A Guide to Employee Benefits

A Guide to Employee Benefits
Give your employees benefits they value

What are employee benefits?

Employee benefits are any kind of non-wage compensation that supplement an employee’s salary. These benefits can include everything from free food to private health insurance. They have become an essential part of any competitive employee benefits package.

Employee benefits aren’t merely add-ons to a worker’s salary. They can add real value to how staff perceive you, improving recruitment and retention. They make your business a happier place for staff to work.

Employee Benefits

Why do employee benefits matter?

Employee benefits are not necessary. You can pay your employees their basic salary and not offer them any more than that. But, by offering a good employee benefits package, you will attract more talented staff and help retain those you already have. It will also help to improve your employer brand and create an image of a caring business.

Check out our blog on How to Write a Job Advert for more information.

What if we don’t offer employee benefits?

Your company may be small, and you need to keep costs down. Although not offering benefits may save you money in the short term, it may be hindering your growth. Without a good employee benefits package, you could risk a higher staff turnover. 69% of employees revealed they are more likely to stay with an employer who offers a good benefits package. This means you will spend more time and money recruiting and training new staff.

Benefits of Employee Benefits

Employee Retention

Every time someone leaves your business, you’re left with the costs of hiring a new employee. It also means a loss of productivity in the meantime. Keeping staff happy and engaged is difficult. Having a good employee benefits plan in place can encourage staff to remain at your company. Reward schemes make sure employees are recognised for their hard work, so it encourages greater employee performance and ultimately business growth.
Employee Benefits

Attracting Talent

It’s hard enough finding the right people to fit your job role and business. Although salary is a big consideration to an employee, they also rank benefits as one of the top three considerations when looking for a job. Make sure your benefits package matches/exceeds your competitors so gain the attention of your potential candidates.

How to create an employee benefits plan

Managing employee benefits is an important and costly endeavor for employers. It takes a lot of time to plan a benefits package that’s suitable for the company. You need to be strategic about what you offer. Creating an employee benefits package can have a great impact on your employee’s health, wellbeing, and satisfaction at work. But you need to plan the benefits you’re prepared to offer with certain conditions so they’re not misused.

Types of Employee Benefits
  1. Pension
    You pay in a set amount per month, and so does the employee. When the employee retires, they get this pot of cash. The amount received will be based on how much has been paid in, how well investments have done, and how they decide to take it (lump sum or regular payments).
  2. Share schemes
    You give the employee shares in your company, or you match any shares they buy in the company. The benefit helps to build loyalty and gives your employees an interest in the business beyond their job.
  3. Travel loans
    You offer staff interest-free travel loans so they can buy annual tickets for their commute (which is usually cheaper than paying for monthly ones). It reduces the cost of their transport.
  4. Maternity/paternity pay
    As an employer, you will be liable to pay the statutory minimum. If you offer more, you could retain your skilled workers e.g. keep them on full pay for the entire period. You can introduce clauses in the employment contract where an employee will have to pay back that extra money if they don’t return to work or leave within a certain period of time after maternity ends.
  5. Bonuses
    These benefits are most commonly based on productivity or targets. If an employee hits a certain target, they are given a monetary bonus. It could also be based on attendance, customer service, quality, or individual performance.
Health & Wellbeing
  1. Private medical insurance
    This entitles your employees to have private medical treatment in the event they are injured or ill. If workers are sick, they won’t be working productively. Offering health insurance means your employees will feel like you care about them and it will reduce days being lost due to sickness.
  2. Dental and optical insurance
    Another benefit to help staff stay in good condition. This helps employees handle their dental and optical costs. Healthy staff are happy staff.
  3. Sick pay
    Staff are entitled to Statutory Sick Pay which you are legally obliged to provide. You can choose to offer occupational sick pay where you pay more than the allowance or allow staff to claim sick pay for longer.
  4. Duvet days
    Everyone has those days where they’re not sick, but simply don’t have the motivation to go into work. These are built into the annual holiday allowance and means the worker can take a day off (not a sick day nor annual leave). You reduce your sick days and the employee feels like they are being treated with respect.
  5. Flexible working
    More and more staff are wanting to work flexible hours. Whether it’s starting late or finishing early or setting their own hours. Flexible working allows staff to fit work in with other commitments. It also allows staff the chance to choose where they work and can help promote work/life balance.
  6. Gym membership
    Some employers offer free membership; others offer membership at a discounted price. Both options can help to play a big role in your employee’s health and wellbeing, as well as reduce sickness absenteeism.
  1. Childcare vouchers
    If your staff have children, then this benefit can be very attractive. Childcare is very expensive, so vouchers can save parents a substantial amount of money. Employees can exchange part of their salary for vouchers and they are tax and national insurance exempt.
  2. Day off on birthday
    This benefit is great for morale and psychological health. You’re letting your employee celebrate. It shows you care about them more than just their work output.
  3. Beer Fridays
    Although beer may kill productivity, it can boost engagement and help wellbeing. It encourages employees to come into the office which can have a positive effect on teamwork and staff morale.
  4. Dedicated development days
    Training programmes need time and resources. Setting regular time aside for career development can lead to positive change within your organisation. Self-learning can spread!
  5. Rewards
    Everyone likes to be rewarded. Acknowledging the hard work done makes us feel good. You could try employee of the month and offer a bottle of wine or a bunch of flowers (select gifts relevant to the staff to boost engagement).

Things to Consider


You need to decide what you can afford to give your employees. With every benefit there is a cost implication. The more cost effective and beneficial, the better.


Measure the success of the benefit once you put them in place. You can then decide to remove them if they offer no value. Not all benefits will motivate staff. You need to study to see what works best. It may depend on the age of your employees e.g. millennials who are taking their early steps on the career ladder and don’t have children to worry about probably won’t care too much about childcare vouchers.

Examples of employee benefits:

  • Pensions
  • Eye care vouchers
  • Discounts & rewards
  • Employee recognition programmes
  • Work from home schemes
  • Private dental insurance
  • Gym membership
  • Private health insurance
  • Childcare vouchers
  • Career advancement opportunities
  • Tuition reimbursement
  • Company away days
  • Retirement benefits
  • Free/subsidised travel
  • Profit sharing
  • Company cars
  • Hotel stays
  • Free refreshments at work
  • Free fruit
  • Lunch allowances
  • Financial advice
  • Life insurance
  • Casual dress
  • Company events
  • Flexible working
  • Unlimited holiday allowance
  • Pets at workdays
  • Volunteering days
  • On-site parking
  • Paid parental leave
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