By now, you’ve surely heard the phrase “The Great Resignation” used to describe the unusually high turnover rates that we are currently experiencing. Employees are becoming increasingly hard to recruit and retain, and one of the best ways to gain a competitive advantage is to ensure your benefits are competitive. According to the Bureau of Labor Statistics, benefits, on average, account for 31% of the total cost of an employee. US employers expect health benefit cost per employee to rise 5.6% on average in 2023, according to early results from Mercer’s National Survey of Employer-Sponsored Health Plans 2022.
Benefits, on average, account for 31% of the total cost of an employee.
So, what does a typical benefits package look like? Gone are the days when the only thing job-seekers looked for was a company that offered health insurance. Today, workers expect a comprehensive benefits package that includes all the traditional offerings along with unique, culture-defining perks – like beer on tap, onsite massages, four-day workweeks, childcare, and pet-friendly offices, to name a few.
Let’s start with traditional benefits. According to the Bureau of Labor Statistics national survey completed in March 2022, the most commonly offered benefit is medical insurance, with 70% of companies in the private sector offering it. That number jumps to 89% in the tech industry. Diving deeper, the average cost for employers is around $500 per month for an Employee Only plan, with typical company contributions around 80% for the employee and 50% for dependents. Retirement benefits came in second, with 69% of companies in the private sector offering it (85% in the tech industry).
The most commonly offered benefit is medical insurance, with 70% of companies in the private sector offering it.
Here are some additional stats:
Next up, let’s talk about time off. Work-life balance is of the utmost importance these days, and time off is one of the best ways to prevent burnout. Approximately 80% of companies in the private sector offer paid vacation time, sick time, and holidays. That number jumps to 93% in the tech industry. After one year of service, employees can expect to receive, on average, 10-14 vacation days per year. Paid time off is an essential offering for a business to remain competitive.
Approximately 80% of companies in the private sector offer paid vacation time, sick time, and holidays.
On the other hand, only 24% of companies offer paid family leave (41% in tech). And it’s becoming more commonplace for workers to want to know your policy on this before accepting an offer. If you’re looking for ways to differentiate yourself from your competition, this may be a good place to start.
Flexible Work Arrangements
Lastly (and maybe most importantly post-pandemic), more companies than ever are offering flexible work arrangements. For some companies, this means offering hybrid or remote work options; for others, it means offering flexible working hours. And some are offering a combination of both. According to McKinsey’s American Opportunity Survey, 58% of employees report having the option to work from home at least one day per week, and 35% of employees report having the option to work fully remote. Flexible work arrangements have become vital to employee recruitment and retention and are a benefit many employers can offer with little to no additional cost.
58% of employees report having the option to work from home at least one day per week, and 35% of employees report having the option to work fully remote.
Now that you know the stats, hopefully you can get a feel for how your benefits package stacks up to industry standards and where there’s room for improvement. And if you need to boost your offerings, don’t be afraid to get creative. Free lunches at the office, home cleaning services for remote employees, and pet insurance are just a few ways we’ve seen employers expand their benefits and perks in non-traditional ways.