A Comprehensive Guide to Employee Benefit Programs

What are Employee Benefit Programs?

Employee benefit programs are employer-sponsored programs that provide employees with a wide range of offerings, such as healthcare, retirement savings accounts, paid time off, parental leave, and more. These benefits often go beyond monetary compensation and provide a crucial role in improving employee satisfaction, engagement, and overall well-being at work.

Employee benefits help meet basic employee needs such as healthcare and childcare, while also enhancing an employee’s quality of life through other areas, such as with tuition reimbursement or flexible working hours.

When creating your employee benefits plan, it’s important to provide a diverse array of offerings to employees that allow employees the flexibility to work without stress. Consider the different life stages of your employees—are some employees new parents or looking to start a family? Providing a robust parental leave program could attract those employees. Looking for recent graduates? Tuition reimbursement could be attractive to that market.

Here are some common employee benefits that employees look for in an employee benefit program:

• Health insurance – covers medical, dental, vision, prescription drugs
• Retirement plans – 401(k), pensions, matching contributions
• Savings accounts – health savings accounts, flexible spending accounts, dependent care accounts, Carbon Savings Accounts
• Paid time off – vacation, sick days, holidays
• Disability insurance – short-term, long-term
• Parental leave
• Tuition reimbursement
• Wellness programs
• Perks like gym memberships, mass transit benefits, employee discounts, subsidized meals, and more

By offering a diverse array of employee benefits, including ones that help support value-based initiatives, employers can support the well-being of their workforce while tackling larger initiatives. As HR professionals, it’s essential to strategically leverage these benefits to foster the right culture for your workplace.

The Importance of Employee Benefit Programs

Employee benefits aren’t just random offerings to employees—they’re a strategic and integral component of crafting your company’s success. From attracting top talent to fostering employee engagement and productivity, employee benefits are used in a strategic way to help companies achieve their goals. Here are a few reasons why investing in a quality employee benefits program can help your organization.

Recruiting and Retention

If your organization wants to both attract and retain top talent, providing a competitive benefit package is essential no matter what industry you work in. Candidates don’t just consider salary in their decision in what job they work in anymore—more people are choosing employers who provide them the ability to support the lifestyle they want to live. This might mean that prospective employees are looking for support for the future, work-life balance, or the opportunity to grow in their career.

Once your employees are onboarded, you want to be able to stay competitive as well so that those talented employees stay long-term. According to a 2018 study by Willis Towers Watson, 78% of employees said they are more likely to stay with their employer if they like their benefit program. Employees who feel valued and supported with comprehensive benefits are more likely to remain loyal to their employers, which can reduce turnover rates and any associated recruitment costs.

Engagement and Productivity

Encouraging employee engagement is a proven strategy to help increase productivity and minimize turnover. According to a study by Gallup, engaged employees helped to produce a 23% increase in profitability and an 18% in productivity. Providing a comprehensive benefit package is just one way to encourage employee engagement.

When employees feel supported through benefits such as wellness programs, professional development opportunities, and work-life balance initiatives, they are more likely to be engaged and motivated in their roles. Engaged employees are not only more productive but also contribute to a positive work culture, driving innovation and collaboration within the organization.

Cost Management

If you’re looking to manage costs, investing in the right employee benefits can help both your employees and your organization. Employee benefits are a long-term investment that’s needed to ensure that your organization both attracts and maintains top talent, which can ultimately reduce recruiting and training costs associated with high turnover rates.

Think of your employee benefits as investing in your individual employees—you’re investing in employee wellness programs and preventative healthcare measures that help keep your workforce happy and healthy. Some benefits, such as Carbon Savings Accounts, can help minimize spending on your company’s sustainability strategies.

Employee benefits are not just trivial perks employees are looking for in an organization, they are strategic investments to help foster employee engagement and manage costs. Employee benefits are just one portion of a larger picture when it comes to compensation, and it’s important to look at what you’re offering employees holistically to understand what they need to stay engaged in the workplace.

Current Trends for Employee Benefit Programs and Compensation

Employee benefits go through trends and changes just as any other facet of business. Understanding the growing changes is important to stay on track with what employees are currently looking for in an employee benefits package. We’ve compiled a few current trends within the employee benefits space, and what we think will be more relevant in the future.

Focus on Holistic Wellbeing

Individuals have more than just one major concern in their life—which is why we predict that there will be more of a focus on a holistic view of an individual’s life. Think of the intersection between physical health and emotional health. What about the impact of financial health with stress?

All of these things contribute to stressors completely unrelated to work, so we predict employers are starting to look at how benefits can help alleviate outside stressors, so employees can bring their whole selves to the workplace.

Equitable Benefit Plans

Your employees all have different needs when it comes to benefits, so it’s best to provide a flexible offering that provides the most benefit to as many employees as possible.

Benefits like flexible spending accounts or Carbon Savings Accounts gives your employees the opportunity to decide what to use their benefits for. For example, the CSA can help with costs associated with working from home or public transportation costs.

Providing offerings that are more flexible is a win-win for both employees and employers. As employees move through different life stages, your employees can pick and choose what benefits best fit with what they need, while employers can save money by only paying for what employees opt into.

Value-Based Benefits

Most employees are looking to work for an organization that aligns with their values and beliefs. This might mean that employees are looking more for companies with clear values and missions—and have the actions to back it up.

Benefit programs like matching gift programs, volunteer time off, or Carbon Savings Accounts are all different actions that employees look at when considering if an employer aligns with their values outside of work.

Pay Transparency

While not necessarily a benefit, more employees are looking for pay transparency both in the hiring process and generally after employment. Pay transparency can help minimize major issues in the workplace, such as the gender wage gap and pay discrimination.

Legislation is also following this trend. In March 2023, the Salary Transparency Act and Pay Equity for All Act were introduced to Congress, and if both laws pass, all US employers will be required to disclose wages associated with jobs. Some states, like California and New York, have already implemented similar laws requiring job listings to display a salary range to prospective employees.

Some businesses are far ahead of this trend. Businesses like Buffer publicly display their employees’ salaries as a way to prove their commitment to transparency.

Best Practices for Your Employee Benefits Program

Implementing an effective employee benefits program requires careful planning, strategic decision-making, and ongoing evaluation. Here are some best practices to consider when designing and managing your organization's benefits offerings:

Align with Company Culture and Values

By nature of how organizations work, organizations place value on something, whether that’s a numerical goal or a general mission statement. These values are the things your organization believes in and stands for. Whatever mission your company strives to achieve, and how it influences the culture it provides for its employees all matter. Consider how your employee benefit package reflects those missions and values.

Let’s take Patagonia as an example. Patagonia’s mission statement is “Patagonia is in the business to save our home planet.” To align with this, Patagonia offers an eight week paid environmental internship for employees to volunteer with organizations around the world. Consider how your benefits to your employees align to your company values, and how those benefits can further your company mission.

Benchmark Competitively

Consider what the industry standard is for your benefit offerings. As a start, look at what your direct competitors are offering. How are the benefits you’re providing different from what is the standard rate on the market? Stay informed of emerging trends and best practices so you can stay competitive with your competition.

Survey Employees Regularly

Gather feedback from your employees through regular surveys to understand their preferences, needs, and satisfaction levels regarding the benefits program. Use this feedback to make informed decisions about benefit offerings and identify areas for improvement or adjustment.

Offer Choice Where Possible

Recognize that employees have diverse needs and preferences when it comes to benefits. Offer a range of options and customization opportunities where possible, allowing employees to select benefits that best meet their individual circumstances and priorities.

Prioritize Inclusive, Equitable Access

Ensure that your benefits program is accessible and inclusive for all employees, regardless of their background, role, or status within the organization. Consider the diverse needs of your workforce and prioritize equity in benefit design and administration.

Consider the Total Compensation Package

Take a holistic approach to evaluating the cost of your employee benefits program, considering both direct and indirect costs. Factor in expenses such as payroll taxes, administrative overhead, and the impact of benefits on employee morale, productivity, and retention.

Choose Provider Partners Carefully

Select reputable and reliable provider partners for your benefits program, including insurance carriers, financial institutions, and wellness vendors. Conduct thorough due diligence to ensure that providers align with your organization's values, offer high-quality services, and provide excellent customer support.

Leverage Technology

Use technology to streamline benefit administration, enhance employee engagement, and improve the overall user experience. Invest in user-friendly platforms and digital tools that make it easy for employees to access information, enroll in benefits, and manage their accounts efficiently.

Best Employee Benefits to Provide

If you’re looking for specific types of employee benefits to consider, here are common benefits found in a compensation package. While these are common benefits, the offerings vary by industry, location, how much coverage employers sponsor, and more.

• Health Insurance: One of the most common employee benefits, health insurance provides employees with access to medical care, including doctor's visits, prescription medications, and hospital stays. Many employers offer health insurance options that cover alternative and holistic healthcare services, promoting wellness while reducing the reliance on traditional medical interventions.
• Retirement Plans: Retirement plans, such as 401(k) or pension plans, help employees save for their future financial security. Employers can offer socially responsible investment options within these plans, focusing on companies with strong environmental track records or investments in renewable energy and sustainable infrastructure projects.
• Flexible Work Arrangements: Flexible work arrangements, such as telecommuting or flexible hours, allow employees to achieve a better work-life balance while reducing their carbon footprint by minimizing commuting time and emissions.
• Wellness Programs: Wellness programs promote employee health and well-being through initiatives such as gym memberships, yoga classes, and mental health resources. Employers can incorporate eco-friendly wellness activities, such as outdoor group hikes or bike-to-work challenges, encouraging physical activity while reducing carbon emissions associated with transportation.
• Carbon Savings Accounts: Forward-thinking organizations, like Scope Zero, offer Carbon Savings Accounts® (CSAs) as part of their employee benefit programs. CSAs help employees afford home technology and personal transportation upgrades that reduce their utility bills, fuel expenses, and carbon footprint. These upgrades simultaneously reduce the company’s work-from-home and commute emissions.

Provide Employees Lasting Benefits

The benefit program you offer your employees can make a lasting impact—both on their future and on the world as a whole. From traditional benefits like health insurance and retirement plans, to newer benefits like Carbon Savings Accounts, your benefits can provide a lasting impact.

With thoughtful planning, strategic decision-making, and a commitment to supporting employee well-being, organizations can create a benefits package that not only attracts and retains top talent, but also fosters a positive culture both in the workplace, and out.

Interested in learning more about how you can offer a Carbon Savings Account® (CSA) as an employee benefit? Learn more about how Scope Zero can help your organization meet its sustainability goals.

Employee Benefit Programs FAQs

What is an employee benefit program?

An employee benefit program is an employer-sponsored program that provides employees with additional benefits beyond compensation.

What is an example of an employee benefit plan?

In the United States, employee benefit plans often include things such as health insurance, retirement savings accounts, paid sick leave, and flexible spendings accounts for things like childcare or health-related items.

What are some unique employee benefits?

As employees’ needs change, employers are responding by offering more unique benefits that can provide the support employees are looking for. For example, fertility support is a newer benefit that some employers are offering to ensure employees can start a family on their own time. Other organizations are offering benefits like Scope Zero’s Carbon Savings Account® (CSA) as a way to provide equitable financial wellness while meeting an organization’s sustainability goals.

What are some more affordable employee benefits?

The most affordable employee benefit an organization can sponsor is time off. This benefit doesn’t directly cost employers anything other than the tools to manage and keep track of when an employee takes the time off they outlined in an employer’s benefit program.

However, some employer benefits, such as a Carbon Savings Account, are more affordable than other benefits. CSAs can streamline other adjacent benefits (such as work from home stipends, commuter benefits, and EV reimbursements). These benefits can all use a CSA to purchase them, so your organization can consolidate the number of vendors you work with while still providing employee choice.

Minimize Scope 3 Emissions with Scope Zero

Provide employees with opportunities for financial wellness while minimizing Scope 3 emissions. Schedule a demo to learn how you can measure, reduce, and report Scope 3 work-from-home and commute emissions while reducing spend on sustainability goals.

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