Best Employee Benefits In 2023
FROM FORBES ADVISOR / BY DANA MIRANDA
Employees will always take more money if you offer it. But pay alone isn’t necessarily all it takes to attract and keep good employees. In a survey of employed workers and employers, Forbes Advisor found that 40% of employers say workers leave their job to find a role that offers better employee benefits. The survey also found that 62% of businesses have changed their benefit offerings in the past year. If you’re considering doing the same, keep in mind these new statistics about the best employee benefits.
Key Findings
Forty percent of employers say they believe workers leave their job to find employment that offers better benefits.
More than half of American workers (54%) report being content with the benefits their current employer offers.
One in 10 workers would take a pay cut to have access to better benefits.
Over 30% of 18–41-year-olds are most concerned with having pet insurance available as a benefit.
Nearly 40% of 42–57-year-olds are most likely to want mandatory paid time off from their employer.
Over 80% of employees older than 42 are looking for roles that include employer-covered healthcare.
Most Important Benefits for Workers
Employers were mostly in line with naming the top three benefits employees want, but employers’ understanding of employees’ preferred benefits drops off after that. Notably, employers undervalue the need for mandatory paid time off and overvalue employee discounts. While 30% of employers believe the latter is important, it doesn’t seem to be a priority for employees.
Employer-covered healthcare: 67% of employees and 68% of employers believe this to be the most important benefit.
Life insurance: 45% of employees and 43% of employers named this a top benefit.
Pension and retirement plans: 34% of employees and 34% of employers agree that planning for the future is vital.
Mandatory paid time off: Employees value mandatory paid time off more highly than employers are aware: 31% of employees named this a top benefit, but it didn’t reach the top five benefits among employers.
Mental health assistance: 33% of employers named this a top benefit while only 23% of employees listed it.
Most Important Culture Benefits for Workers and Employers
Employees and employers are aligned on the most important elements of company culture.
Work-life balance: This is the most valued element of company culture by a wide margin for both employees and employers: 51% of employees and 47% of employers named work-life balance as the top priority in company culture.
Building trust: Trust is definitely a two-way street; 20% of employees said it’s important to be trusted by their peers and superiors, and 27% of employers agreed building trust with employees is important.
Team camaraderie: Only 11% of employees and 8% of employers named camaraderie an important cultural benefit. Employers might need to explore avenues other than after-hours team-building to meet the goals of building trust and improving work-life balance for employees.
Most Important Remote-Work Benefits for Employees
Responses show both employers and employees might be unclear about what makes a remote role attractive. None of the benefits on our survey garnered a majority of responses, but employees and employers were aligned on some top needs such as schedule flexibility and reimbursement for supplies.
Flexible hours: Given that work-life balance is a top priority for both employees and employers, it makes sense that this benefit rises to the top for both, as well: 34% of employees and 40% of employers named flexible hours a top benefit for remote workers.
Work-provided equipment: 26% of employees and 34% of employers named this a top remote-work benefit. The majority of employees might be more content to use their personal devices for work, while employers might find it more important to provide employees with equipment that meets the company’s needs and offers the employer some amount of control to lock the device or monitor activity.
Home office stipend: Just 17% of employees and 20% of employers named this a top remote-work benefit, but it ranked third for employees and fifth for employers, showing how scattered priorities are for remote-work benefits.
Where Employers and Employees Are Misaligned on Remote-Work Benefits
Employers significantly misjudged the importance of virtual team-bonding activities for employees; 31% of employers named this a top remote-work benefit, while just 11% of employees said the same. Notably, it made it into the top five for both groups.
Another top-five benefit for employees, though only 6% of this group named it, is internet assistance. This perk didn’t break into employers’ top five at all. But this is worth taking note of because reliable internet service is vital to a remote worker’s ability to do their job, and employees may need to opt for more expensive internet service or hotspot backups to stay connected for work.
Remote-work perks that were more popular among employers than employees also included:
Four-day workweek
Child care assistance
Fitness perks
Finance resource planning
Some of these perks have gotten a lot of attention in the media in recent years, but it’s important to note what employees are actually asking for and not be distracted by what’s making the most noise.
Top Fringe Benefits for In-Office Workers
Employers are completely in the dark about which benefits are most important for in-office employees. Employees named several quality-of-life perks in their top five, while employers focused on the types of perks that they believe incentivize employees to be in the office instead of working remotely. Employees’ selections reflect an interest in prioritizing life outside of work and beyond a particular company. They want perks that provide work-life balance and professional development.
Flexible hours: A majority, 51%, of respondents said flexible hours are a huge concern of office life, reflecting the popular conversation of the past few years about work-life balance and adapting office life to be more inclusive and welcoming to various lifestyles.
Work-from-home options: 37% of employees said the option to work from home is important even for an in-office role, echoing the need for work-life balance.
Employee discounts: 24% of workers named discounts as an important perk for in-office work, even though it didn’t crack the top five of benefits overall.
Professional development: 20% of workers want employers to support their professional development — which could mean helping them advance within or outside of the company.
Four-day workweek: 19% of workers consider a four-day workweek important, which is in line with the other priorities that support work-life balance and flexibility.
Top Perks Employers Think In-Office Employees Need
Employers’ priorities reflect a trend of attempting to entice employees back into the office—while ignoring what they’re truly asking for. While flexible hours made the list, the percentage of employers naming this perk is well below the percentage of employees. Employers also prioritized team-bonding activities and company retreats, mirroring the importance employers put on team-bonding for remote workers.
Free drinks: 31% of employers named this as important, making it the most popular fringe benefit among employers, while it wasn’t near the top five for employees.
Flexible hours: Just 31% of employers consider this perk important, compared to more than half of employees.
Free snacks: In line with their perception of free drinks as important, 28% of employers considered free food vital, too.
Team-bonding activities: Just like they did for remote workers, employers overestimated the importance of team-bonding activities for in-office employees, with 26% of them naming this a top fringe benefit.
Company retreats: Related to their penchant for team bonding (and out of sync with employees’ interest in work-life balance), 20% of employers consider retreats an important benefit.
Benefits Employees Are Quitting Over
Contrary to what you might believe, salary isn’t the most obvious deal-breaker for employees. It’s an important element, but pay is rivaled by other forms of compensation in driving employees to move on to new opportunities.
Small business owners report thinking employees quit because they’re looking for:
Higher pay: 32% of employers named this a top reason they believe employees quit.
Better benefits: 26% of employers see this as a reason employees quit, likely a catalyst for the majority of companies that have adjusted their benefits packages recently.
Better advancement opportunities: 22% of employers imagine employees leave their current job because they could find more upward mobility elsewhere.
Flexible work-from-home options: 20% of employers acknowledge that employees quit over flexible working arrangements, though most employers still didn’t name these benefits among the most important.
The Majority of Workers Don’t Care About a Four-Day Workweek
Interest in a four-day workweek went up with age, but the majority of workers did not say they preferred a four-day workweek.
By age, those who wanted a four-day workweek include:
18–25 (12%)
26–41 (19%)
42–57 (24%)
58–76 (32%)
Interest in a four-day workweek was relatively low across the board, but workers 26 and older showed significantly more interest than younger workers, in some cases twice as much as workers 18 to 25. This might reflect a need for workers in later life stages to make room for caretaking work, or possibly their greater confidence in their ability to do a job more efficiently. The youngest workers might also be more comfortable with a five-day workweek if work provides the bulk of their opportunities for socializing and personal development.
Less Than Half of Workers Want To Work From Home
Despite media attention, remote work hasn’t swept the nation. The majority of workers surveyed did not say they preferred to work from home. However, working from home was most popular with workers between ages 26 and 57.
By age, those who wanted to work from home include:
18–25 (27%)
26–41 (41%)
42–57 (40%)
58–76 (38%)
Just like with a four-day workweek, a majority of workers did not say working from home was an important benefit for them, but interest was highest with workers in life stages most likely to have child care or other caretaking responsibilities. Younger workers, likely early in their careers, are also likely to have lower incomes, which could translate to less comfort or more distractions at home compared with workers later in their careers.
Conclusion: What Do These Statistics Mean for Small Businesses?
Small businesses often have less leverage than larger businesses to offer some of the shinier employee benefits big companies love to tout: gym discounts, in-office coffee bars and exotic company retreats. But the data shows that these aren’t top priorities for workers.
Cover the basics: find an HR software that will help you coordinate the provision of healthcare, retirement plans and life insurance. Beyond that, prioritize the benefits that support work-life balance for employees and showcase your understanding of their needs as a whole person beyond their role in your company. By listening to what employees truly want and saving money on the flashy, unnecessary perks, small business employee benefits can compete with bigger companies and create a workplace that attracts, supports and retains employees.
