As a bonus to their monetary compensation, employees may be given different benefits or advantages by the company that form the perks of the job. They may range in frequency and kind depending on the work place, therefore they may be an important part of the employee package negotiated at the beginning of the job.
Types of benefits and perks
- Paid maternity/paternity leave: although in some countries it is subject to law, in some cases it is the result of a negotiated leave with the employer and is usually a minimum of three weeks.
- Paid time off: irrespective of national holidays and depending on the sector of business, an employee can be offered paid holidays, most often as a result of overtime.
- A good health insurance scheme: probably the most significant part of the employee package is the health insurance plan covered by the company, which usually comprises a retirement fund, medical prescription, hospitalization, vision and dental plans.
- Relocation costs: they are not always offered, but they are becoming more used in certain sectors, particularly for international assignments where the distance is more significant and as an incentive for the employee to move.
- Flextime/telecommuting: usually as part of family planning, it is granted by employers in certain sectors (e.g. IT) where public interaction is not needed and in order to reduce other costs (e.g. commuting).
Advantages to offering employee benefits
- Benefits imposed by regulation are set in place in order to offer uniformity and are considered by employees as rights or entitlements, their lack being a legal ground for taking legal action;
- On the other hand, perks are granted by employers as an addition to the mandatory compensation package in order to achieve a higher job satisfaction and increased employee loyalty. As the employees know they are not entitled to them, they appreciate them more and are an incentive to remain in the job longer.
- Tax exemptions: usually, employer-provided benefits are tax-deductible to the employer and non-taxable for the employee. As an exception, they may be certain executive fringe-benefits that exceed the federal or state tax-exemption ceiling.
More and more companies are offering flexible employee benefits as a result of surveys stating workers feel more motivated if they are offered some, and it boosts employee engagement. These perks should not be the reason for accepting a job, but it is becoming an important part of the employment package.