Types of employee benefits, and which full time employee benefits are actually expected
- Benefits cost per employee a year
- $11,900
- Per employee a month
- $991.67
- As a percent of base salary
- 19.2
The numbers on this page come from the inputs you enter and the method stated: 3,600 seconds to an hour, 52 weeks to a year, twelve months to a year, and nothing else. No industry shrinkage figure, no occupancy benchmark and no assumption about your attrition; every one of those is yours to enter.
Benefits divide into four groups that behave completely differently in a budget, and most benefit lists mix them up. There are the ones effectively required of an employer of your size and in your states. There are the ones a candidate expects and does not notice. There are the ones that vest and therefore do something for retention. And there are the minority benefits, valuable to the people they fit and invisible to everybody else. This page sorts the common types into those four and says what each group is for.
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Group one: effectively required
Some cover is mandated for employers above a size threshold, some is mandated by particular states, and some is not mandated but so universal at your size that not offering it removes you from consideration. This group is not a decision, it is a cost of operating, and it belongs in the plan as a per-employee figure rather than in a benefits discussion. Know which of your obligations are federal, which are state, and which are market convention wearing the word required.
Group two: expected, and invisible once you have it
Health cover at most sizes, paid time off, a retirement plan. These win nothing at offer stage because every comparable employer has them, and they cost a great deal. They still have to be competitive, because being visibly below the market is a real disadvantage while being above it buys almost nothing. Spend to the market here and spend your differentiating money in group three.
Group three: the ones that vest
Anything that accrues, vests or grows with service is the only group that does anything for retention, because it makes leaving cost something. Employer retirement contributions with a vesting schedule, service-linked leave, an ownership arrangement. If retention is the problem you are trying to solve, this group is the answer and the other three are not, however good they look in a job advert.
Group four: the minority benefits
Childcare support, fertility cover, student loan help, pet insurance, caring leave. Each is valuable to the share of your workforce it fits and worth nothing to the rest. That is fine as long as you know the share before you buy, and it is how a benefits budget accumulates expensive items that most people do not know exist. Ask your own people which of these they would use, and buy the ones with a real internal constituency.
Will it do what you need for Types of employee benefits?
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Types of employee benefits: common questions
What are the main types of employee benefits? Sorted by what they do rather than what they are: effectively required cover, expected benefits that win nothing but cannot be below market, vesting benefits that actually help retention, and minority benefits valuable to the share of people they fit.
Which full time employee benefits are expected? At most sizes, health cover, paid time off and a retirement plan. Expected means candidates notice their absence and do not notice their presence, which is why spending above market here rarely returns anything.
Which type helps retention? The ones that vest, accrue or grow with service, because they give leaving a cost. Most other benefits stop working the moment they are taken for granted, which is a few months after the start date.
How should the four groups appear in a plan? As one cost per employee, totalled, beside the roles and headcount they apply to. Benefits are the part of compensation that grows by accumulation of small decisions, and the only defense is a total somebody reads once a year.
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