers globally. They can be broadly classified into five categories:
Insurance Benefits: These include health insurance, the dental insurance, vision care plans, life insurance, disability insurance. Insurance protects the employees against the financial losses.
Retirement Benefits: These include provident funds, pension plans, and also gratuity plans. They provide a financial security to employees after their retirement.
Health and Wellbeing Benefits: Examples include fitness memberships, workplace gyms, counseling services, preventive health checkups, smoking cessation programs, etc. These help to enhance employees' physical and mental health.
Work-life Balance Benefits: Such as paid vacation, sick leaves and personal leaves, flexible work options, child care assistance, elder care assistance, and also tuition fee reimbursement, etc. These benefits help the employees to achieve better work-life integration.
Additional Benefits: Include perquisites like free meals, free transportation facility, mobile/internet allowance, relocation allowance, housing allowance, car allowance, employee discount programs, etc. These benefits provide many additional advantages to the employees and boost their purchasing power.
In most countries, businesses are legally required to provide basic benefits such as social security contributions, paid annual and sick leave, overtime pay, etc. However, most employers today provide a lot of additional voluntary fringe benefits to amplify their employee value proposition. The exact composition and the scope of the benefits package depends upon company’s budget, policies and also industry benchmarks. But they undoubtedly play a very key role in enriching the lives of the employees and their families.
