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5th April 2023

A guide to Employee Benefits: Tips & Advice

Employee benefits play an essential role in staff satisfaction and attraction, due to them improving both their personal and professional lives.

Benefits could include:

●       Extended medical insurance

●       Paid time off

●       Learning and development strategies

●       Retirement benefits

●       Full paid maternity leave

If you’re looking to introduce or upgrade your employee benefits packages, you’ve come to the right place. This blog will explore everything you need to know about them along with tips and advice.

What are employee benefits?

Employee benefits are extra incentives given to employees on top of their base wages or salaries.

However there is a difference between legally required benefits (core benefits) and added perks (non-required benefits).

Core benefits require employers to provide them by law and can include:

●       Compensation insurance

●       Unemployment insurance

●       Sick leave

Whereas added perks aren’t required but are a nice extra to offer alongside what you already provide.

Why offer employee benefits?

Research by the Society of Human Resource Management (SHRM) found that 92% of staff see employee benefits as important for their overall job satisfaction. Furthermore, ⅓ of employees said that work benefits are the top reason they looked for a job outside of their current organisation and for choosing to stay at their job.

A lot of job seekers (63%) also look at what benefits a company offers when applying to roles. This highlights the importance of showcasing benefits within your job adverts to help increase application rates.

Adding on to this some people are happy to take lower pay if they have benefits that are important to them, such as health insurance and flexible hours.

To learn more about how staff benefits can improve employee retention, read our blog.

What are the major types of employee benefits?

Many people list major employee benefits as:

●       Insurance

●       Retirement plans

●       Additional compensation

●       Time off 


Insurance benefits can include health insurance (dental, medical and vision), life insurance and disability insurance. Even though there is public medical care, some companies offer private insurance to help provide better options and care for their staff.

Offering life insurance will show that you care for both your staff and their families. Life insurance can give an employee's family some money to cover funeral expenses and other related expenses if they pass away.

Disability insurance might cover long-term and short-term disabilities or illnesses, and staff may receive payments for the entirety of their sickness. 


Retirement benefits help people contribute toward  their future, helping them feel more secure about their plans. In the UK you can do this through a variety of pensions like:

●       State pensions - These are provided by the government once you reach a certain age (usually 65, however this is due to increase). Those eligible for this pension would have made National Insurance contributions.

●       Workplace pensions - This is where employers must enrol staff into a workplace pension scheme, however employees can opt out if they want to.

●       Personal pensions - This is when people take out pensions themself (usually taken out by those that are self-employed)

To learn more about pensions, read our blog, ‘The best countries for statutory sick pay, maternity leave and pensions’. 

Time off

Most workers in the UK must receive at least 28 days of paid annual leave a year, however this depends on an employee's working hours. The 28 days can also include bank holidays, but they don’t have to be provided by employers. Even though there is a legally required amount of holiday days companies must give to their staff, employers can give more days off if they wish to.

9/10 employees reported that paid leave is important to their overall job satisfaction, emphasising why generous benefits should be included within employee packages.

Providing good benefits on parental and sick leave is also key to showing your staff that you care about them as well as their family and their health.

To learn more about maternity and paternity leave, read our blog. 

Additional compensation

Additional compensation can include commission, bonuses, awards and gifts and are offered on top of a salary. When it comes to bonuses they usually come in the form of:

●       Sales commissions

●       Individual or company-wide performance awards

●       Lump sum gifts

These additional compensations are usually part of incentive programmes, aiming to motivate staff and produce better business results.

However, when offering these types of additional benefits you want to make sure you offer everyone equal opportunities to earn them, as if not it could lead to annoyance within the workplace. 

What benefits are classed as ‘good’ benefits?

When it comes to benefits, most employees consider any benefit as a good benefit, however you need to know the difference between what you legally have to offer and what classes as a perk.

According to Glassdoor's Benefits Review Survey, these are the top benefits linked to staff satisfaction:

●       Health insurance

●       Holidays and paid time off

●       Pension plans

●       Retirement plans

●       Dental insurance

●       Maternity and paternity leave

●       Sick days

In addition, the most popular non-insurance based benefits are:

●       Paid family leave

●       Flexible/remote work

●       Professional development 

A great way to figure out what your employees want is by asking them what benefits they think they would take advantage of the most. This will help boost employee satisfaction and make them feel as though they are valued by your company. 

How to implement benefits effectively?

HR usually takes responsibility for employee benefits, however they can be quite time consuming and sometimes pose some issues. Due to this, we’ve put together a few ways you can minimise mistakes and the time it takes to complete tasks: 

Hire a dedicated employee benefits specialist

You can do this by using someone in house, like a Benefits Administrator or hiring externally, such as a Benefits Broker. This will help give you the best options based on what your company and staff need, calculate costs and negotiate prices if there’s room to. 

Use the right software

Investing in a proficient HR/benefits information system will help you track which employees get what benefits, making the process significantly quicker than doing it manually. 

Look into benefits and their costs

The cost of benefits vary depending on the ones you choose to provide and whether their prices fluctuate. Keeping track of prices will allow you to estimate how much your benefits packages will cost you annually, weekly or monthly. 

Provide descriptions of benefits within your employee handbook

Providing a list of benefits within your employee handbook ensures all staff members have the opportunity to discover what benefits you have to offer. This allows your staff to take full advantage of them, helping to improve both their home and work life.

Get in touch with Payescape today to see how we can help improve your HR processes and focus on providing the best employee benefits possible.

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