What's in a Comprehensive Employee Benefits Package?

Offer these components to attract and retain the best employees

In addition to a competitive salary, an employee benefits package is a standard and expected part of an employee total compensation package.

Smaller employers tend to offer fewer components in the employee benefits package—and sometimes, no benefits at all. However, the majority of large companies and virtually all public sector government employers provide an extensive employee benefits package.

Small businesses that are growing and expanding need to plan a careful phase-in of employee benefits so they can continue to attract and retain talent for further growth and expansion. Employers can expand this employee benefits package, as resources allow.

Employers can customize an employee benefits package to the needs and desires of its employees, but there are several standard offerings that should be included.

Health Insurance

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Health insurance is the foundation of any comprehensive employee benefits package that employees want and need, and it is the preferred employee benefit of the majority of people who work.

Quality health insurance marks an employer as an employer of choice when desirable candidates select job opportunities. If you can afford to offer only one employee benefit, make that benefit health insurance for employees and their families. They'll be grateful.

Paid Time Off (PTO)

No comprehensive employee benefits package would be complete without employer paid time off from work. As part of an employee benefits package, employers provide a variety of options for PTO that are classified in ways that make sense for employers and employees. Types of PTO that regularly appear in an employee benefits package include:

For reasons that include simplicity and a lack of desire for employees to account for time off, an increasing number of employers are moving toward utilizing PTO policies that eliminate separate classifications.

Short-Term Disability Insurance

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Short-term disability insurance ensures that employees will still receive a percentage of income if they cannot work due to sickness or a disabling injury. Short-term disability insurance, as part of a comprehensive employee benefits package, is recommended.

Long-Term Disability Insurance

Long-term disability insurance (LTD) is an insurance policy that protects employees from loss of income if they are unable to work due to illness, injury, or accident for a long period of time.

Some estimates state that the average employee with a long-term disability misses 2.5 years of work. Others estimate that an employee has a one in five chance of becoming disabled and unable to work for a period of time.

Long-term disability insurance is one of the most significant components of an employee benefits package.

Dental Insurance

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Various dental insurance plans are available for employers to offer as part of a comprehensive employee benefits package. Dental insurance plans are designed to help cover the costs employees experience in obtaining necessary dental care, both preventative and emergency.

Dental insurance is often available from the employer's health insurance carrier at reduced rates.

Vision Insurance

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Vision insurance is often an optional addition to a comprehensive health policy. It pays for employees to have regular vision examinations and pays for a percentage of the cost of corrective equipment.

Life Insurance

Life insurance provides an appreciated safety net for employees and their families.
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Life insurance is an appreciated component in a comprehensive employee benefits package. Sought-after employees expect life insurance as a component in an attractive employee benefits package.

401(k) or Other Retirement Plan

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Competitive base pay, health insurance, and a 401(k) plan are the must-have benefits necessary to attract and keep talent in your company.

According to a study by Watson Wyatt Worldwide, related in "The Human Capital Edge: 21 People Management Practices Your Company Must Implement (or Avoid) to Maximize Shareholder Value," companies that emphasize better employee benefits packages and use them to attract and retain high-caliber staff add 7.3% in additional profit to their bottom line.

Health Care Flexible Spending Accounts (FSAs)

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As health care premiums continue to increase at a rapid rate, employers are continually shifting costs to employees in the form of higher co-payments, deductibles, and out-of-pocket costs. To help offset some of the sting associated with these higher out-of-pocket expenses, many employers are implementing Health Care Flexible Spending Account (FSA) plans.

An FSA plan allows employees to pay for certain unreimbursed healthcare and dependent care expenses with before-tax dollars.