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 Fringe Benefits?
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 and there are many different benefit types. Fringe benefits are similar to lifestyle benefits in that they go beyond what’s expected from traditional benefits. The difference is that lifestyle benefits specifically aim at meeting everyday needs — child care, food delivery, mental health.
This umbrella term of fringe benefits 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 in 2020. That leaves many employees seeking health insurance from other sources; paying premiums and co-pays out of their own pockets.
For many employees, the necessary fringe benefits have simply become expected table stakes, leading companies to seek additional methods of attracting and retaining top talent.
While most ancillary benefits are not required by law in the same way many necessary benefits are, 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 fringe benefits have become the difference-makers in the modern employment landscape.
Types 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 fringe benefits.
Common types of traditional fringe benefits include:
- Health Insurance
- Vacation Days
- Sick Days
- Life Insurance
- Vision & Dental Insurance
- Disability Insurance
- Stock Options
- HSA and FSA
- Flexible Scheduling
Many people are looking for more than just traditional fringe benefits these days. If companies want the best potential candidates, they have to think outside the box with personalized benefit offerings. This is why unique fringe benefits and lifestyle 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 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 Commuter Benefits
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.
Gym Reimbursement & Other 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.
8 Reasons to Provide Lifestyle Benefits for Your Employees
1. Improve Employee Recruitment
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. Improve 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. Show Employee Appreciation
Offering lifestyle benefits is a terrific way to reward and support your people, and make employees feel valued. 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. Improve Employee Health and Well-Being
Offering comprehensive wellness benefits is a way to show your team that you support employee wellbeing 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. Offer Stronger Performance-Based Incentives
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. Learn more about the problems with incentive programs and what to try instead
7. Improve Employee Retention
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. Learn 14 other tactics to decrease employee turnover.
8. Increase 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.
Support Your Team with Better Benefits: How We Can Help
It’s no surprise that most people favor custom and personalized benefits options.
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.
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.
Why Choose Fringe
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.
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.
Learn why top companies choose Fringe to attract and retain the best people.
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? Reach out to our team to get started today!