In today’s labor market, it’s not enough to offer the bare minimum in employee benefits anymore.
Employee benefits—the additional ways a company compensates workers outside of their base pay—help to attract and retain top talent, increase employee engagement, and improve company performance.
Additionally, job seekers in high demand all but expect to receive standard benefits like health insurance, life insurance, retirement plans, paid time off, plus additional perks—and they’re not looking to settle. So despite the costs, generous benefit offerings are a smart investment to make in your business.
Where the competition lies now is in the fringe benefits a company offers to draw in new talent. A recent survey from Willis Towers Watson showed that 94% of employers believe that voluntary benefits will be important to their employee value proposition in the years ahead.
So if you want to create a benefits program that’s worth the investment—or if you’re updating your existing one—start by looking at the benefits employees want most in 2023 and beyond.
What company benefits do employees value most in 2023?
1. Health insurance coverage
Because of the COVID-19 pandemic, Americans have a renewed desire to take better care of themselves. CVS Health found that 77% of people began paying more attention to their health during the outbreak, while another 50% achieved their health goals during lockdown.
Healthy workers are also good for business. They’re more productive, take fewer sick days, and are less likely to get injured on the job. So, take care of your employees—and thus, your company—by offering comprehensive health insurance plans that cover a variety of medical expenses and needs.
Of course, you don’t have to stop there. With 98% of organizations already offering healthcare coverage of some sort, you’ll need more than just health insurance if you want your company to stand out. If you can afford to, consider offering supplemental health benefits such as:
- Dental insurance
- Vision insurance
- Short-term and long-term disability insurance
- Flexible spending accounts (FSAs)
- Health savings accounts (HSAs)
For more information on health insurance and how it works as an employer, read this comprehensive guide.
2. Flexible hours
Your employees have different needs and preferences when it comes to the way they do their work. While the typical 9-5 work day might work great for half of your workforce, the rest might do their best work from 11AM to 7PM or from 7AM to 3PM.
Offering flexibility in your employees’ schedules allows them to bring their best selves to their work every day. This benefit helps reduce potential distractions, offers greater work-life balance, and ensures workers are well-rested and at their most productive when they login for the day.
And when your employees are well-rested, your company reaps the benefits: one survey found that well-rested managers get an extra four hours of productivity and six hours of focus in a 40-hour work week, while the people who work under them are nearly two times as likely to meet their performance goals and deadlines.
Netflix takes the concept of flexible work to the extreme by allowing employees to choose their own work hours. As long as the work gets done, it doesn’t matter when they show up or for how long.
Take a page from the Netflix playbook and give employees more freedom with their work schedule. If their approach is too drastic a change for your company, consider offering alternatives such as:
- Letting employees choose between working mornings, afternoons, or evenings
- Allowing employees to change their hours slightly and make up the difference at a later time
- Offering part-time work on a temporary or permanent basis for full-time employees who need it
The best part about this benefit is that it doesn’t have to cost your company a single cent—making this an easy (and cost-effective) way to attract and retain employees.
3. Remote work arrangements
Remote work saw widespread business adoption in 2020 following the start of the pandemic, and it’s easy to see why many of them embraced the change wholeheartedly. A survey conducted in 2020 revealed that two-thirds of employees would prefer to work remotely full-time, while less than 2% want to return to the office full-time.
Remote work also lets employees reclaim the time and money they’d otherwise spend commuting. Texas A&M’s Transportation Institute found that commuters in major cities lost between 50 and 82 hours to their daily drive in 2021. Another report, this time from Clever Real Estate, showed that commuters spend about $8,466—19% of their annual income—on commuting each year as well.
Not only does remote work boost employee satisfaction, it helps workers be more productive too. Studies show that businesses lose $600 billion every year due to workplace distractions. Remote workers can help reduce those losses, however, as they’re 35-40% more productive than those who work in office.
If you’re interested in offering remote work options but are unsure whether it will work for your company, start small with a hybrid work arrangement first. Let employees work from home two or three days a week for a quarter, then gauge their interest (and your company’s performance) at the end of the experiment.
4. Paid time off
Offering benefits such as ample paid time off (or PTO, for short) signals that you care about your employees’ work-life balance and quality of life, even if it makes a dent in your bottom line.
The National Partnership for Women and Families found that people who don’t have paid sick days are 1.5 times more likely to go to work with a contagious illness than those who have paid sick days. And as we’ve learned in recent years, allowing illnesses to run rampant in the workplace harms the health of your employees as well as company productivity and employee morale.
There are a number of ways you can use paid time off to increase employee engagement, such as offering:
- Paid time off for specific reasons, such as maternity leave, vacation time, or mental health days
- Additional PTO based on the number of hours an employee works or the length of time they’ve stayed with the company
- An open vacation policy, otherwise known as unlimited PTO
For example, Deloitte offers eligible new parents up to 16 weeks of paid parental leave. This leave can also be used to care for a family member with a serious health condition.
Unlimited PTO in particular can set you head and shoulders above the competition. A 2022 Society for Human Resource Management survey indicated that a mere 6% of employers offer this benefit, even though a truly unlimited PTO policy is a benefit coveted by nearly three-quarters of workers.
5. Retirement benefits
Due to the current state of the economy and an ever-increasing cost of living, many workers worry about their ability to save for retirement.
Northwestern Mutual’s 2022 Planning & Progress study reveals that 43% of Americans don’t believe they’ll be financially ready to retire when the time comes. In fact, 33% of respondents predict there’s a good chance they’ll outlive their retirement savings.
Give your employees peace of mind by offering retirement plans in your benefit packages. There is a variety to choose from, but the most popular small business retirement savings plans include:
- 401(k) plans
- Simplified employee pension (SEP) IRAs
- Savings incentive match plan (SIMPLE) IRAs
To sweeten the deal and make your benefits packages even more attractive to prospective employees, consider adding employer contributions or retirement planning services into the mix.
Matching a percentage of your employees’ retirement contributions is a great way to help your workers save enough to retire comfortably, while retirement planning helps them set retirement goals and understand what they need to do to achieve them.
Take Boeing, for example. The aircraft manufacturer has been recognized by numerous publications, including Bloomberg and US News, for its generous 401(k) plans that offer a dollar-for-dollar match on the first 10% of an employee’s retirement contributions.
Meanwhile, Morgan Stanley found that, for 93% of employees, retirement planning assistance is a deciding factor in choosing where to work.
6. Company equity
Offering employees a stake in your company is one way to increase the total value of your benefit packages while still saving some of your funds for business operations. Company equity is a great strategy for employee retention as well.
Depending on the size of your company, owning equity also encourages employees to do their best work, as their performance can have a direct impact on the value of the business—and therefore, the value of their stocks.
While stock options are a common offering at tech companies and growing startups, companies of all shapes and sizes also offer employees opportunities to buy stock as part of their compensation packages.
7. Professional development and training opportunities
Show you care about your employees by investing in their growth through professional development programs. After all, career advancement and upskilling opportunities were the top non-negotiable for jobseekers in 2022—second only to salary and benefits.
These opportunities, in turn, raise the bar across your organization. Companies that offer formal coaching programs, for example, report benefits such as improved leadership and management skills, employee performance, job satisfaction, and employee engagement.
Some ways small business owners can implement training and development opportunities in their organization include:
- Starting an in-house mentorship program
- Reimbursing employees for professional certifications and industry conferences
- Offering coaching services or leadership training to ambitious mid-career employees
Insurance company Chubb offers an Associate Program to young professionals who are new to the industry. The program includes nationwide training sessions with their peers and organizational leaders as well as mentorship from previous graduates of the program, all culminating in a final presentation for the firm’s senior leaders.
Other unique employee benefits offered by top companies
In addition to the recommendations above, here we’ve compiled a list of creative employee benefits that can help distinguish your company from the competition and highlight who you are as an organization.
8. Four-day work weeks
During the pandemic, the conversations around flexible work schedules and remote work also sparked another debate: the merits of a four-day workweek.
Qualtrics found that nearly all of the employees they surveyed (a whopping 92%) support a shorter work week. Another survey showed that many would go to great lengths to secure a four-day work schedule, including:
- Leaving their current job (74%)
- Working two or more hours a day (58%)
- Giving up free company-sponsored healthcare (43%)
- Giving up unlimited PTO (38%)
Even before the pandemic, experiments in other countries showcased the benefits that a compressed work week could provide.
Between 2015 and 2019, researchers in Iceland tested out a four-day workweek without cutting pay. The results? A dramatic increase in employee well-being, health, work-life balance, and more—prompting the entire country to work toward instituting the change. Meanwhile, Microsoft ran a similar test in a Japanese subsidiary and saw a 40% increase in productivity.
As a result, many companies stateside (including Bolt, Buffer, and Kickstarter) have heeded the news and shortened their own work weeks.
9. Student loan assistance
Excessive debt—and student loan debt in particular—hurts young people looking to achieve life goals such as starting a business, saving for retirement, or even getting married and starting a family. This financial burden can also follow them long after they leave school, with a survey indicating that one in 10 Americans who took out student loans still carry that debt 20 years later.
With the soaring cost of higher education, offering student loan assistance is a great way to attract new talent and support their financial well-being. Professional services firm PwC offers qualifying employees $1,200 a year for student loan repayment, ultimately helping recipients reduce their debt by up to $10,000.
Alternatively, you can offer tuition reimbursement to employees who want to continue their education while working at your company. It’s a win-win situation: Your workers learn important frameworks, skills, and tools to help them move forward in their careers, while the knowledge they bring back improves your company as well.
10. Employee wellness programs
Employees have a harder time at work than they used to: 88% of professionals report higher stress levels in their workplace compared to five years ago, with 51% of respondents saying that stress levels are “much higher” today. And according to a different survey, 58% of employees say that their job is the main source of their mental health challenges.
Offering company-sponsored wellness programs can help mitigate these issues and many others. Wellness programs are designed to improve and maintain the overall well-being of a person—physically, mentally, emotionally, and financially.
According to Statista, 83% of employers in 2019 believed their company’s wellness program made a positive impact on the health of their workforce. A similar number of respondents (84%) felt their programs improved employee productivity and performance.
With the abundance of wellness products and services available today, it’s easy to find a mix of perks that best supports your employees. Consider the following for your own benefits program:
- Meal prep services
- Onsite fitness classes
- Memberships to local gym facilities
- Mental health offerings
- Stress management workshops
- Financial education programs
- Meditation app subscriptions
- Onsite massage therapists
- A well-stocked kitchen of healthy food options
In addition to unlimited PTO, software company Asana provides employees with mental health coaching, nap rooms, daily yoga programs, free gym memberships, an in-house culinary program, and wellness workshops.
11. Sabbaticals
Have you ever wanted to take a few weeks off from work to pursue a passion project or cross something off your bucket list? Well, companies are listening—and they’re implementing paid sabbaticals in their benefits packages as a result.
Think of a sabbatical as paid time off, but for a consecutive number of weeks rather than a few days here and there. A practice that originated in academia, employers are now using sabbaticals to reward employees who stay with the business by giving them several weeks to do whatever they want.
For instance, qualifying employees at The Cheesecake Factory can take three weeks off after reaching their five-year mark with the company.
Employees who take sabbatical leave can use this time to travel, start or nurture a new business, try out new hobbies, spend time with loved ones, or even just enjoy their free time at home.
When they come back, they may bring new perspectives and strategies to improve the organization—or, at the very least, a renewed sense of fulfillment and motivation. And while they’re gone, younger employees have a chance to learn new skills and take on new projects they might not have otherwise.
12. Childcare assistance
The Bureau of Labor Statistics found that both parents work in 62% of US households with children—which means that the rising cost of childcare is an issue that many working parents face. In California, for example, the average annual cost of care for one infant is $16,945—1.5% more than the average cost of rent and about 24.9% of a median family’s income.
So, it’s little wonder that 69% of women with children ages five and under who are currently seeking employment are more likely to choose an employer that provides assistance with child care or the resulting expenses.
Support the working parents that help make your business a success by offering care stipends for employees with children or other dependents. Alternatives include reimbursements for backup care when standing arrangements fall through, onsite daycare services, or even something as simple as allowing parents to bring their children to work when they need to.
Personal finance giant Intuit gives employees with children several options for child care assistance: backup child care, discounts for ongoing child care, and FSA accounts for qualifying care-related expenses.
13. Giving back to the community
Younger employees are big on giving back to the community: A Deloitte report showed that Gen Z and millennials are more likely to stay with their employer for more than five years if they are satisfied with the company’s societal and environmental impact.
So, another way to attract bright, young professionals is by offering opportunities for them to volunteer and support their community. Google—a company well-known for its dedication to offering the best of the best in employee benefits—offers matching contributions for employee donations as well as time off to volunteer.
Do something similar by offering donation matching, yearly allowances of paid volunteering time, or company-wide community service events.
14. Company-specific benefits
One benefit resource many employers overlook is their own business. Let us explain: Chances are, there are unique things that set your company apart from its competitors, plus a set of values you hold yourself and your workforce accountable.
These are great areas to draw on for inspiration. After all, if you’re doing things right, these are also the things that drew your employees to the business in the first place. Why not use them to your advantage when creating your benefits program?
One way to do this is by offering free products or services, or special discounts on your offerings, to your employees. For inspiration, take a look at the benefits offered by the companies below—and notice how they’re tied directly to the identity of their organization:
- Penguin Random House’s free book program
- Ben & Jerry’s free three pints of ice cream per day
- Airbnb’s annual travel stipend to use toward any Airbnb listing
If your company doesn’t have offerings that appeal to the average employee—say, for example, if you’re in the business of B2B fintech—or if you’re strapped for cash, consider choosing perks that align with your company values instead.
Music app developer Smule emphasizes the importance of “connecting the world through music.” And with benefits like impromptu employee jam sessions (complete with provided instruments!) as well as quarterly karaoke parties, they use music to build connections between their employees too.
As a small business, you may not be able to offer extravagant benefits on par with the world’s top organizations. But when you put thoughtfulness and care into the ones you do choose, your appreciation for your employees and the work they do will become clear.
15. Employee perk stipends
Admittedly, it’s not easy to create a benefits plan that’s personalized for each employee. Even offerings like health insurance may not completely cover all of your workforce’s needs, and some benefits (like employee assistance programs or pet insurance) will obviously cater to certain employees over others.
However, there’s an easy way around this issue: employee perk stipends, also known as lifestyle spending accounts or perk allowances.
With this benefit, companies can allocate a certain amount of money each month toward certain spending categories, such as health and wellness, food, experiences, and continuous learning. Employees can use those funds toward any purchases they want in those categories. This makes it much easier for employers to custom-fit their benefits packages across the entire organization.
No longer will you need to decide between benefits that support one demographic of your workforce over others, or consider the impact those choices will have on your workers and employer brand. With a perk stipend, you put the decisions into the hands of your employees.
Putting your small business employee benefits plan into action
At the end of the day, the best employee benefits you can offer are those that support the needs of your workers at every stage of their life and career. And because every business is different, it’s up to you to find out which perks your employees want most.
To do so, get feedback on the benefits they would most like to receive (Google Forms surveys and town hall meetings are a great way to do this), and take this information into consideration when building out your benefits program.
Once you’ve hammered out the particulars of your employee benefits program, Gusto makes putting it all together a breeze. Work with one of our benefits advisors to set up health insurance, dental and vision coverage, 401(k) plans, and more. Get started by creating your account today!
