The United States is unique in that the majority of benefits provided by employers are not mandated by law. We are also unique in some of the non-traditional benefits now being offered, like student loan repayment assistance. So to compare worker benefits in the U.S. with those in other countries is like comparing apples and oranges.
One thing we know is that employee benefits are important. There are also valuable. They are valuable to both employers and employees alike. Here are five reasons explaining why:
1. Some Are Mandatory
Although the total number of mandated employee benefits in the U.S. is comparatively small, they still exist. Health insurance is one of them. Under the Affordable Care Act, most U.S. employers must offer their workers a qualifying health insurance plan. In some states, paid family leave is also mandated. There is plenty a value in not running afoul of the law.
2. Value Can Exceed Actual Pay
Next, consider the reality that the value of a given benefit can exceed the amount of pay that goes into covering it. Again, health insurance is a good example. Let us say a company pays $600 per month, per employee, for health insurance. Giving that same money to workers as cash would mean an extra $7,200 in their paychecks. That sounds fine, until one of them has a car accident requiring an extensive hospital stay.
The total cost for that employee's care could easily approach $100,000. That is money the worker does not have to pay. Moreover, the combined employer and employee contributions to health insurance are still significantly less than the total cost of the worker's care.
3. Employees Expect to Receive Benefits
The third reason is the fact that employees now expect to receive benefits. That may not have been the case 30 or 40 years ago, but it is the case in 2019. We have used benefits packages as a recruiting tool for so long that they have become the norm. Attempting to recruit without offering benefits only makes the job harder.
4. Benefits Make a Company More Competitive
Hand-in-hand with employee expectations is the recruiting edge benefits can give an employer. It is all about competing. The more competitive an employer's benefits are, the greater the company's chances of landing top talent. Such is the nature of competition.
If you have two companies offering roughly the same compensation package but different benefits, most job candidates are going to go with the better benefits. Some recruits might even be willing to accept a slightly lower salary in exchange for a better benefits package.
5. Nonstandard Benefits Increase Loyalty
Finally, employees want to work for companies who value them. This is not new. Business owners have long known that their workers will not be loyal if they don't feel as though their employers truly care about them. The question is really just how loyal employers want their workers to be.
The wisest company owners know that nonstandard benefits are one way to increase loyalty. They know that going above and beyond health insurance and a 401(k) plan can make a real difference in making employees feel like they are valued. That's where benefits like flexible scheduling, unlimited PTO, and student loan reimbursement assistance come into play.
It's hard to imagine anything other than an entry-level position not offering benefits in the modern era. Where job seekers are concerned, finding a job is as much about benefits as it is salary. And from the employer's perspective, you need a good benefits package to compete for top talent. That's just the way it is.