17 Employee Benefits That Are Actually Worth the Investment

Kombucha on tap. Pet insurance. Fully paid health plan premiums. 

As a small business owner, how can you even compete with company fringe benefits like that? By being picky about the employee benefits your team will actually care about—and canceling the ones they won’t. 

Financial benefits are key

The average American isn’t exactly swimming in cash. COVID-19 has created acute financial stress and plunged millions of Americans into poverty, but even before the pandemic, surveys demonstrated that sixty-nine percent of employees were stressed about money, and 39 percent of households didn’t have enough savings to cover an unexpected $400 expense.

These numbers especially apply to millennials, who now make up the largest segment of the workforce. Since coming of age, they’ve struggled with stagnant wages, a shortage of affordable housing, and the crushing weight of student loan debt. Only one-third have saved for retirement, and with the shift away from pension plans, many may never be able to stop working. 

Bottom line: If you’re a small business owner, all this data means you should prioritize benefits that strengthen your employees’ financial wellbeing. Then, consider rounding out your compensation package (which may or may not include profit sharing or stock options) with meaningful, low-cost lifestyle perks. 

1. Financial tools that help with unexpected expenses

Most Americans experience financial stress—surprisingly, even workers who earn between $100,000-$150,000 a year. Almost half of American employees said that financial challenges cause them the most stress in their lives, pointing to a lack of a rainy day fund as the biggest source of that stress. In our unpredictable world, it’s becoming increasingly difficult—but also increasingly necessary—to save for emergencies.

Help employees handle surprise expenses and put their paychecks to work by using a payroll service that provides free access to funds between paydays. Services like these can help protect employees from credit card late fees and overdraft charges and build their long-term financial resilience.

2. Health insurance

Around 79 million Americans struggle to cover the cost of healthcare or have medical-related debt. Find a healthcare benefit plan that works for your employees, and your budget. There are plenty of affordable options for medical coverage, dental insurance, and vision insurance.

3. Workers’ compensation

Accidents suck. And not being insured for them sucks even more. That’s why you should get workers’ compensation insurance even if it’s not required in your state. 

Workers’ comp has your (and your employee’s) back when they get hurt on the job. Generally, policies cover wage replacement for the injured employee, as well as medical bills and vocational rehabilitation. 

Cost depends on a variety of factors, including the size of your team, claims history, and industry, but averages around 1.4 percent of an employee’s compensation. 

Even if your state doesn’t require you to offer coverage (check the rules here), it’s a smart investment—for the health of your employees and your business. 

4. HSAs and FSAs

Even when you offer benefits that include with a robust plan, sometimes conventional health insurance coverage isn’t enough. Give your employees a tax-free way to pay for medical expenses like prescription drugs by looking into health savings accounts (HSAs) and flexible spending accounts (FSAs). 

Though just one letter apart, they function quite differently: HSAs are organized by employees, and FSAs are organized by employers. You can offer FSAs alongside a health insurance plan, or as a standalone health benefit. Administering an FSA is affordable, and you won’t have to pay payroll tax on employee contributions, which are taken from pre-tax dollars (read: this could actually save you money!).

5. 401(k) plans

Almost half of Americans aren’t saving enough for retirement. And while you can implore your employees to open individual retirement plans, the reality is humans are pretty bad at saving for an event that’s decades away. 

To truly help your team (someday! hopefully!) afford to retire, offer a 401(k) plan that automatically funnels money from their paychecks into a retirement savings plan. Their contributions are tax-deductible, and as the employer, you can claim several tax credits for offering retirement benefits.

6. Identity theft protection

It seems like every other week there’s some massive security breach that reveals our data to hackers on the other side of the world. To show that you’re keeping up with the times—and are concerned about your employees’ cybersecurity—offer free enrollment in a credit monitoring program. 

According to a survey by Willis Towers Watson, 36 percent of employers already include identity theft protection as a voluntary benefit. Given that dealing with identity theft takes an average of 16 hours per incident, you can consider this an investment in employee productivity, too. 

7. Student loan assistance

Education-related debt is a looming challenge for many college graduates. Consider helping employees pay off their student loans. 

Creative types of employee benefits

8. Flexible work options

Some experts say employee burnout is responsible for up to half of annual turnover. Adopt a paid time off (PTO) policy that would incorporate sick leave and vacation time. Also keep stress at bay by allowing your team to build the work schedule that jives with their lifestyle. That includes the ability to work when and where they want.

Not only does flexibility promote a healthy work-life balance, but some studies even show that employees are more productive on the couch than at their desks. Of course, remote work is mostly meant for companies that don’t serve customers at a physical location. But even if you face more scheduling constraints than other businesses, you can still find small ways to build flexibility into the workplace. (Making it easy to swap shifts, for example.) 

9. Perks for families

Since juggling work and family is no easy task, acknowledging that it takes a village will set your business apart. Consider offering perks that help not only employees but also their dependents and other family members, including children, partners, and parents. 

10. Volunteer time

Want to encourage employee altruism while also supporting your community? Nearly one-quarter (24 percent) of companies give their employees PTO specifically for volunteering. Doing so will create a culture of giving back (and generate plenty of warm fuzzies). 

11. Seasonal activities

An easy and affordable way to keep things exciting in your office—even during the doldrums of, say, February—is to offer activities that coincide with the season. If you make a successful event into an annual occurrence, your employees just might look forward to it all year long. 

12. Office environment

No cold-brew coffee or elaborate floral displays in your office? Don’t sweat it. What matters most is that your team feels comfortable. Even if you’re stuck with fluorescent lighting and cubicles, a few small steps can take your space from drab to delightful.  

13. Peer recognition

Here’s a clever (and virtually free) way to reward top performers: Ask employees to recognize each other. Not only is it a stronger motivator than rewards delivered from managers, but it could help improve relationships across your team.

14. Health and wellness

Cue the down dogs. To really show you care about the health of your workforce, don’t just offer health insurance—go the extra mile for them too. More than two-thirds (69 percent) of companies with 50+ employees now offer wellness programs. Some even offer employee assistance programs to provide support for helping to manage personal problems to improve mental health and overall well-being.

Luckily, it’s affordable for small businesses to promote healthy workplaces, too. In fact, wellness programs have the potential to save money from lowered healthcare costs, increased productivity, and tax incentives.

15. Professional development opportunities

Every good employee wants to expand their skill set. And since investing in career development can benefit your business, finding innovative, low-cost continuing education strategies is a win-win. 

16. Free snacks

Hanger is a real thing—and growling stomachs can stifle productivity, too. So join the 32 percent of companies who provide free, healthy snacks that feed their team’s body and mind. While it might seem like small potatoes (or potato chips), one survey found that providing snacks really does boost employee happiness.   

17. Employee discounts, rewards, and freebies

The only thing people love more than a deal? Free stuff. 

Branded swag can increase team pride, incentivize employees, and spread the word about your products or services while your team is out and about. When combined with discounts and rewards, you’ve got a perk that will please literally anyone. 

Kick these employee benefits into action

Your small business employee benefits package says a lot about you, your human resources team (if you have one), and your company culture: what’s valued, what’s rewarded, whether you think outside the box. With many people struggling to get by, and many businesses struggling to attract top talent, your choices matter more than ever.

Spend some time figuring out which mix of financial and lifestyle benefits would best serve your team and improve overall employee satisfaction and retention. Keep in mind the challenges your particular full-time employees face, think about your part-time team members (if you want to offer benefits to them), and consider the peace-of-mind and loyalty that extra financial security could bring. Then focus on your benefits administration—and watch the thank-yous (and talent) roll in.