What types of employee benefits are most appreciated among the different generations in the workplace? That’s what we’ll take a look at in this article that’s based on a recently released study on employee benefits. The study was done among more than 19,000 participants from 61 organizations and its results were published in the Employee Happiness Index 2019.
What are employee benefits?
What are the four major types of employee benefits?
Employee benefits every HR practitioner should know
Types of employee benefits among the different generations
What are employee benefits?
Employee benefits cover the indirect pay of your workforce. This can be health insurance, stock options, or any myriad of things offered to employees. While two jobs can offer the exact same salary, they can vary greatly in terms of benefits, hence making one offer a better financial proposition than the other. This highlights the importance of employee benefits in a job offer.
Some employee benefits are country-specific. In the US, for instance, health insurance is a key component of employee benefits packages and in France, many employees get restaurant vouchers for every workday.
Providing fair, performance-based compensation is an inextricable part of human resource best practices. Compensation and benefits go together, with the former covering your employees’ salary. For an in-depth article on this key element of Human Resource Management, check out our full guide on Compensation and Benefits.
What are the four major types of employee benefits?
Traditionally, most benefits used to fall under one of the four major types of employee benefits, namely:
- Medical insurance
- Life insurance
- Retirement plans
- Disability insurance
Nowadays, however, the list of employee benefits continues to grow. We’ll take a look at different examples of employee benefits below.
Types of employee benefits every HR practitioner should know
In its 2019 Employee Happiness Index, HR tech company Benify distinguishes 4 categories of employee benefits:
- Benefits at work
- Benefits for health
- Benefits for financial security
- Lifestyle benefits
Benefits at work
This includes working hours & leave, skills development, food & beverage, and employee clubs, activities & gifts.
Working hours & leave
Think of flextime here for instance. Flextime gives your employees the possibility to decide about their working hours and/or the location they want to work from. Other examples include additional holidays and, one of the other benefits employees value most, paid parental leave.
Rapid technological developments and the fact that people change jobs more often make skills development more important too. Skills development, however, is not just an important benefit for (younger) employees, it’s also essential for organizations if they want to remain competitive.
Food & Beverage
We already mentioned the meal vouchers in France. Other benefits that fall into this category include free lunches, fruit, and coffee. At AIHR, we get to enjoy a free lunch every day and it’s something that’s very much appreciated by the team. As an added bonus, free lunch and fruit are also a good way to promote healthy eating habits at work.
Employee clubs, activities & gifts
There are heaps of possibilities when it comes to this category of the employee benefits package: knitting clubs, running groups, (video) game nights, Secret Santas, anniversary gifts, you name it.
Benefits for health
Think of health and wellness and healthcare here.
Health and wellness
More and more companies have employee wellness programs. The possibilities are endless and examples of employee wellness programs vary from a simple gym membership to full suite solutions that include physical, mental and financial wellness.
Healthcare benefits also come in different shapes and sizes. Think of physiotherapy and chiropractic sessions, for instance, but sometimes fertility treatments and psychological support can also be included.
Benefits for financial security
The number one thing here are pension plans. Other benefits for financial security are insurances, financial benefits for employees, and personal finance benefits.
Interestingly, according to the research study, pension plans are considered as a very important benefit by every generation, but they’re not among the top ten most appreciated benefits.
As we mentioned above, in some countries health insurance is something that comes with the simple fact of being an employee. Other types of insurance benefits for employees cover parental leave or injury.
Think of commissions, bonuses and the possibility for employees to buy shares of the company they work for.
Personal finance benefits
The Benify report too shows that stress about personal finances has grown bigger over the past year. Yet another reason for employers to seriously start thinking of benefits such as advice about loans and savings. In other words: employee financial wellness.
Lifestyle benefits consist of work-life balance and mobility.
As employees increasingly attach importance to their work-life balance, it’s no surprise that benefits in this area become more popular too. Examples are childcare, grocery delivery, and legal services.
Mobility benefits can make your employees’ life a lot easier. Because even if they can work from home or elsewhere, they’ll still have to come into the office – or workplace – regularly. This category covers things like public transport and cars but also bicycles and carpooling.
What types of employee benefits are most appreciated among the different generations?
Different generations of workers (often) want different things. We’ve already seen this in our article about generational differences in the workplace.
As each generation is in a different stage of their lives, it’s no surprise that they tend to appreciate different types of employee benefits. After all, young Millennial parents have other priorities than a close-to-retirement Baby Boomer, right?
The Benify study separates employee benefits into two categories: those that employees find most important and those they most appreciate. Let’s see what the overview looks like per generation.
Two things immediately stand out when we look at what benefits people find important. The first and perhaps the most obvious one is the fact that pension plans gain in importance as the generation gets older. This is something that makes sense as graduates who just entered the workforce probably won’t be thinking about their retirement in 40+ years yet…
The second thing worth noticing here is skills development. Unsurprisingly, the development of new skills is more important for younger generations – as they will be more affected by technological developments – than it is for Baby Boomers.
Something that’s important for all employees, regardless of their age, and that tops almost every list, are working hours and leave.
When we look at the benefits that are most appreciated by employees, the top 5 per generation looks slightly different. All of a sudden things like food & beverage and mobility pop up on various lists. The number one among pretty much every generation, however, is health & wellness.
It’s interesting to see that financial wellness is something that the youngest generation in the workforce, Generation Z, has in its top five. As companies will increasingly hire people from Generation Z, financial wellness will probably become a more important employee benefit.
Well, there you have it, 12 types of employee benefits every HR practitioner should know. The days where employee benefits packages offering health insurance and a basic pension plan were enough to get candidates working for you are over. Today’s candidates and employees expect benefits at work, benefits for their health, financial security and work-life balance. If you want to get a competitive edge, you need to make sure to choose the best employee benefits that fit your workforce.
You can download the full report for free here.
Employee benefits cover the indirect pay of your workforce. This can be health insurance, stock options, or any myriad of things offered to employees.
Traditionally, most benefits used to fall under one of the four major types of employee benefits, namely: medical insurance, life insurance, retirement plans, and disability insurance.
Benefits that employees value most include flexible hours, the opportunity to work from home, vacation time, and paid parental leave.
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