Benefits are a form of compensation paid by employers to employees over and above the amount of pay specified as a base salary or hourly rate of pay. Benefits are a portion of a total compensation package for employees. A comprehensive, common set of benefits includes:
- paid time off such as PTO, sick days, and vacation days,
- health insurance,
- life insurance,
- dental insurance,
- vision insurance,
- paid prescriptions,
- retirement benefits: 401(k) plan or a pension,
- flexible spending accounts,
- long term disability insurance, and
- short term disability insurance.
In addition to these basic benefits, employers might offer relocation assistance, legal assistance, child care benefits, employee discounts, and more. See: Getting the Best Benefit From Your Benefits? for a comprehensive list of benefits.
Employee Appreciation of Their Benefits
In the United States, on average, organizations spend 43 cents for benefits for every dollar of payroll. Research reported in the journal, Personnel Psychology, suggests that employees only understand and appreciate between 31 and 68% of the cost or market value of the benefits they receive from their employer.
Employees undervalue their benefits for many reasons including:
- employers communicate the value of the benefits poorly and infrequently,
- the employees have little or no choice in selecting benefits packages or options, and
- the employees misunderstand the market value of their benefits and the additional cost of their compensation package to employers.
For employees to understand the value of the benefits they receive, employers must educate employees and family members and provide benefits statements that share the true cost of the benefits.
More Information About Benefits
The Bureau of Labor Statistics offers information and statistics about benefits.
Disclaimer – Please Note:
Susan Heathfield makes every effort to offer accurate, common-sense, ethical Human Resources management, employer, and workplace advice both on this website, and linked to from this website, but she is not an attorney, and the content on the site, while authoritative, is not guaranteed for accuracy and legality, and is not to be construed as legal advice.
The site has a world-wide audience and employment laws and regulations vary from state to state and country to country, so the site cannot be definitive on all of them for your workplace. When in doubt, always seek legal counsel or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct. The information on this site is for guidance, ideas, and assistance only.