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Why are Benefits More Important Than Salary?

Why are Benefits More Important Than Salary?

Employee benefits are more important than salary, because they provide better experience for employees and increase satisfaction. While salary is important, other forms of compensation, whether they be benefits or unique perks, can often be even more effective to recruit and retain talent. According to a survey by Glassdoor, nearly half of job seekers cited attractive benefits and perks as a major factor driving them to apply for a job while 80% of employees said they prefer additional benefits over a pay increase.

The importance of benefits was clear among Glassdoor’s Top 10 Best Places to Work. Barometer’s analysis of these companies’ Q4 2019 Glassdoor reviews showed that while 62% of reviewers positively rated their salaries, 90% were satisfied with their benefits.

Benefits That Drive Employee Satisfaction

What benefits resonate most with workers at top employers? Our analysis indicates that traditional benefits like health insurance and 401k plans are fundamental to a high benefits rating on Glassdoor. Additional benefits like paid volunteer days also received positive attention.

Barometer salary and benefits case study graph

Health Insurance

Even as the workforce is increasingly filled with younger generations, a robust health insurance plan is viewed as one of the most important components of a benefits package. Across all Q4 2019 Glassdoor reviews of top employers, there were virtually no negative reviews of the companies’ health insurance plans.

Employees at Ultimate Software (#8) praised their healthcare plans for being “comprehensive” by providing health, dental, and vision insurance. Further, reviews noted that all healthcare premiums for Ultimate Software’s employees are covered by the company. HubSpot’s (#1) employees were very positive on the inclusion of mental health in their plans as well as full coverage for their families.

Ensuring your company has a comprehensive health insurance plan that covers deductibles is essential to having a great benefits package because it gives employees the assurance that they don’t have to worry about any costs in the case of illness or injury. Additional coverage for families is also a bonus as it shows how the company not only values their staff, but also their loved ones.

401k & Retirement

Another overlooked benefit is a 401k retirement plan. Like health insurance, our analysis of Glassdoor reviews in Q4 2019 showed almost no negative feedback on 401k in the Top 10 Best Places to Work. The data shows that 401k programs are fundamental to best workplace benefits.

Interestingly, there was no commentary on the investment provider itself, but the 401k matching levels were frequently mentioned. Southwest Airlines (#10) employees were pleased with the company’s top 401k matching program which provides a high cap on their 401k match. Ultimate Software (#8) workers frequently mentioned the unlimited 401k match they are offered. Creating an attractive 401k match program goes a long way with employee job satisfaction and standing out amongst competitors. It’s a cost-effective method for staff and allows them to feel valued of their financial future.

Unique Employee Benefits

What really sets employers apart is their offering of unique benefits. These benefits are rated positively 92% of the time in our analysis of Q4 2019 reviews. A few are industry specific: for example, Southwest Airlines (#10) offers employees travel perks as part of its package.

However, there are plenty of unique benefits to offer employees, regardless of the industry. Here are a few of the most prolific ones found in our analysis:

  • Tuition Reimbursement (HubSpot, #1)
  • Education Stipend (DocuSign, #3)
  • Transportation/Commuter Stipend (DocuSign, #3)
  • Paid Volunteer Days (DocuSign, #3)
  • Profit Sharing (Southwest Airlines, #10)

The Right Benefit Package is Fundamental to Employee Satisfaction

Ultimately, salary is not the only piece of a compensation package that matters to employees. It is the entire package that helps overcome common employee concerns such as long commutes, poor work-life balance, or issues with management/leadership. Companies should critically assess their benefits package to ensure it contains quality traditional benefits like health insurance and 401k plans along with a blend of unique perks.

Revamping your benefits? Read this first.
Rare Benefit Title Page
Published by Alykhan Merali April 10, 2020
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