However, in terms of formal and contractual compensation packages, "employee benefits" means something different from that: It means benefits formally specified and assured in the agreement between the employer and employee, ideally within an employment contract as part of the employee compensation package.
Larger companies, with larger workforces can better afford a number of employee-benefit programs, such as group dental plans. Smaller companies, unable to afford such financial incentives, may compensate by providing other "benefits" that are non-standard, such as flex-time or telecommuting opportunities.
When assessing or comparing a company's offer, it is wise to consider both the company's formal and conventional employee-benefits package and any informal perks it may offer.
Every job has its benefits and costs, and is accepted only when it is believed that the former will be greater than the latter. Hence, in this broad sense, every job provides "employee benefits". However, in the strictest sense, "employee benefits" designates benefits contractually secured, such as enrollment in a company-affiliated group dental plan. A parking space is a benefit in the broad sense, but not an "employee benefit" unless it is contractually specified and assured. A handicapped parking space, where required by law, although of huge benefit, is not to be regarded as an "employee benefit", since it is neither company initiated nor contractually specified.
Employee benefits are part of the compensation package, together with the base salary and performance-based bonuses or stock options. Normally, employer-provided benefits are tax-deductible for the employer and non-taxable to the employee. Typical kinds of benefits include medical benefits, e.g., in-patient hospital treatment and associated charges, generally for the insured employee and his or her dependents. The coverage and benefits may also cover certain out-patient treatment and procedures, such as X-ray or CT scans.
* Life insurance
* Dental insurance
* Physical/mental disability
* Medical leave
* Annual leave
* Maternity/paternity/compassionate leave
* Childcare services
* Meal allowances
* Employee savings and retirement plans
* Paid professional memberships (for some organizations)
Generally, most large companies and virtually all public sector government employers provide an extensive employee benefits package, while smaller organizations tend to offer fewer components in the employee benefits package or just the basic ones. Given the limited resources of the latter, they also expand the benefits package as they grow in size. This is because they are cognizant of the need to attract and retain good employees.
Moreover, the provision of employee benefits helps to improve the working environment for and morale of the employees, who are also able to feel a greater sense of belonging to the organization, rather than as one strictly for monetary returns. Besides these contractual benefits, there are also de facto benefits, such as promotion opportunities, some form of work appreciation or recognition, special accommodation, e.g., day-care or handicapped access ramps. However, in those cases in which the latter categories are not contractually guaranteed, e.g., may be job amenities or governmentally-mandated, they should not be regarded as part of the formal employee benefits package.
Master the art of closing deals and making placements. Take our Recruiter Certification Program today. We're SHRM certified. Learn at your own pace during this 12-week program. Access over 20 courses. Great for those who want to break into recruiting, or recruiters who want to further their career.Take Program Today
Career Research Tool
Use our career research tool to find more than just a list of careers - find the right long term career for you. Explore salary trends for each type of profession, read sample job descriptions, and find the professional and educational requirements for specific careers.Use it Now