Which Employee Benefits Do Workers Value Most?

An improving economy has made the talent market heat up, and organizations are finding they need to look for new ways to recruit and retain high-performing employees. One of the tools many organizations use to attract high-talent candidates and hold onto their top performers is a strong benefits package.

While different employees have different preferences and needs, there are some trends worth noting when it comes to the benefits employees value. This white paper will look at benefits employees tend to value most, and examine how organizations can use benefits to improve their recruiting and retention efforts.

Health Insurance

One of the most valued employee benefits is health insurance. “Employees value health insurance, dental and vision the most,” says Nicole Wright of Entrepreneurs Loft. Research backs that up. According to a Towers Watson survey, 46 percent of respondents said health care benefits are an important reason for deciding to work for a given employer, and 55 percent said they are an important reason for staying with an employer.

Health insurance has become such a common benefit that there’s a level of coverage and payment that employees are expecting to get when they have a job. “The standard mental programming is a simple PPO plan with $20 co-pay,” Wright says. “It’s something that they know is taken care of for them and in which they don’t have to think about.”

Of course, coverage and payments vary by plan, so it’s important for companies to keep an eye on costs as they consider various options. According to the Kaiser Health Foundation, employers are shifting more costs of health insurance to employees. These changes can include paying only a fixed amount for certain medications or surgeries, or giving rebates or discounts to people who make healthy lifestyle changes or hit certain health milestones. No matter what kinds of changes you make to your health benefits options, finding a balance between improving value for your organization and your employees is key.

With new coverage options available under the Affordable Care Act, organizations should carefully assess their health benefits and ensure they’re offering the best value for employees. New mandates may apply to your organization under the ACA, and it’s important to ensure that all employees are covered at the required level to avoid fines and other sanctions. Voluntary benefits that tie in with standard health insurance — such as long-term care, disease-specific insurance, extra health or dental benefits and so on — can also help add value for employees without adding significant costs for the organization.

Retirement Benefits

Whether it’s a defined benefit plan, such as a pension; a defined contribution plan, such as a 401(k) program; or a combination or hybrid plan, employees see a lot of value in retirement benefits. The Towers Watson survey found when companies cut retirement benefits in an attempt to reduce overall costs they began to experience difficulties in attracting and retaining talent, especially if the cuts involved halting growth of a defined benefit plan or reducing or entirely ending matching contributions to a 401(k) or similar plan.

The survey found among younger workers, in particular, retirement security programs are a strong factor in recruiting and retention. According to the study, more than 60 percent of employees said a retirement program was an “important factor” in accepting the job they did. Companies that offer retirement benefits should pay close attention to these plans if they’re interested in recruiting and retaining younger workers.

Life Insurance

One opportunity many organizations have for boosting value for their employees is to educate them on the importance of life insurance. According to a recent study by The Futures Company, Gen Xers, in particular, show a large gap between their level of coverage and their self-described financial needs, which may include paying off mortgages or other debts or saving for retirement. Gen Xers — those generally described as being born between the early 1960s and the early 1980s — have a median amount of life insurance that would cover less than 40 percent of their self-described financial needs.

If your organization is looking to improve employee value when it comes to benefits, consider adding life insurance as a voluntary benefit, particularly for employees ages 35 to 50. If you have high-performing employees in this age group that you want to retain, making it easy for them to take advantage of affordable, secure life insurance programs may help you make a serious value proposition to them.

Other Voluntary Benefits

Voluntary benefits can be a valuable part of a total benefits package, and they can offer employees extra value without adding to an organization’s costs. According to Towers Watson, organizations can use voluntary benefits to soften the blow of cuts or unpopular changes in core benefit options. For example, if a company needs to switch to a high-deductible health plan, the study found that employees are more likely to have positive opinions about the change if they have the opportunity to supplement their new plan with cost-effective voluntary benefits.

If your organization is considering expanding voluntary benefits, it’s important to offer a wide variety that employees can tailor to fit their own needs. A recent survey from TNS Omnibus found that the majority of employees surveyed said it’s important to them to be able to pick and choose benefits that match the needs of their families.

Some voluntary benefits that are seeing growth include supplemental health benefits such as hospital insurance or extended care insurance, financial planning services and online education.

Extra Perks

Organizations may offer other benefits that add value that is specific to location, employee population, employer or other variable. Lifestyle benefits can add a lot of value, Wright says. “With the newer models at Google, Apple, Facebook, in the Bay Area employees are also looking for a company that creates lifestyle benefits. The shuttle to work, cafeteria with meals provided, even laundry service.”

These kinds of benefits make it easy for employees to focus on work, rather than outside chores. “The benefit to the employee is that they show up for work, and their needs are taken care of,” she says. “For the employer, the perks are so comfortable that the employee voluntarily works harder and longer.”

Quality-of-life benefits also are attractive to many employees.”For example, some companies may have employees that truly appreciate flextime/telecommuting programs, pet insurance and tuition reimbursement programs,” says Chris Costello, principal and founder of CBG Benefits. “Other companies may find that a well-designed and tracked workplace wellness program delivers great results for their employees.”

How to Decide

When putting together benefits packages for your employees, it’s important to survey them to find out which options they value most. “Without a doubt, employees certainly enjoy and place great value on benefits such as health care, dental, and retirement plans,” Costello says. “However, those benefits alone may not help a company to achieve their employee retention goals. Also, each company is truly unique. Thus, it’s critical that employers actively analyze the demographics of their employee population and regularly reach out to them with surveys.”

Depending on your company’s size and culture, consider annual surveys to find out what employees are looking for, especially if you’ve gone through a hiring phase. Also, look at periodic benefit audits to make sure you’re not paying for coverage that isn’t being used or is being used incorrectly. In the long run, this can help control benefit costs and let your organization focus on benefits that provide real value.

Through surveys and careful responses, organizations will be able to deliver innovative benefits that strengthen the relationship they have with their employees, Costello says.


Health insurance continues to be a major value-add when it comes to benefits, but with the changes in healthcare laws, employers are looking at other options as well. Organizations should survey their employees periodically to find out which benefits add the most value to their work experience, and find ways to allow them to customize company offerings to develop the best package for their unique needs.

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