Employers are often perplexed by how much they should spend on employee benefits. How much is too much for things like vacation time or bonuses?
A recent report released by the U.S. Bureau of Labor Statistics showed that benefits make up about 30% of the average worker’s paycheck.
The report provided separate numbers for civilian, private, and government workers, but for the purposes of this article, we’ll just look at the private business numbers. The highest percentage of benefit costs for private employers was required benefits, at 8.2%, followed by insurance at 7.8% and paid leave at 6.8%
According to the report, an employee with an annual salary of $50,000 would have a total compensation of $70,721. That employee would be paid:
$5,800 for legally required benefits
$5,516 for insurance
$4,809 for paid leave
$2,405 for retirement and savings
$2,122 for supplemental pay
Show your employees how much their benefits contribute to their pay through a total compensation statements from COMPackage.
The latest annual survey of employee benefits trends conducted by MetLife shows that employees are placing a higher value on benefits than ever before. This development appears to be a direct result of the recession.
The poll found that the economic downturn served as a wakeup call to employees, many of whom suddenly found themselves without insurance or retirement benefits. As a result, 41% of respondents said that they considered workplace benefits the foundation of their personal safety net, up from 33% in the months leading up to the recession.
Also, while factors like advancement opportunities and company culture were important to employees leading up to the recession, the study showed that insurance and retirement benefits have quickly become the most important factors in finding a job.
To attract and retain the best employees, then, it is important that you offer a strong benefits package. If you provide benefits like health insurance or a retirement plan, potential hires will feel better about working with you because they know they’ll be covered during an emergency. Many who were hurt during the recession are looking for assurance that they won’t be hurt again.
Learn more about how you can present an attractive benefits package to your employees.