In a competitive job market, employers are recognizing the value of accommodating the needs and desires of employees. By offering a variety of attractive discretionary benefits, which are benefits that are optional under the law and that companies provide at their discretion, employers can provide incentives to help attract and retain the best talent and establish the company as a great place to work.
How do discretionary benefits compare to legally required benefits?
Employers are legally required to provide certain benefits under state or federal law, such as paying Social Security and Medicare taxes, in addition to workers' compensation insurance and unemployment insurance. Under the Family and Medical Leave Act, employers must also provide job-protected time off for medical and family reasons, although they aren't obligated to offer paid time off. Additionally, employers with 50 or more full-time employees are required to offer health insurance under the Affordable Care Act, and employers with 20 or more employees are required to provide coverage continuity under COBRA when healthcare coverage terminates.
Discretionary benefits, however, are not legally required by law but are put in place to improve their employees' quality of life. They may help employees feel more productive, improve their health and wellness, help them save money for retirement, or help them plan for building a family. According to research, discretionary benefits are essential to job-seekers and candidates—a Glassdoor survey found that nearly 60% of respondents said they strongly consider benefits and perks offered before accepting a job offer.
Types of discretionary benefits
Wellness perks like gym memberships and workout classes result in healthier, happier workers and benefits employers. To start, they're tax-deductible expenses if conducted on-site. What's more, they come with healthcare savings for organizations, as insurance utilization rates are lower among employees with active lifestyles. Employers can also give employees more choices by offering wellness stipends to use as they please. For example, Microsoft offers an annual $800 "StayFit" stipend that employees can use to cover a gym membership or exercise equipment costs. Eventbrite provides a similar $60 per month allowance for its employees.
Employee assistance programs
Because of the pandemic, mental health benefits are growing in popularity, and seeking help for mental illness is finally being destigmatized. For employees grappling with anxiety, postpartum depression, adult ADHD, anxiety, and more, employee assistance programs (EAPs) can be helpful. EAPs are employer-sponsored services designed to assist your team in navigating mental health challenges. While EAP services are sometimes bundled under existing healthcare or disability coverage, standalone programs are also available. By law, EAPs are required to protect participants' confidentiality unless they're causing physical harm to themselves or others.
Financial assistance programs
Over 80% of businesses say that finances have affected employees' engagement and productivity. Economic uncertainty, debt, and other financial hardships can take their toll, wracking employees with anxiety and doubling their risk for heart disease and other serious illnesses. To counteract this, employers can offer financial wellness benefits like automated investing, credit card debt counseling, financial planning advice, housing and mortgage counseling, and student loan refinancing. They can also invest in employees' futures by offering retirement benefits and employer matches or contributions to participants' accounts based on their deferments.
Family-friendly benefits support employees throughout their family journeys, like planning advice, family building, fertility reimbursements, mental health support, breastmilk shipping, and access to specialty care. They can also include broader caregiving leave (e.g., caring for a parent, spouse, or domestic partner), as well as parental leave, adoption, paid bereavement leave, and childcare benefits. As more companies look to foster a diverse, equitable, and inclusive workplace, family-friendly benefits are becoming an increasingly crucial element of their talent strategy. According to a survey, almost six in ten employers (59%) say that family-friendly policies have been essential to their talent strategy over the past three years to a great or very great extent, a figure expected to grow to 77% in the next three years.
Flexible and remote work arrangements
Offering flexible hours is a straightforward, low-cost way for companies to attract talented employees who want the freedom to tend to their familial responsibilities, optimize their time, reduce stress, and live a balanced life. A survey found that, after health insurance, employees most value benefits that give them time back in their days: flexible hours, more paid vacation time, and work-from-home options.
Remote work arrangements, which have become increasingly popular through the pandemic, are a popular discretionary benefit for a reason. They can:
- Eliminate or reduce commuting time
- Boost income and buying power when employees can live in more affordable cities
- Increase work-life balance with more flexibility to do passion projects and hobbies, work around child care and school schedules, appointments, and time to see family and friends
- Allow employees significant autonomy and supports driven, high-performance talent
Plus, the benefits of remote work go both ways. Employers that allow their staff to work remotely will see reduced turnover, increased productivity from employees, and lower overhead costs.
When discretionary benefits become necessary
Although the word “discretionary” may seem synonymous with “optional,” in reality discretionary benefits are now table stakes for attracting, retaining, and sustaining employees. Not only do many employees prefer better benefits to higher pay, discretionary health benefits like virtual care and expanded leave can improve health outcomes and reduce lifetime healthcare spend. It's fair to say then, that even though discretionary benefits are optional, having them are critical in modern businesses.
The best talent expects more from their total rewards
Even for companies that aren’t affected by the Great Resignation, the talent market is hotter than ever. Discretionary benefits are central to recruitment and retention strategies at many top companies around the world, and are rapidly becoming the expectation among talent. They expect diverse workplaces with equitable benefits that can comprehensively meet their family, financial, and healthcare needs.
Inclusive benefits help build equitable workplaces
As DE&I rise to the top of the HR priority list, benefits that actively address inequities among historically marginalized groups can help companies build more inclusive, equitable workplaces. Although there are several inequities and injustices facing your employees, your benefits strategy can help improve their health and happiness—and push your DE&I goals forward.
For example, care matching through telehealth can improve outcomes for your Black employees who might otherwise be subject to the inequities of the healthcare system at-large. For parents and parents-to-be, family health benefits like Maven can help improve access to care where your traditional health plan might otherwise leave them behind.
Maven is the discretionary benefit parents in your workplace need
As you compete for the best talent, it’s important to remember that some benefits are more impactful than others. Investing in the health and well-being of your employees and their families can boost employee productivity and engagement while reducing healthcare costs.
Maven is the largest virtual clinic for women's and family health and can help support your employees through planning, raising, and growing a family. Our digital family health platform empowers your employees to seek the care and support they need to navigate every phase of parenthood.
Interested in learning more about how Maven can help you expand your benefits? Get in touch.
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