What Is a Benefits Package? (With Components and Tips)
By Indeed Editorial Team
Published June 10, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
When starting a new job or getting promoted at work, there are certain benefits employers offer to employees as additional compensation. The benefits that an employer offers can add significant value to your life if you use them optimally. If you're negotiating for a new role, consider learning about the components of employee benefits to help you make informed decisions. In this article, we explain what a benefits package is, discuss why it's important, outline the components of a comprehensive one, explore potential additional benefits for employees, and present tips for getting remarkable employee benefits.
What is a benefits package?
A benefits package, also called employee benefits, is a collection of non-wage compensation employers give to employees. It varies across several industries and companies, but it typically covers a broad scope of services, bonuses, insurance, and vacation time. It can also include other benefits, such as gym membership, car allowance, or cell phones.
Companies use these benefits as incentives to attract and retain talented employees that can contribute to the company's growth. Employers decide the content included in the package, so it can vary depending on the capabilities of an organization and an employee's position in the company.
Why are employee benefits important?
Employee benefits can help facilitate employee engagement and promote a positive work environment in an organization. It helps to increase employees' job satisfaction and productivity in an organization. It can also foster organizational alignment between employers and employees to achieve set goals and contribute to a company's success. Employee benefits are a major part of your compensation package as an employee and can provide significant value.
Components of a comprehensive benefits package
A comprehensive package entails the most common and basic employee benefits companies offer candidates. The typical components include:
Paid leaves or vacation days
Paid leave benefits are a foundational component of a comprehensive package. This benefit can ensure that employees get the chance to request paid leave or vacation days for a specific number of days each year. The number of days offered for total paid leaves and vacation days typically ranges from 16 to 30 days annually. Some companies provide certain sick, personal, and vacation days, while others give a certain number of hours to be absent from work without any explanation. Many companies also offer paid holidays and funeral leaves as additional paid time off.
Consider exploring the conditions accompanying the paid leaves of a company before accepting a role. For instance, some employers may insist on a 12-month full working time before permitting a leave request, while others may limit their timeframe to 6 months before a leave request.
Many companies offer retirement package options for employees. Many organizations offer the matching option where the company matches the exact amount you contribute to your savings, helping you double your annual retirement savings. This provides a great advantage to employees by helping you save for retirement much faster.
A life insurance policy or assurance provides a benefit that pays employees' selected beneficiaries, usually their spouse, children, or other family relatives, in case of the insured employee's death. Life insurance is essential, especially for employees whose jobs entail high risks. Many organizations also include accidental death or emergencies insurance with the life insurance plan.
There are different types of life insurance policies depending on the degree of risks involved. For example, a group life insurance plan is a standard plan employers offer. Consider speaking to an insurance policy broker to help you analyze the insurance a company offers and determine if it's fair for the job.
There are two primary forms of disability insurance, namely short-term and long-term disability insurance. Employers categorize short-term as when an employee takes about three to six months off work and long-term if away for more than twelve weeks. Short-term disability insurance provides a percentage of your income if you're unable to work because of a short-term condition, illness, or injury. In contrast, long-term disability provides part income in case of any injury or condition that renders you unable to work for a more extended period. Long-term disability insurance may last for several years.
Health insurance is a standard package companies offer their employees. This insurance policy covers an employee's medical expenses or treatments for a designated amount. Some employers may extend this benefit to family members, and some health insurance policies cover the entire medical bills for your service as an employee.
Consider knowing the details of a company's health insurance to maximize its use. You can find out what kind of medical expenses it covers, how many family members it can extend to, and who covers the bill for the policy. Additional health-related elements employers can offer include:
Vision insurance: This is usually an additional benefit to the health insurance plan that allows you to seek vision care and get glasses or contact lenses at a reduced price. The vision insurance benefit may also apply to your spouse or children to get eye care products at an affordable rate.
Dental insurance: This is also an additional benefit that enables you to see a dentist or other dental professionals for preventive and emergency teeth treatment.
Training incentive allowance
Relevant professional training can aid your development and improve your job performance. Many employers provide training incentives allowance that gives employees access to paid online training and certifications. Companies can also offer the opportunity to travel for professional courses, summits, or programs that can enhance your skills, competence, and dedication to the job.
Employers offer travel benefits to employees to provide the opportunity to travel, network, and grow your career. These may include paid international conferences that can aid your professional development or business meetings for the company. If you particularly enjoy travelling as a hobby or interest, consider exploring jobs that provide travel benefits.
Potential additional benefits for employees
Many organizations offer additional benefits apart from those included in the comprehensive package to employees. Here are a few additional benefits:
Relocation and housing benefits
Companies provide relocation benefits to employees that move or relocate because of the job. This benefit covers the cost of moving and can potentially close the cost if you buy a house. It can also include a stipend based on living costs in a particular area to help employees pay for housing.
This is common among tech startups and often part of large corporations' compensation packages. Stock options enable you to buy the company's stock at a predetermined price. Employers often require employees to work with a company for a specific period, typically a year, before exercising this right. Stock options can provide substantial financial gain, especially if the company becomes even more successful.
Organizations can provide wellness programs for employees as part of their compensation package. These programs typically include incentives, such as gym membership, on-site exercise facilities, and in-office meditation or yoga classes. They can also ensure that healthy snacks or partially subsidized meals are available at work. Consider taking advantage of these benefits if you promote a healthy lifestyle.
Companies sometimes offer student loan repayment assistance to recruit and retain employees. They can match your student loan repayments to a specific amount, usually a percentage of your salary. You can utilize this benefit to finish paying your student loans faster and save more money. They may also offer tuition reimbursement and pay all your tuition to earn an advanced certification or degree in their field.
Tips for getting remarkable employee benefits
You can apply the following tips to help you evaluate and decide on your specific employee benefits when considering or accepting a new role:
During salary negotiations, you can also bargain for your employee benefits. Consider bargaining critically to receive the specific benefits you need. Employers may not offer all benefits you may be considering, so you can take the time and effort to negotiate your offer until you reach a compromise.
Customize your package
You can ask the human resource representative about the flexibility or customizability of your package. Consider each component of the proposed package to see if there are specific details you'd like to change or discuss. Make the necessary changes or adjustments to customize your benefits to suit all your needs.
Consider total compensation
Consider total compensation by examining every aspect of your offered employee benefits and request your specific needs even if they're not part of the initial package plan. For example, you may presently have health insurance through your spouse's provision. Consider asking for compensation in another aspect like a salary raise. You can acquire total compensation by requesting it in another form since you're saving the company money by declining the benefit.
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