What Are Employee Benefits
A simple guide to understanding employee benefits, what they include and why they matter for your business and your people.
What Are Employee Benefits?
Salary is only one part of what an employee receives from their employer.
Employee benefits are the additional forms of financial, health, insurance and wellbeing support provided as part of an employee’s overall remuneration package. Some are required by law, while others are offered by employers to provide additional value and protection to their people.
For businesses, understanding the difference — and knowing which benefits make sense for their workforce — is an important part of building a competitive and sustainable remuneration strategy.
What can employee benefits include?
Employee benefits can take many forms, depending on the business, its workforce and its budget.
Retirement benefits
Retirement funds help employees build financial security for the future. An employer may contribute towards a pension or provident fund, often alongside an employee contribution.
For many employees, retirement savings are one of the most valuable long-term benefits an employer can provide.
Medical aid and healthcare
Medical aid can give employees and their families access to private healthcare and help them manage potentially significant medical costs.
Employers may contribute towards an employee’s medical scheme or provide access to a group arrangement. The tax treatment of employer contributions can vary, so these arrangements should be structured appropriately.
Group life cover
Group life insurance provides financial protection for an employee’s beneficiaries in the event of their death.
For employees with families and financial commitments, this can provide an important layer of security that may otherwise be difficult or expensive to arrange individually.
Disability and income protection
An illness or disability can have a significant impact on an employee’s ability to earn an income.
Disability and income protection benefits are designed to provide financial support when an employee is unable to work, subject to the terms and conditions of the relevant benefit.
Employee wellness and support
Benefits can also extend beyond traditional financial products.
Depending on the organisation, employers may offer employee assistance programmes, mental health support, financial education, wellness initiatives or other services designed to support employees both inside and outside the workplace.
“The right benefits are not about offering more. They’re about offering what matters.”
Not every benefit is right for every business
There is no universal employee benefits package.
A young business with a predominantly young workforce may have different priorities from an established company with employees supporting families and approaching retirement.
The right benefits depend on factors such as:
- The size and structure of your workforce
- Employee demographics and life stages
- Your industry and competitive environment
- Your budget
- The level of protection your employees need
- Your broader remuneration strategy
The objective should not be to offer the longest list of benefits possible.
It should be to provide benefits that are relevant, affordable and valuable to the people you employ.
The bottom line
Employee benefits are about more than adding extras to a salary package.
The right combination of benefits can provide employees with greater financial security while helping businesses build a stronger, more sustainable employment proposition.
The key is choosing benefits based on your people, your business and your objectives.
If you’re unsure whether your current benefits package is delivering the value it should, an independent review can help identify opportunities to improve it.
Need help choosing the right benefits?
Get expert advice and a tailored solution for your business and your people
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