What Types of Employee Benefits Are Available?
Broadly speaking, employee benefits – also referred to as "fringe benefits" – can be categorised as follows:
Financial Incentives
Attractive pension schemes and accident insurance are well-established and important benefits that a company can offer. It is also common practice to provide employees with additional financial compensation or supplementary income alongside their regular salary or hourly wage. This may include expense allowances, performance-related bonuses and commissions, profit-sharing in times of business success, or stock options. For employees with children, financial support for childcare can also be beneficial. Larger companies may even offer on-site childcare facilities. Vouchers or discounts on the company’s own products or services can likewise fall under this category.
Physical and Mental Health and Wellbeing
Health – both physical and mental – is rapidly becoming one of the most sought-after benefits among today’s workforce. Many employees place great value not only on physical fitness, but also on their overall wellbeing. It is therefore wise for companies to invest in corporate health management. Investing in employees’ wellbeing has been shown to improve engagement and productivity. Examples include subsidised gym memberships or fitness classes, discounts on health and wellness products, free coaching services, meditation spaces, or quiet rooms in the workplace, among others.
Skills Development and Professional & Personal Growth
Many employers now recognise the value of investing in the development of their employees’ skills and knowledge. Reimbursing or covering the costs of courses, online training, or seminars supports not only the personal growth of individual employees but also strengthens the organisation as a whole. For larger investments, it is common for the company to share the costs, with the employee committing to remain with the company for a defined period. Should the employee leave earlier, they would typically be required to repay a proportionate amount. Another attractive option: providing time for personal projects that may also benefit the company – as exemplified by Google’s well-known model.
Working Hours, Commute and Annual Leave
Offering flexible working hours and locations, along with financial support and incentives, can provide significant advantages for employers aiming to attract top talent. Many companies contribute to commuting costs (e.g. free national or half-fare travelcards, or company bicycles). Modern employers create opportunities for flexible schedules and hybrid working arrangements, and may also offer sabbaticals or the option to purchase additional annual leave.
These Were the Most Popular Employee Benefits Last Year
Generally speaking, the employee benefits offered should align with your company’s culture and employer branding, and further strengthen them. Whether flexible working hours, training opportunities, a gym membership or complimentary beverages in the office – there are many ways to enhance employee satisfaction and drive better performance. The Belohnungsstudie by BONAGO Incentive Marketing Group GmbH regularly analyses which benefits are most commonly used by employers. According to the latest findings, company bicycles and the provision of additional software tools were among the most frequently chosen rewards last year. Eighty-five percent of participating companies offered corporate health programmes. Other widely used measures to enhance employee satisfaction included non-cash benefits (82%) and meal vouchers (58%). Leading the list of 22 specifically examined employee benefits is the home office offer: 93% of decision-makers provided their staff with the opportunity to work remotely.
In the future, electric vehicle subscriptions, fuel and shopping vouchers, as well as multi-purpose gift cards, may gain further popularity.
Boosting Motivation: The Importance of Personalised Benefits
Many companies also offer discounts on their own products. However, a strong alternative to general employee benefits is the provision of individualised incentives. According to the latest Belohnungsstudie, many organisations underestimate the importance of tailored benefits. For example, a younger employee who enjoys backpacking might greatly value a sabbatical, while a parent may prefer financial support for childcare.
The same applies to attractive pension schemes: younger employees are more likely to benefit from such offers than colleagues approaching retirement.
Summary: Why Employee Benefits Matter
The role of HR professionals has evolved significantly in recent years, and today’s HR departments carry more responsibilities than ever before. Still, building strong interpersonal relationships with employees remains the highest priority.
Innovative employee benefits are one of the most effective ways to connect with your staff on a human level. These benefits can make employees feel recognised, improve work-life balance, and enhance personal wellbeing and motivation – all of which are key success factors for modern HR departments.
The benefits a company offers are a crucial factor in an employee’s decision to join – or remain with – an employer. They can ultimately determine whether someone is happy and fulfilled in their role. Of course, not all benefits are relevant or practical for every individual.
Tailoring employee benefits and negotiating individual packages can be time-consuming and resource-intensive. However, it is well worth the effort to understand what your employees truly need most.
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