What are benefits?


Employee benefits are a type of non-wage compensation that employers give their workers in addition to their salaries or wages.

Employee benefits are a type of non-wage compensation that employers give their workers in addition to their salaries or wages. Benefits are intended to further incentivise workers and can help nurture a productive and invested workforce. Examples of employee benefits include flexible work hours, company-sponsored retirement plans or pensions, bonuses, private health insurance, paid mental health days, private dental insurance and more. Benefits can also include more informal practices as well, such as providing free snacks in the break room, gym passes or planning regular company outings.

History of benefits

The history of employee benefits dates back as far as 13 BCE, when Caesar Augustus gave his retiring soldiers a pension to avoid rebellion. While rebellion may not be a primary concern for employers today, the basis of this practice – keeping employees satisfied – has stood the test of time. Today, benefits are used to attract and retain talent and include a wide range of formal and informal practices and perks.

Recent trends in benefits

During the pandemic, many people had to work while simultaneously juggling the stress and responsibility of caring for themselves and for others, which led to noticeable decreases in productivity, retention, engagement and overall mental health. As a result, many companies have reassessed the benefits they offer their workers in recent years – paying close attention to those centred around care, mental health and flexibility.

Many employers now recognise care as a key component of employees’ productivity and success and, to avoid the lows experienced during Covid-19, have taken appropriate action. According to ‘The Future of Benefits’ report, which surveyed 500 human resource leaders and C-suite decision makers in the US, 57% of senior leaders reported that they would be assigning higher priority to care benefits to better support their employees in work and life – and 63% said they plan on increasing their company’s existing childcare benefits. In addition to care, many employers have implemented mental health and wellness benefits to battle issues like burnout, and have started offering benefits that provide flexibility, such as hybrid and remote work, to support employees regardless of where they are based.

While the pandemic has largely subsided, record inflation and the cost-of-living crisis continue, meaning that many employees are living paycheck to paycheck. Therefore, employers must continue to assess employee well-being in meaningful ways and ensure that each employee is receiving what they may need on a case-by-case basis. This is known as benefits equity and involves taking a personalised approach to each employee’s situation.

Advantages of benefits

  • Employee benefits will attract and retain top talent.
  • Benefits boost morale and productivity.
  • Benefits increase employee satisfaction and promote work-life balance.
  • Ensuring that employees are in good health will decrease the amount of sick leave taken.

Disadvantages of benefits

  • For companies, the disadvantages of employee benefits lie within the rising costs of services such as health insurance.
  • Monitoring and administering employee benefits can be time-consuming and costly.

Use case

Competitive employee benefit packages can have a significant impact on recruitment, retention and employee satisfaction. An example of a company with an impressive portfolio of employee benefits is Meta. Meta offers its employees a wide range of benefits that fall within the broader categories of health and wellness, family, finance and community. While the company has too many benefits to list in full, the following list provides some examples of the benefits that Meta offers its workers.

  • Paid parental leave
  • The option to work remotely
  • Insurance (life/health/dental/vision)
  • Flexible spending accounts
  • Relocation assistance
  • A 401(k) plan
  • Health club membership
  • Childcare
  • PTO and vacation time
  • Sick time
  • Disability income protection
  • Paid cell phone

Some of its more famous features include its laundry service, free meals and the shuttle that takes employees to and from work. While many companies may not be able to achieve the scale of Meta’s employee benefits package, it serves as an example of how companies can take an employee-centric approach that helps employees and their families achieve their professional and personal goals.