Perks vs. benefits
Benefits are generally considered core services that are considered part of your total compensation, which may or may not be required by law. Perks are above-and-beyond extras intended to make working at the company seem more appealing.
Federally required benefits :
Provide employees adequate time off to vote, serve on jury duty, and serve in the military.
Comply with OSHA and workers’ compensation requirements.
Contribute to state short-term disability insurance.
Allow approved Family and Medical Leave Act (FMLA) leave.
Withhold and pay federal and state income taxes on your behalf.
Pay state and federal taxes toward unemployment insurance.
Surprisingly, these are not federally required benefits:
Health insurance. According to the Affordable Care Act (ACA), offering health plans is required if you’re a large employer with 50 or more full-time equivalent employees.
Retirement plans.
Dental, vision, and life insurance plans
Paid time off (PTO), such as vacation or sick days.
According to a PeopleKeep survey, only 79% of employers offer a PTO policy. Yikes. But 93% of employees say that PTO is a vital component of a benefits package.
Health, retirement, and PTO are now the table stakes
In a world where Americans typically can't afford health insurance unless they're working, let's go ahead and consider these vital three components as part of any competitive benefits package:
Health insurance
Retirement plans
Paid time off
These three categories of benefits have truly become ubiquitous and are often the table stakes of a candidate accepting an offer. Startups may be the only exception that tend to replace cash compensation with equity.
Typically, if a company can't be competitive in all three of these benefits angles, they likely won't be able to make up for it with perks. I can't think of anyone who would rather have a gym pass than a solid health insurance plan.
If you "can't afford it", consider adjusting your hiring practices to include remote workers, international candidates, reducing hours, or reducing hiring plans on your next roadmap.
Do not equate perks and benefits equally, even if they are monetarily equal. Getting a $150 gym pass every month is not the same as taking advantage of a 3% match that puts $150 of your employer's money into your tax-deferred 401(k).
Recognize that offering truly competitive salaries with robust benefits is what enables employees to come to work and focus on doing great work, not their finances.
So if your company is nailing all three, what's next? Check out our list of employee perks.
