A woman prioritizing the benefits she offers to her employees.

A simple chart to help businesses prioritize employee benefits

The job market has evolved far beyond boilerplate pensions and lifelong employees. Winning top talent today means distinguishing your business by providing benefits and perks that respond to fluctuating trends.

The winning combination is probably a mix of established ideas (such as the bedrock of company health insurance) and new ones that were shaped by the pandemic (more flexible schedules).

This simple chart organizes benefits into a hierarchy according to cost to the employer—as well as tiers within each price level to show which benefits tend to be more foundational. This may help you set or adjust your priorities for 2022.

The employee benefit hierarchy

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Tier 1 Tier 2
  • Flexible schedule/remote work
  • Pet insurance (voluntary)
  • Employee recognition tailored to a more scattered workforce
  • Clothing theme days (T-shirt Tuesdays, etc.)
  • Bring-your-dog-to-work day
  • Office chili cook-off

The benefit to you

Flex time has become a core concern. And voluntary pet insurance has boomed, with an average annual growth rate of 22% the last five years.

The benefit to you

Think in terms of a more imaginative “casual Fridays” updated for the 21st century. These more creative and frivolous perks may boost morale or encourage team building but can’t be the primary drivers of recruitment and retention.

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Tier 1 Tier 2
  • Food/meals for employees
  • Extra days off
  • Flu shots/over-the-counter health care
  • Gym access/membership (including virtual workout options)
  • Discounts for tickets/retailers
  • Stipends for home office/work supplies

The benefit to you

Food and extra time tend to be the most popular extra perks a business owner can buy, because they’re the most universal. And they can be adapted to the pandemic—for instance, food trucks as a safer, more distant alternative to pizza boxes stacked in a stuffy conference room.

The benefit to you

The Centers for Disease Control and Prevention (CDC) encourages employers to offer workplace flu vaccines—because it benefits the business as much as employees. Your local chamber of commerce or a similar civic group may be a conduit to good deals on discounts for events or retailers.

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Tier 1 Tier 2

The benefit to you

Do employees feel fairly compensated for their work? Can they rely on you to help provide them quality health care and ample personal time now and access to retirement plan savings? These core benefits are the most persuasive in the job market.

The benefit to you

Help employees customize their personal protection, medical care, and financial savings to better suit individual needs.

Next steps

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other professionals on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

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