Core Benefits Drive Satisfaction More Than Niche Offerings

Health insurance, 401(k) plans and vacation/paid time off are the most valued rewards

By Stephen Miller, CEBS Jun 8, 2016
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Improving traditional core benefits could be the best way to increase employees’ satisfaction with their rewards mix, new research suggests.

The three offerings with the greatest effect on how employees rate their benefits are health insurance, 401(k) retirement plans and vacation/paid time off. Among these, health insurance was by far the biggest driver of employee satisfaction, according to a new study, Which Benefits Drive Employee Satisfaction?, from Glassdoor Economic Research, the research arm of career website Glassdoor.

At organizations where employee ratings of the employer-provided health coverage increased by 1 star (out of 5), there was also a statistically significant increase in average employee satisfaction with the overall benefits package.


Source: Glassdoor Economic Research

*Denotes that the increase in the overall benefits rating was statistically significant.


Notably, 4 in 5 U.S. workers report they prefer new benefits or perks to a pay raise. This finding supports a recent Glassdoor survey that found health insurance, paid time off and 401(k) plans are among the top benefits employees would prefer over a pay increase.

Benefits with Narrower Appeal

Two benefits that did not seem to have a significant impact on overall employee satisfaction were maternity/paternity leave and employee discounts.

“Though many employers have added generous maternity/paternity leave plans, it is possible benefits that are not used by a large subset of employees do not impact overall benefits package satisfaction,” the researchers suggested.

“We know benefits and perks are an important recruiting tool in today’s challenging hiring landscape, and this study shows that the flashiest or trendy benefits aren’t always better,” said Andrew Chamberlain, chief economist of Glassdoor. “Investing in core benefits programs like health care coverage, retirement plans and paid time off will go far with new and current employees. Other benefits, like maternity/paternity leave, are important to recruit and retain smaller subsets of employees—like new parents—though we saw little impact on overall satisfaction related to benefits that don’t touch a wide variety of employees.”

He advised, “Employers who have well-rounded compensation plans that include core benefits, fair and competitive pay, and desirable perks stand to attract and retain top talent.”

A separate Glassdoor Economic Research study, The Best Industries for Benefits, found that the best benefits packages, according to employees, are found in the finance and technology industries.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.

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