In order to draw the most talented people to the organization, companies will often offer compensation in the form of employee benefits. Benefits can be a good deal to both the company and the employee. While benefits are usually taxed, they're generally taxed at a much lower rate than straight cash. In addition, employers can sometimes write off benefits in a way that they can't write off employee wages.
Benefit packages usually cost companies less than their actual value. This is because a company with many employees will buy the benefits in bulk and thus get better deals. Individual employees often prefer to be compensated with benefits rather than wages, because the services would cost them more to buy individually.
Some examples of the types of benefits are:
Health Insurance: Companies have long offered health insurance as part of their benefit packages on account of the fact that almost everyone has a need for it, and it's quite expensive to buy individually but can be purchased relatively cheaply when bought as part of a group plan. It benefits the company because healthy employees are more productive than sick employees.
Sick Leave/ Vacation Days: Paid time off is easy for companies to offer, because it comes in the form of the employee's normal wages, minus a few days of productivity. Time off has actually been shown in some studies to increase productivity and reduce company costs, because employee sickness and stress have costs for the company. For example, employees who don't have paid sick days will often choose to come in to work sick, possibly spreading their illness through the building, resulting in a large loss of productivity.
Housing: This is sometimes a benefit for executives and other workers with scarce, in-demand skills who have to relocate in order to take a job. Providing some form of housing, either in the form of a company apartment or rent voucher has ease the employee's transition and make them more committed to the company. Also, agricultural producers will sometimes hire seasonal migrant workers and house them in dormitories that they own or rent out so their labor supply remains in place throughout the season.
Childcare: With many women choosing to have both children and a career, companies have responded by offering onsite childcare.
Tuition Reimbursement: In order to maintain a workforce that is up to date on the latest advancements in their fields, a number of companies are offering tuition reimbursements so their employees can take classes while they work.
Profit Sharing: Stock options and other profit sharing schemes encourage the employee to invest their best work into the company to ensure that their shares will be more profitable. This can be one of the more lucrative employee benefits, as the stock of a company that does well during the employee's tenure can sometimes double or triple in value.
Retirement Contributions: Companies will sometimes match the employee's 401K contribution as a form of compensation. This is beneficial because companies don't have to pay taxes on what they contribute and the account is tax deferred for the employee.
Benefit packages usually cost companies less than their actual value. This is because a company with many employees will buy the benefits in bulk and thus get better deals. Individual employees often prefer to be compensated with benefits rather than wages, because the services would cost them more to buy individually.
Some examples of the types of benefits are:
Health Insurance: Companies have long offered health insurance as part of their benefit packages on account of the fact that almost everyone has a need for it, and it's quite expensive to buy individually but can be purchased relatively cheaply when bought as part of a group plan. It benefits the company because healthy employees are more productive than sick employees.
Sick Leave/ Vacation Days: Paid time off is easy for companies to offer, because it comes in the form of the employee's normal wages, minus a few days of productivity. Time off has actually been shown in some studies to increase productivity and reduce company costs, because employee sickness and stress have costs for the company. For example, employees who don't have paid sick days will often choose to come in to work sick, possibly spreading their illness through the building, resulting in a large loss of productivity.
Housing: This is sometimes a benefit for executives and other workers with scarce, in-demand skills who have to relocate in order to take a job. Providing some form of housing, either in the form of a company apartment or rent voucher has ease the employee's transition and make them more committed to the company. Also, agricultural producers will sometimes hire seasonal migrant workers and house them in dormitories that they own or rent out so their labor supply remains in place throughout the season.
Childcare: With many women choosing to have both children and a career, companies have responded by offering onsite childcare.
Tuition Reimbursement: In order to maintain a workforce that is up to date on the latest advancements in their fields, a number of companies are offering tuition reimbursements so their employees can take classes while they work.
Profit Sharing: Stock options and other profit sharing schemes encourage the employee to invest their best work into the company to ensure that their shares will be more profitable. This can be one of the more lucrative employee benefits, as the stock of a company that does well during the employee's tenure can sometimes double or triple in value.
Retirement Contributions: Companies will sometimes match the employee's 401K contribution as a form of compensation. This is beneficial because companies don't have to pay taxes on what they contribute and the account is tax deferred for the employee.