Competitive wages are no longer enough to satisfy and support valued employees. Today, a variety of benefits plays an essential role in attracting and retaining people who are a good fit for the job and for each company culture.
That’s why an increasing number of employers are utilizing lifestyle or fringe benefit plans to entice high-quality applicants, help their company stand out as a great place to work and improve their workforce’s quality of life.
In fact, studies show that 80% of employees would select more benefits above a pay increase.
What Are Lifestyle Benefits?
Lifestyle benefits (also called fringe benefits) are unique perks that an employee receives outside of their wages or salary. They include any benefits that aren’t directly tied to the person’s wages.
This umbrella term is generally broken into two separate categories:
Necessary benefits refer to benefits that people have to purchase on their own if an employer doesn’t provide access to them. Take health insurance as an example.
Employees need to stay healthy and having affordable health insurance is critical. Still, according to statistics provided by Kaiser Family Foundation, less than half (47.4%) of all U.S. firms offered paid health insurance to their employees. That leaves many employees seeking health insurance from other sources; paying premiums and co-pays out of their own pockets.
Ancillary benefits are not essential, but they can improve an employee’s emotional, personal or financial well-being in some supplemental way. Consider the wide range of “extras” that an employer can offer, from corporate wellness programs to professional development. These are perks that help attract and retain a better workforce.
Ancillary benefits have become the real difference-makers in the modern employment landscape.
8 Reasons to Provide Fringe Benefits for Your Employees
Providing unique fringe benefits can support recruitment efforts and help retain a strong workforce. 70% of employees report that benefits and perks play a significant role when considering a job offer. Moreover, 68% of people say that “work perks” (ancillary benefits) are just as crucial as traditional benefits like healthcare.
2. Improved Employee Happiness
Happy people look forward to coming to work and are, at minimum, 12% more productive than unhappy ones. More personalized benefits are a great way to make employees happier.
3. Support and Encouragement
Offering lifestyle benefits is a terrific way to reward and support your people. 78% of employees say they are more productive after receiving a reward. It also helps your people at home. 70% of workers noted that when they were happy at work, they were happier at home, as well. Benefits help employees in and out of the office, supporting greater work-life balance — and this is good for families too.
4. Improved Company Culture
79% of U.S. workers agree that company culture is important, and 57% of employees say they’ll take a job with another company if their culture is better.
Unique and personalized benefits can help improve employee happiness, which has a direct impact on company culture. Fringe benefits can include lifestyle rewards, like comprehensive wellness benefits, fitness classes or mental health assistance, all of which show your people that you care about their wellness.
5. Employee Health and Well-Being
57% of employees say that if they felt that their employer proactively supported their well-being, they would be more productive, feel more loyal and take less time off work. Offering comprehensive wellness benefits is a way to show your team that you support their well-being and care about them as individuals.
Investing in employee health and well-being benefits — for instance, offering gym memberships or online therapy access — also has the potential to reduce the number of sick days they take in the future.
6. Performance-Based Competition
Employees have come to expect that their employers will recognize their efforts and provide them with performance-based compensation. Lifestyle benefits tend to serve as fantastic encouragement for performance-based competitions or as part of a rewards and recognition program. As opposed to salary-based competitions, which can cause anxiety, benefit-motivated competitions generate productivity and enthusiasm.
Employee turnover can cost twice as much as the employee’s yearly salary. Yet, 49% of employees will look for new jobs in the next twelve months because they’re dissatisfied with their current benefit offerings. By offering a program such as Fringe benefits, employees can choose the benefits that make the most significant impact in their lives, increasing their satisfaction and loyalty. (To learn 14 other tactics to increase employee retention, click here.)
8. Employee Referrals
People are more likely to refer their friends and acquaintances to work at a company if they’re satisfied with their employer. This is important because 30% of all new hires come from employee referrals. Fringe benefits can be an integral part of an employee-referral program as it incentivizes recruitment.
It’s also a time-saver. External hires require four times the applications and two times the interviews that employee referral hires do. It’s no surprise that focusing on recruitment is gaining popularity and extending benefits to employees to help bring in quality hires is a win for everyone.
Examples of Fringe Benefits
First, it’s important to note the U.S. government requires that companies provide some basic benefits for their employees. These include Medicare, Social Security, State and Federal Unemployment Insurance, and Worker’s Compensation. Companies with fifty or more employees must also provide health insurance as well as family and medical leave (12 weeks of unpaid, job-protected leave) to eligible employees.
In addition, an increasing number of employees expect at least some of the following standardized employer-sponsored benefits.
Vision & Dental Insurance
HSA and FSA
Many people are looking for more than just traditional benefits these days. If companies want the best potential candidates, they have to think outside the box with personalized benefit offerings. This is why fringe benefits are growing in popularity and used by the most competitive employers.
Unique Fringe Benefit Examples
Bonuses involve any monetary compensation outside of regular pay. According to research by SHRM, semi-regular or performance-based bonuses can improve an employee’s engagement and job satisfaction. Bonuses can include a holiday bonus, profit sharing or more merit-based bonuses for hitting specific performance metrics.
Appeal to employees’ personal interests by giving them tickets to basketball games, football games, concerts, plays and more. This helps them feel understood and appreciated. It’s also an opportunity to gather outside of work to get to know the employees better.
Transportation and Commuting Costs
Gas cards, transit passes or monthly commuting allowances are all great ways to ease the commuting process and give employees one less thing to worry about. This is an excellent fringe benefit for employers who are located in congested urban areas.
A company vehicle helps employees upgrade their means of everyday transportation while keeping them committed for the long term. Having access to the benefit of a vehicle reduces missed work due to vehicle breakdowns; plus, there is a certain pride that goes with driving a fleet vehicle.
There’s no shortage of consumer subscription services these days. 74% of Americans currently have at least one video streaming service. Some other subscription options to consider might be a monthly coffee or business magazine subscription. Providing complimentary subscriptions can be a unique way to appeal to people’s interests and keep them looking forward to something each month.
Recreation & Fitness Opportunities
There’s an abundance of fringe benefits to consider under the recreation and fitness umbrella. Many companies find ways to offer recreation and fitness perks for their people, from paying gym memberships to complimentary yoga or dance classes.
This type of fringe benefit includes everything from on-the-job training to tuition reimbursement. Some companies offer complimentary courses, while others pay their people to earn college degrees. Others send employees to industry conferences so they can grow their careers. In any case, an educational reimbursement is a win-win for employees and employers.
Some larger corporations offer onsite childcare or complete reimbursement for private daycare services, while others will pay a portion of childcare costs. This welcome benefit can help working parents afford the high costs of raising a family.
This benefit refers to paid time off for parents following the birth (or adoption) of their children. For expectant parents or people hoping to have children someday, this opportunity can be a huge draw, especially since only 40% of U.S. employers offer maternity leave and only 29% offer paternity leave.
How Fringe Benefits Work
Advantages of a Customizable Fringe Benefit System
It’s no surprise that most people favor custom and personalized benefits options. Almost 75% of people say that lifestyle benefits are an important consideration when looking for a new job, and 88% of people say that having the option to customize benefits to fit their needs increases job satisfaction.
Unlike the one-size-fits-all approach some organizations attempt with their group benefits, customized benefits options allow employees to pick what works for them. With a points-based system, they can choose unique benefits and perks that enhance their lives and ignore those that would have no impact on them.
Customized benefits systems allow companies to ensure that the money they spend on fringe benefits has the desired effect on recruitment, happiness, retention and performance.
Use Fringe for Better Employee Lifestyle Benefits
Here at Fringe, we specialize in customizable benefits. Our single platform allows employers to give their people a form of digital currency instead of blanket benefits. Then, employees can spend points to choose the benefits that best serve their needs.
Fringe is not just for employers. It’s a terrific tool for managers, too.
How Fringe Helps Management
Our benefits platform frees up time and resources for managers. When used as a reward system, it can help motivate employees, boost morale and incentivize tasks in a meaningful way. Lifestyle benefits can be customized to each person’s interests.
How Fringe Helps Employees
The Fringe platform gives employees over 100 lifestyle benefits that directly increase their quality of life. From well-being services to food and transportation, people can use their benefit points for whatever best suits their lifestyle.
Support Your Team With Better Benefits
Everyone wins with our flexible Fringe benefits platform. By using a point-based system, companies know with certainty that the employees are getting something they want and need, instead of wasting money on benefits that are rarely used or appreciated.
Want to learn more about how the Fringe platform can revolutionize your business? Schedule a free demo today.