The Importance of Employee Benefits in the Employment Process


Employee benefits took off after wage caps during World War 2 limited what employers could pay to employees while competition for employees exploded.

Employers start offering health insurance and other ​employee benefits​ to sweeten the deal and attract talent.

Now, benefits often rival pay as factors people consider when choosing a job. Let’s discuss the importance of employee benefits in the employment process.


Benefits as a Recruitment Tool

Your company needs to meet industry norms when it comes to benefits. If you offer somewhat higher pay that doesn’t offset the industry-standard benefits you don’t provide, working for your company is seen as a pay cut, so you’ll have trouble recruiting people.

You’ll stand out when you offer unusual employee benefits since this is something that gets talked about in the news. For example, Big Tech firms from Silicon Valley compete for talent by offering fun, weird and useful benefits no one else does.


Benefits as a Retention Tool

Education benefits improve employee loyalty and productivity while keeping them with the firm. When you offer education incentives that help them earn higher degrees or certifications, they feel like the company is investing in them.

When you tie the education benefits to someone working for you for a certain number of years, you maximize the odds they’ll stay with you that long to avoid repaying the educational benefits.

Give employees advice on how to utilize on-site resources like the recreation center or cafeteria as they change. This improves retention because you’re showing employees how to use the new or evolving benefits you offer.

Another matter is informing people how to sign up for employee assistance programs when they need it. You could avoid the need to fire someone for drug or alcohol use if they get help early on.

Today’s employee benefits programs have become a way to retain talent while making others feel valued, and they increase the odds they are engaged with the company.


The Contribution of Benefits to Productivity

When employees feel supported by the company, they become more loyal. A tailored selection of employee benefits can improve employee productivity as well.

For example, offering employee discounts at local daycare centers may be attractive to parents, while emergency childcare services reduce employee absenteeism. Providing similar services for adult care helps older employees taking care of their own parents or special needs children.

The biggest mistake many companies make is failing to streamline the enrollment into benefits programs for their new hires.

New hires may be familiar with the steps to fill out tax forms, while Payroll or Human Resources is there to help them set up the right level of tax withholding and automatic deductions. Your company needs to provide equal levels of support when people are enrolling in your health insurance plan and childcare benefits.

When you provide this type of hand-holding to new hires, they’ll become engaged more quickly with the company and come up to speed sooner.



Employer benefits are a great recruitment tool and they can improve worker productivity in a variety of ways.

So, make sure that you consider offering attractive packages to prospective and current employees if you want to improve employee retention and engagement.

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