Employee Engagement

The Ultimate Guide To Employee Benefits: How To Support Your Workforce Effectively

By
Rebecca Noori
Last Updated November 27, 2023

Job-seekers have long jumped through hoops to secure an offer from a FAANG company (Facebook, Amazon, Apple, Netflix, and Google.)

The prestige and salary associated with these tech giants are irresistible, and the lavish employee benefits are highly sought-after.

But in the layoff climate, companies like Meta and Alphabet (formerly Facebook and Google) have made headlines for cutting staff and slashing their infamous perks and benefits budgets.

Mark Zuckerberg has reportedly chopped Meta's $200 a month Lyft subsidy, eliminated its free laundry service, and trimmed its free food budget. Similarly, Google CFO Ruth Porat and senior VP Prabhakar Raghavan have announced plans to cut back on fitness classes, company lunches, and personal laptops for employees.

So, which benefits are essential and which are dispensable? Today, we dig into the job market's most popular benefits for employees, including how to budget for them and maximize their value. We spoke with Gaby Israel Grinberg of Proofpoint Marketing and many other company leaders to share expert insights and real-world examples. There's plenty of inspiration when crafting your company benefits package.

What Employee Benefits Does Your Team Expect? 

Your employee benefits package will comprise mandatory benefits such as social security, required by federal law, and voluntary benefits, decided by your organization. There's a breadth of options in both categories, including these seven major types of employee benefits: 

1. Paid Time Off 

Paid time off provides employees with a break from work without the financial burden of covering living expenses. Some options include: 

Milestone Days 

Individual employees have significant dates, such as birthdays, kids' birthdays, anniversaries, or religious holidays. Employers can show they care by encouraging onboarding employees to plug these dates into their calendars and allowing them to celebrate or commemorate with PTO as appropriate.

Sick Time 

Sick leave is a paid absence from work when ill without risking job security or income. This leave is mandatory in some states — 79% of employees are eligible for this through their employer. Ensure you know the local laws and offer the mandated amount or more.

Vacation Time 

Restorative vacation time is essential for good health. The results of a 40-year study published in the Journal of Nutrition, Health & Aging found that workers who take less than three weeks of vacation per year have a 37% greater chance of dying. 

Some companies leave it to employees to decide how much paid vacation time to take by offering unlimited time off. Critics of this approach argue that some employees will choose to take zero vacation without a benchmark. Proofpoint Marketing gets around this by enforcing mandatory time off, which equals at least 24 days off per year. Employees may take these days in any combination but should plan for at least two days per month.

A family playing in the ocean.

2. Family Support 

Employees have family commitments that may impact their ability to work at certain times, from specific locations, or to be productive. Whether caring for elders, children, or other dependents, employers can facilitate work-life balance by offering the following examples of employee benefits:

Dependent Care Benefit 

Dependent benefit plans allow employees to use pre-tax income to pay for any support to care for their loved ones. For some, this means childcare benefits such as a monthly allowance or discounted services. However, this type of benefit also applies to elder care. In either case, 81% of US caregivers are female, so support in this area is vital for keeping women in the workforce and achieving career and pay equity.

Parental Leave 

The US falls short in offering new parents the chance to care for their babies. While some states mandate a degree of paid parental leave, federal law only provides for six weeks of unpaid leave, and not all workers are eligible. This regulation is in stark contrast to countries like Estonia and Sweden which offer 82 and 68 weeks of paid maternity or paternity leave, respectively. 

Employers like Amazon try to bridge the gap by offering their employees 20 weeks of fully paid parental leave, of which employees may take four weeks before birth.

Caregiver Leave 

Caregiver leave allows employees to take time off work to care for their dependents who may be ill or injured. This employee benefit covers anyone caring for an ailing parent or family member.

3. Health Insurance Plans 

Health benefits ensure employees have some financial provision to cover any unexpected medical bills associated with an accident, injury, illness, or disease. A recent government report highlights that surprise medical bills range between $750 to $2,600, even among privately insured patients, so employees must understand what their coverage offers. 

Common types of medical insurance are packaged as health reimbursement arrangements or health savings accounts. In either case, they typically include the following:

Basic Health Plan 

Your standard policy will cover essential medical expenses associated with doctor and hospital visits, surgical costs, preventative treatments such as scans or vaccinations, or mental health services like counseling and therapy.

Dental Insurance 

Dental insurance covers basic oral hygiene, such as regular check-ups and cleanings. It also covers treatments like braces or dentures and more specialist procedures such as root canals.

Vision Insurance 

Expect your policy to include eye exams, frames, and contact lenses. Depending on the policy, it may also cover the cost of laser eye surgery.

Prescription Drug Coverage 

Prescription drug coverage enables employees to buy medications unavailable over the counter. For example, insulin, more potent painkillers, or cancer drugs. To put this into perspective, for over 14% of Americans who require insulin, this costs 40% of their available monthly income, but insurance can reduce this burden.

Telemedicine Services 

24/7 telehealthcare provides employees with access to medical advice via telephone or online video chat. These virtual appointments reduce the cost and time associated with unnecessary trips to the ER or doctors out of hours. 93% of employers now offer telemedicine, up from 62% before the pandemic, according to SHRM.

4. Financial Planning 

The rising cost of living is on employees' minds, with 71% of US workers stating that the cost of living is outpacing their wages. Employers have a responsibility beyond simply paying their employees for hours worked. They can improve their financial stability by guiding them to plan for retirement, offering advice on the current economic climate, and providing for their loved ones. Consider the following benefits: 

Retirement Benefits 

Retirement contribution plans involve employee and employer contributions to a company-sponsored 401(k). These are commonly matched on a 1:1 basis and are pre-taxed.

Life Insurance Plans 

Life cover, or accidental death and dismemberment insurance, ensures that employees' families are financially secure following their untimely death. The insurance company will pay a lump sum to the policy beneficiaries based on multiples of the bereaved employee's final salary. Additional coverage may be purchased as required.

Accident Insurance 

Employees injured in an accident receive expenses to cover lost wages, transportation to and from medical appointments, or the cost of childcare while recovering.

Disability Insurance 

Short and long-term disability insurance provides financial protection for employees unable to work due to injury, illness, or other medical conditions. These policies typically offer a percentage of the employee's salary while incapacitated and can last from weeks to years, depending on the policy.

Financial Planning Services

Actively educate staff on money management, budgeting, and saving basics. For example, financial planning could include online financial literacy education, access to an in-house financial wellness program, estate planning, or debt management programs.

Three employees meeting at a table and working at a laptop.

5. Flexible Work 

Offering a flexible work schedule is an employee benefit that can make or break the people experience. Rani Borkar, Lead Technology Manager at Natwest Bank, explains:

“The pandemic made me question the logic that the team needs to spend 8-10 hours in a physical location. If I were to ask for any benefit, it would be to work from anywhere in the world and be completely flexible with my time — log on from 7 pm to 3 am one day but still manage to get my work done.”

As a distributed team with a goal of having an employee in every state, Proofpoint Marketing has designed a comprehensive, flexible work policy that gives employees the freedom to build their own work schedules. The policy includes:

  • Asynchronous communication using tools like Slack
  • Half-day Fridays 
  • No unnecessary meetings

Even if your company isn’t 100% remote, deliver on flexibility by offering employee perks like co-working space vouchers, commuter benefits, home office set-up costs, or cell phone stipends.

6. Learning And Development 

94% of employees would stay at a company longer if it invested in L&D. Instead of shying away from developing workers who may move on, why not invest in their growth and see how this impacts your candidate engagement and employee retention rates? Proofpoint Marketing takes this one step further by actively encouraging employees to establish their own personal brands, reasoning:

“Your personal brand is an asset that will open opportunities at Proofpoint and beyond. We understand Proofpoint may not be the last stop in your career journey, and we want to equip you to grow lasting influence through cultivating your personal brand."

Some other ideas include:

  • Professional Development Funds: Providing education assistance with a set budget for training and certifications.
  • Mentorship Programs: Match employees with senior-level mentors who can provide guidance and career advice.
  • Subsidized Conference Attendance: Send team members to conferences, workshops, and networking events.
  • Skills Development Opportunities: Offer job shadowing or secondments to develop wider skill sets.


7. Wellbeing 

Employee wellbeing sits firmly within the voluntary benefits category. Yet a thoughtful wellness plan could be instrumental in improving your employees’ mental and physical health. You only have to look at a common workplace condition like burnout to understand why, with 40% of full-time desk-based workers across six countries experiencing this condition. 

If supporting employee wellbeing aligns with your company values, consider offering employee assistance programs, including: 

  • Mental health benefits 
  • Yoga sessions and meditation classes
  • Discounts on gym memberships
  • Employee wellness challenges 
  • Nutrition coaching 
  • Spa days

How Should You Budget For Employee Benefits? 

Budgeting for employee benefits is a complex process with no set framework. Be realistic about what you can afford, and follow these steps to craft a budget that complements your overall compensation philosophy.

Start Planning In Advance 

Give yourself time to review your benefits, check out a range of providers, and benchmark your offering against industry standards. We spoke to Chief Experience Officer Gaby Israel Grinberg, who described how benefits planning starts in late Q3 or early Q4 at Proofpoint Marketing, with the aim of confirming everything before the holiday season. She told us:

"Around September, October time, we're already thinking, what's the next year ahead going to be? We start forecasting budgets, putting together our goals and metrics, and our hiring forecast, which is tied to our growth goals. Based on how we want to scale the company, we want to make sure that we're staffing appropriately. Those are the big rocks that we look at, but we also look at smaller, more individualized bricks within those pillars, things like "How much money do we allocate to our employee experience?" and, of course, benefits and total comp is a big part of that.” 

Gaby shared that Proofpoint allocates 77% of its operating budget to its employees, including line items like total compensation costs, pay raises, company retreats, and corporate gifting.

“From the year prior, we're already thinking, “Okay, we need to raise this person’s salary, or this person is on track to get a raise or a promotion.” We look at making sure we're staying competitive, that our employees are feeling their salaries are commensurate with their experience, their service to the company, whether or not they're on track to get a promotion, or move into a different position, etc. I feel like we've allocated enough budget and enough wiggle room to flex and make sure that our benefits and the overall people experience here is our number one line item and priority.”

Whether working to the tax or the calendar years, give yourself a quarter to plan and maximize your benefits budget.

Understand How Benefits Relate To Total Compensation 

Part of your budgeting will involve weighing what percentage of your total compensation package (including salary) to dedicate to employee benefits. Recent Bureau of Labor Statistics data suggests that the amount depends on your sector. Companies set aside 31% of their overall compensation to spend on benefits for the average civilian employee, 29.5% for the average private industry employee, and 38% for the average state and local government employee. 

The chart below outlines how much of the hourly wage companies allocate to salary vs. benefits for each sector.

Employer costs per employee hour worked by ownership, December 2022. Civilian, private industry, and state/local government

Why set aside money for benefits at all? Some companies consider boosting employee salaries rather than spending dollars on benefits their employees don't want or need. CEO Amelia Sordell explains why this was never an option when revamping employee benefits at her personal branding agency, Klowt. She said: 

Paying people more wouldn't guarantee that that money was going towards specifically the areas in which our team had identified they wanted help — aka mental health support.”

Look at your employees' annual salaries, and use the BLS data to calculate how much to spend on benefits in relation to compensation. Channel that money into the most impactful areas for your employees.

Focus On Fewer Benefits 

It's easy to get excited about the wide range of benefits in the market. From mindfulness apps and online cooking classes to pawternity leave and duvet days, there are endless ways to support your employees.

Instead of wasting money on too many incentives, try doubling down on the most important benefits for your employees. For example, after identifying that Proofpoint Marketing employees wanted to invest in their medical care and retirement plans, Gaby Israel Grinberg realized, “Let's do fewer things, but do the big things really, really well.”

This revelation allowed Proofpoint Marketing to increase its yearly health reimbursement amount to $6,000 per employee (with dependents) — a significant boost from $4,000 the previous year.

"Let's do fewer things, but do the big things really, really well."

6 Ways To Maximize Your Employee Benefit Offerings 

Every dollar you spend on benefits should support your employees, enabling them to maintain a healthy work-life balance. It's a cycle. Companies need employees who will perform and excel in their roles to serve customers and achieve business growth. But this can only happen when employers invest in their employees' wellbeing at work and in their personal lives.

Achieve this work-life harmony by understanding the value of a comprehensive benefits package and how to communicate your offering to your employees.

1. Survey Your Employees 

Guessing or dictating what your employees require isn't enough. Instead, survey your employees for a clear picture of their wants, needs, and preferences.

Gaby Israel Grinberg recounts, “When we surveyed our team, the feedback we got was two things: protect our health, protect our future. Help us define our future and live our best lives.” 

Set up a simple online survey including a mix of close-ended and free-text questions to assess employees' satisfaction with their current benefits and to understand what new offerings they'd like. Close-ended questions with Yes/No answers are easy to quantify, while free-text will provide deeper insights into employee sentiment. 

Example benefits survey questions:

  • What would make your employee experience better? 
  • If you had to pick one benefit, what would it be? 
  • Do you have a good understanding of what is available in our current benefits package? 
  • Which employee benefits do you rarely or never use?


2. Encourage Open Dialogue 

Looking beyond employee surveys, encourage regular 1:1s between managers and employees to determine your team members' challenges. For example, Gaby Israel Grinberg told us they lean on regular conversations at Proofpoint Marketing to build relationships and create an open platform for employees to speak up about their pain points. 

“Open dialogue that we build into our people experience every quarter allows our team to have psychological safety — that feeling of, “Okay, these people care, they're listening to me, they want to hear my feedback. I have an opportunity to share what I need or want.” These quarterly conversations help us determine the types of benefits or experiences that we should be prioritizing for our team. 
If you have a 5,000-person company, building one-on-one, personal, face-to-face time is going to be a lot harder. But depending on how big your company is, you could roll that out between different leadership teams, business areas, and functions to create a space where somebody is talking, and somebody is listening. That has been key in shaping and determining some of these initiatives.” 

Use these conversations to gather evidence about where your employees are struggling and share information about existing benefits they may not be leveraging.

3. Track Your Uptake Metrics 

Emma L’Amour, Business Operations Lead & Sustainability Practitioner at Profit Impact explains how offering a wealth of benefits doesn’t necessarily correlate with uptake: “I've worked at places that have benefits as long as your arm, but I used probably 1% of them!”

Proofpoint Marketing had a similar experience when they were excited to incorporate a new employee health and wellness platform into their benefits offering. The self-serve portal was dubbed the "Netflix for working out," with online access to pre-recorded content created by personal trainers, kinesiologists, etc., and included healthy eating resources. But unfortunately, the metrics revealed that employee usage was extremely low, so the company canceled their subscription.

Gain visibility into how your employees use their benefits — which do they love, which have they never touched? Are some too complicated for them to use? Ideally, your benefits provider will offer reports and analytics to ensure your employees put your investments to good use. Alternatively, circle back to your survey data to find the answers.

Four employees sitting around a table looking at data.

4. Aim For Flexibility 

Each employee on your team is an individual and requires a different benefits mix to match their unique circumstances. Gaby Israel Grinberg believes that customizable benefits packages or flexible spending accounts are the solutions here:

“Companies feel they need to choose a platform or a service, and then everybody needs to buy into that. But we learned that people wanted more flexibility in their benefits, and that was a theme that kept coming back year over year.” 

Similarly, Head of People Andrea Nisbet breaks down their approach to pick-and-mix benefits at M:M Bio.

"We gave everyone a 2k per annum pot that they can use to tailor their own additional benefits, i.e., travel to work, gym membership, childcare support, additional pension, add family to PMI schemes or even donate to charity, as we know each of our people needs something slightly different. They can pick a combination and update their choices twice a year. We continue to add to our benefits as people tell us what is important to them."

5. Measure Benefits Results

Before adjusting or rolling out a new employee benefits program, set goals for what you want to achieve. For example, you might want to: 

  • Reduce absenteeism rates
  • Improve benefits uptake 
  • Slow employee turnover
  • Retain high-performing employees
  • Attract talented employees to join your organization

Decide which metrics to track, such as employee retention rates or employee attendance figures, and measure the impact of your benefits program against these.

6. Focus On Employee Experience 

The bottom line: the types of employee benefits you offer can be a game-changer for your people. Dedicate time and resources to crafting an attractive benefits package, and you'll reach your goals with ease. Gaby Israel Grinberg agrees:

 “If you want to keep your employees around for two, three, five, ten years, you've got to create an experience that allows them to maximize their time here: growth opportunities, learning, cross-team experiences, in-person experiences.”

Employee benefits will only work in tandem with supportive company values. Lay the foundations of trust and a sense of belonging, and employee satisfaction will inevitably rise.

Create a culture people won't want to leave

Create An Employee-Centric Culture With Nectar 

Employee benefits are just one way to increase job satisfaction and create a supportive working environment for your team. That’s why Nectar offers a suite of tools to continuously reward your employees and foster growth in your organization. 

Our Recognition feature allows coworkers to give praise and meaningful shoutouts to their peers throughout the working day, while you can use the Rewards feature to redeem points on gift cards, Amazon, company swag, charitable donations, or custom rewards. 

Book a free Nectar demo to start creating a positive workplace culture today.

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