The impact of employee benefits on company culture and performance

Every business strives for peak employee performance, and the impact of employee benefits is a crucial factor in achieving this. To help your employees stay engaged when at work, you need to have the right company culture in place. When employees have a productive environment to work in and feel like their employer values all of their contributions, staying motivated is often second nature.

One of the most effective ways to establish a great company culture is by making investments in your employees. Offering comprehensive benefits packages is a great way to do this. Let’s look at several types of employee benefits packages and how they can influence your company’s culture and productivity.

Common benefits offerings for modern businesses

Understanding the impact of employee benefits on attracting, retaining, and motivating top talent is crucial for modern businesses. While competitive salaries are essential, a comprehensive benefits package is vital in creating a positive work environment and boosting employee morale.

Below are some of the most commonly incorporated benefits offerings:

• Health insurance: This coverage helps employees cover various medical costs by paying insurance premiums yearly. These types of plans can help offer peace of mind in the event an employee or their dependents need different forms of medical care.
  
• Retirement savings plans: Retirement savings plans like 401(k)s allow employees to reserve a certain amount of pre-tax earnings for retirement savings. Many employers will offer a matching or partial percentage contribution to further incentivize employees to save for their future.
  
• Dental and vision insurance: Dental and vision care is sometimes offered in addition to health insurance coverage to provide coverage of preventive care options and to help lower out-of-pocket expenses associated with dental and vision treatments.
  
• Paid Time Off (PTO): In addition to traditional benefits offerings, many businesses try to help promote better work-life balance and prevent employee burnout by offering adequate paid time off for vacations, sick days, and holidays.

Understanding the link between employee benefits and company culture

All employees appreciate getting perks from the employers they work for. However, while employee benefits packages offer more tangible value to staff members, they actually mean more than you think.

Reflecting company values

Although some employers may view employee benefits as just a part of a complete compensation package, they actually say a lot more to current and potential future employees. Having a well-structured benefits package in place shows where a company’s priorities are and what values drive them. Understanding the impact of employee benefits on communicating company values is crucial for building a strong employer brand.

For example, a company that wants to prove to its employees that it values work-life balance might offer unlimited PTO, showing trust in employees to manage their time effectively while prioritizing their well-being. They might also offer flexible work arrangements like remote work options, hybrid working schedules, or reduced workweeks to better accommodate employees with varying personal priorities.

In most places, benefits packages are an optional add-on when structuring an employee’s total compensation. By offering generous insurance plans or retirement contributions it proves to employees that you’re willing to invest in them.

Creating a sense of belonging

When employees go to work feeling like their financial, physical, and mental health needs are cared for, it creates a much stronger bond with their employer. 
Whether offering traditional healthcare benefits or providing perks like flexible scheduling or childcare assistance, these inclusions make everyone feel welcomed and supported by the business. This, in turn, strengthens employee morale and helps create an environment more conducive to collaboration and productivity.

The impact of employee benefits on employee support and well-being

The impact of employee benefits is crucial in supporting the overall well-being of everyone in the office. In fact, a recent study by MetLife shows that employee benefits play a role in employees being 1.6 times more productive and 1.5 times more likely to stay loyal to an organization. By looking for ways to support various lifestyles, benefits can help create healthier and more productive employees.

Below are some of the ways that employee benefits packages help to support employee well-being.

Reducing financial stress

It can be hard to focus on your daily assignments when you constantly worry about financial stressors. And according to a recent SoFi survey, nearly 90% of all working individuals struggle with financial worries daily.

The importance of employee benefits is evident in their ability to reduce much of this financial stress, often associated with planning for the future and paying various medical expenses for the family.

Many benefits packages can be crafted with financial wellness programs as well, providing invaluable resources to employees who need support making smarter financial decisions. With 60% of employees saying they are more willing to stay with employees who provide them solutions to help them save their money, these programs are also a strategic business choice.

Promoting improved physical and mental health

76% of employees experience burnout at some point when doing their jobs. The same analysis shows that this burnout leads 63% of individuals to be more likely to take a “sick” day to help them cope. Taking care of your physical and mental health is critical to live a happy life and have a rewarding career.

To help address this need, employers should avoid the tendency to “carewash,” meaning not just “talking” about the importance of mental health without providing resources or actionable steps employees can take to better manage it.

The importance of employee benefits is highlighted by their ability to encourage employees to take more interest in their physical and mental health. When customizing your benefits packages, you can incorporate offerings like gym memberships or fitness subsidies as well as employee assistance programs designed to provide easy access to mental health resources when needed.

A great example of the positive impact this can bring on employees is with the company Salesforce. Over the years, the company has focused heavily on its “Wellness at Salesforce” program. By providing employees with a wellness playbook, helpful tips and resources from mental health experts, the company has seen a 34% decrease in stress levels among their employees. 

By promoting these elements, businesses can help their employees maintain healthier lifestyles that not only benefit them but also reduce illness that contributes to more absences from work.

Better work-life balance

Benefits packages don’t have to just be structured with health insurance offerings or dental and vision plans. 

According to a case study released by the World Economic Forum, employees who have a balance between their personal and professional lives are 21% more engaged at work and 28% more likely to feel satisfied with their life choices. In another Reuters study, it was found that work-life balance ranks just as highly as pay and other traditional benefits types in 93% of all workers’ priorities.

Business packages can be formatted to include flexible working arrangements or generous amounts of paid time off to employees. Offering these incentives is a great way to help employees establish a better work-life balance and allow them to return to work energized and ready to contribute 100%. 

Giving a sense of purpose and belonging

Outside of the financial advantages they provide, benefits packages can also contribute to an employee’s sense of purpose and belonging to the company. When employees feel valued, they often experience greater motivation and job satisfaction. For example, benefits like tuition reimbursement or professional development opportunities show a company’s investment in their growth and encourage them to improve their skillsets for themselves and the company. 

Companies can also help their employees have a deeper sense of purpose by aligning their benefits with their mission and values. This might include offering paid time off for volunteer work or matching charitable donations. By connecting benefits to a larger purpose, companies inspire employees to connect with their work on a deeper level and contribute to something meaningful.

The impact of employee benefits can extend beyond individual employee well-being and significantly influence a company’s overall success.

How employee benefits fuel company performance

It can be tempting to view employee benefits as just another expense to manage. However, while it’s important to build and maintain appropriate budgets when researching benefits offerings, it’s also essential to view them more as longer-term investments in the company’s overall success. 

Below are some ways the incorporating benefits packages can provide strategic advantages to the business.

Get access to more qualified talent

Considering how competitive today’s job market is, it’s important to look for as many opportunities as possible to differentiate your brand from others. Offering comprehensive benefits packages supports this effort by helping you attract more qualified candidates to job postings.

Having a great benefits package improves your company’s reputation and makes potential candidates more interested in applying for a business that obviously values their employees. This can also help increase staff retention rates and minimize the disruption of needing to rinse and repeat hiring and onboarding processes.

Improve employee motivation

Employees who feel regularly valued and supported by their employer are more likely to be more engaged with their work. This translates to increased productivity, improved performance, and a greater willingness to go the extra mile. 

Remember, by making investments in employee benefits, you’re actually investing in a stronger and higher-performing workforce, not just fulfilling employee needs.

The impact of benefits on employee performance is significant. By fostering a positive and supportive work environment, comprehensive benefits packages directly contribute to increased employee engagement, productivity, and overall performance.

Create more opportunities for collaboration

When employees feel genuinely cared for by their company, it creates a ripple effect that moves through the whole company. A strong benefits package says you see employees as more than just assets and want them to be supported both professionally and personally.

This sense of value translates into a more positive and collaborative working atmosphere. Employees who feel appreciated are more likely to be more involved in team initiatives and contribute toward shared company goals. This collaborative spirit can be a game-changer and lead to a stronger sense of shared purpose by everyone.

Create a high-performing company culture through employee benefits

Taking the time to create an impactful employee benefits package is an excellent investment in your company’s future. The impact of employee benefits extends beyond employee satisfaction and can significantly influence a company’s overall success. By prioritizing employee well-being and creating a supportive work environment, organizations can build a high-performing culture that attracts top talent, encourages more employee engagement, and fuels more sustainable business success.

This article was written by Frank Mengert, who continues to find success by spotting opportunities where others see nothing. As the founder and CEO of ebm, a leading provider of employee benefits solutions, Frank has built the business by bridging the gap between insurance and technology-driven solutions for brokers, consultants, carriers, and employers nationwide.