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Total Job Benefits vs. Total Employee Compensation

A desk with a calculator, glasses, a laptop and notebook with "Total Job Benefits vs. Total Employee Compensation" written In the realm of employment, the discussion often revolves around salary or wages as the primary form of compensation. However, a comprehensive understanding of compensation encompasses more than just monetary payment. It includes an array of benefits and perks that contribute significantly to an employee’s overall satisfaction and well-being. Two fundamental components of this broader compensation spectrum are total job benefits and total employee compensation. While these terms are sometimes used interchangeably, they represent distinct facets of an employee’s remuneration package. We’ll delve into the intricate differences between total job benefits and total employee compensation, exploring their definitions, components, and implications.

Total Job Benefits: Enhancing Quality of Work Life

Total job benefits encompass the non-wage perks and advantages provided by an employer to enhance an employee’s quality of work life. These benefits extend beyond mere financial compensation, aiming to support employees in various aspects of their lives. Here are some key components of total job benefits.

Healthcare Benefits

One of the most crucial aspects of job benefits is healthcare coverage. Employers often provide health insurance plans that cover medical, dental, and vision expenses for employees and their dependents. This coverage alleviates the financial burden associated with healthcare services, ensuring employees can access necessary medical care without substantial out-of-pocket expenses.

Retirement Plans

Many employers offer retirement savings plans, such as 401(k) or pension plans, to help employees plan for their financial future. These plans often include employer contributions, matching a portion of the employee’s contributions, thereby facilitating long-term financial security for employees.

Paid Time Off

Paid time off, including vacation days, sick leave, and holidays, allows employees to take time away from work while still receiving their regular pay. This benefit promotes work-life balance, enabling employees to recharge, attend to personal matters, and spend time with family and loved ones.

Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)

FSAs and HSAs enable employees to set aside pre-tax dollars to cover qualified medical expenses. These accounts offer tax advantages and flexibility in managing healthcare-related costs, including deductibles, co-pays, and prescription medications.

Life and Disability Insurance

Employers may provide life insurance coverage to employees, offering financial protection to their families in the event of death. Additionally, disability insurance ensures income replacement for employees who are unable to work due to illness or injury, safeguarding their financial stability during challenging times.

Tuition Assistance and Professional Development

Some employers invest in their employees’ ongoing education and professional development through tuition assistance programs or reimbursement for job-related courses and certifications. These initiatives promote continuous learning and skill enhancement, benefiting both employees and employers.

Total Employee Compensation: Beyond Monetary Payment

Total employee compensation encompasses the entirety of an employee’s remuneration package, including both monetary and non-monetary components. While salary or wages constitute a significant portion of total compensation, it is augmented by various benefits and incentives provided by the employer. Here are the key components of total employee compensation.

 

Base Salary or Wages

The base salary or wages represent the fixed monetary payment provided to an employee for their work. It serves as the foundation of an employee’s compensation package, reflecting their skills, experience, and contribution to the organization.

Bonuses and Incentives

Employers may offer bonuses, commissions, or performance-based incentives to reward employees for achieving specific goals or exceeding performance expectations. These monetary rewards serve as motivators, encouraging employees to strive for excellence and contribute to organizational success.

Stock Options and Equity Grants

In addition to cash bonuses, some companies offer employees the opportunity to acquire ownership stakes in the organization through stock options or equity grants. This aligns the interests of employees with those of shareholders, fostering a sense of ownership and incentivizing long-term commitment.

Overtime Pay

For non-exempt employees who work beyond the standard hours prescribed by labor regulations, overtime pay is provided at a premium rate. This additional compensation acknowledges employees’ extra effort and ensures fair remuneration for their time and dedication.

Employee Benefits and Perks

Total employee compensation includes various non-monetary benefits and perks, such as healthcare coverage, retirement plans, paid time off, and other job-related benefits. These offerings contribute to the overall value proposition for employees, enhancing their job satisfaction and overall well-being.

Recognition and Rewards Programs

Employers may implement recognition and rewards programs to acknowledge employees’ contributions and achievements. These initiatives can take various forms, including awards, public praise, or special privileges, reinforcing positive behaviors, and fostering a culture of appreciation within the organization.

Understanding the Differences:

While total job benefits and total employee compensation are interrelated, they differ in several key aspects:

 

  • Composition: Total job benefits primarily consist of non-monetary perks and advantages provided by the employer, such as healthcare coverage, retirement plans, and paid time off. In contrast, total employee compensation encompasses both monetary (e.g., salary, bonuses) and non-monetary (e.g., benefits, perks) components.
  • Visibility: Salary or wages are easily quantifiable and visible components of total employee compensation, directly impacting an employee’s take-home pay. On the other hand, job benefits, such as healthcare coverage or retirement plans, may be less visible, but significantly contribute to an employee’s overall compensation package.
  • Flexibility and Customization: Job benefits are often structured by the employer and may have limited flexibility for customization by individual employees. In contrast, total employee compensation can vary based on factors such as negotiation, performance, and individual preferences, allowing for greater customization and flexibility.
  • Long-Term vs. Short-Term Impact: While salary or wages provide immediate financial rewards, job benefits such as retirement plans or equity grants have long-term implications for an employee’s financial security and well-being. Total employee compensation encompasses both short-term and long-term incentives, balancing immediate gratification with future-oriented rewards.

Striking a Balance

In conclusion, total job benefits and total employee compensation are integral components of an employee’s overall remuneration package, each contributing uniquely to their quality of work life and financial well-being. While total job benefits focus on non-monetary perks and advantages provided by the employer, total employee compensation encompasses both monetary and non-monetary components. Understanding the distinctions between these two concepts is essential for employers seeking to attract, retain, and motivate top talent.

 

By offering a comprehensive compensation package that balances salary, benefits, incentives, and perks, organizations can create a compelling value proposition for employees, driving engagement, satisfaction, and performance in the workplace. Ultimately, achieving a harmonious balance between total job benefits and total employee compensation is key to building a thriving and resilient workforce in today’s competitive labor market. To get free quotes, or more information about group health insurance plans, give EZ a call! Our agents can help you find the best plan for your company and save you hundreds of dollars a year. Call 877-670-3531 to contact one of our highly trained agents. We can help answer any of your questions and get you started today!

Most Common Employee Benefits

One of the best ways to attract and retain the best employees is to offer competitive benefits. These benefits can come in many forms and are an important part of any employee’s compensation package. One of the most important benefits to most employees is health insurance; in fact, 56% of employees would prefer a healthcare plan to a raise! When you offer employees benefits such as health insurance, they are not only healthier, but happier. And what comes of happy employees? Higher productivity that helps boost your bottom line! So take a look at your budget, and see if you can consider offering one (or more) of these common employee benefits.

How to Structure Your Benefits Plan

a man standing at a crossroad with one green sign pointing right to daylight and a red sign pointing left to a dark night
You have 2 choices when it comes to offering health benefits to your employees.

Generally businesses utilize two different structures when it comes to offering employee benefits:

  • Organizational-oriented benefits: Employers offer employees specific or defined benefits, such as traditional health insurance, a pension or other retirement plan, or wellness program. These benefits are employer-owned and employer-selected.
  • Consumer-oriented benefits: Employers offer employees employer-funded dollars to purchase their own benefits. When it comes to healthcare, this can be something like a QSEHRA or ICHRA, both of which would allow you to reimburse your employees for wellness and medical expenses. 

Health Insurance

Health insurance is a must for many people when they’re looking for a job, and also the reason that many employees choose to stay in a job. In fact, research shows that 78% of employees are more likely to stay with an employer if they are offered health insurance. Many employees are interested in traditional healthcare plans, because they provide the most comprehensive benefits for them and their families. 

silhouette of a group of people with a red heart behind them

If you choose not to offer a traditional health insurance policy, you do have other options, but not offering any kind of healthcare plan can end up costing you. Losing even one employee can cost you 50-400% of their  annual salary. If you are unsure whether you can afford a group health plan, remember that there are a variety of group health insurance plans to choose from, and many are more affordable than you might think. This is especially true when you consider how important this benefit is to employee retention! To find out what plan is right for you, speak with an EZ agent. 

Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs)

In addition to offering a healthcare plan to your employees, you can also choose to offer a FSA or HSA. Both of these types of accounts allow employees to put tax-free money aside for qualified medical expenses, but they have a few differences. FSAs work with nearly any health insurance plan, but if your employee does not use the money by the end of the year, then they will lose it. With a HSA, the money employees put aside will continue to roll over for as long as they have the account. Unlike FSAs, though, HSAs must be paired with a High Deductible Health Plan.

Dental & Visioncaucasian woman in a suit holding up a large picture of her smile over her face.

You can also choose to offer your employees dental and vision care. Dental and vision coverage is cheaper than health insurance and so is much more affordable to offer. Employees with families or those who have issues with their vision will find these benefits especially important.

Retirement Savings Plan

A retirement savings plan, or 401(k) plan, is a great way to help your employees save towards their retirement. You can offer a certain amount to match their contributions. For example, many companies offer up to a 4% match to what their employees contribute to the plan. 

Paid Time Off

This is a great benefit to offer your employees. Being able to go on vacation and get paid for it is great for your employees’ morale. In addition, being able to call in sick and not have to worry about losing a day of pay is essential for many, especially employees with families. 

cutout of a person with a blue umbrella over them and short term disability coverage underneath them
Short term disability offers employees their pay until they can return to work.

Short-Term Disability

Offering short-term disability means that employees will continue to get paid if they cannot work after experiencing an injury or illness. Employers continue to pay a percentage of employee’s income until they are able to come back to work. 

Wellness Programs

These programs have grown in popularity over the years. Wellness programs help employees get healthier by providing benefits such as gym membership stipends. These programs don’t need to focus solely on physical health: according to one study, 73% of employers have mental wellness programs for their employees.

When it comes to choosing which benefits to offer your employees, you can’t go wrong with  health insurance. If you are looking for a group health plan, there are some things to consider, such as making sure you are following state regulations, and that you are getting the most benefits for the best price. EZ.Insure agents can check all these boxes and more, because we work with the top-rated health insurance companies in the nation. We will compare plans in your area and find a plan that fits your budget, and makes your employees happy. To get free instant quotes, simply enter your zip code in the bar above, or to speak to an agent, call 888-998-2027.

EZ Can Help You Cut Group Insurance Costs, Not Benefits

HMO, PPO, and POS, oh my! These are just some of the many different types of group health insurance options on the market. While it’s good to have options, having so many of them can make choosing a healthcare plan intimidating. There are many factors you have to consider, from the types of benefits offered, to your employees’ needs, to your own bottom line. Group health insurance can be costly, but there are ways to cut costs and keep benefits. That’s where EZ.Insure comes in. We are experts in the insurance industry, and so will find you the best value for your money by assessing the needs of both your business and your employees.

Assess Your Employees Needsmagnifying glass over a many clustered pictures of people

Finding out what kinds of benefits are important to your employees is the first step in deciding what kind of plan to offer. For example, some employees will have a family they need coverage for, some will need extra coverage for chronic health conditions, while others will just want the basics. One way you can figure out what your employees want in a healthcare plan is by distributing a health survey. 

Remember to assess your employees’ plans on a yearly basis, because what worked well for them one year, might not work the next year. 

Make Your Premium Dollars Count

pink piggy bank next to a jar that has money in it labeled HSA
HSAs allow employees to put aside pre-tax money to help offset the out-of-pocket expenses of a high deductible plan.

When choosing a plan, you also need to consider how much cost sharing you can afford. The cost of monthly premiums are generally shared by employees and the employer, and the more you contribute, the more likely your employees are to enroll in your plan. There are ways to save both you and your employees money while still offering them quality insurance. For example, if you choose an ACA Bronze plan and pay 100% of your employees’ premiums, you will still be saving more money than if you were paying a lower percentage of a high premium Gold plan.

If you decide to offer your employees a plan with a lower premium but a high deductible, and decide to pay either most or all of the cost of their premiums, consider also offering a health savings account (HSA). These accounts allow employees to put aside pre-tax money to help offset the out-of-pocket expenses of a high deductible plan. They’ll be saving money on premiums and will be able to put more money into their HSAs. This way, they’ll be more likely to seek care and remain healthy, which can save you money in the long run.

many boxes on one side of a scale and one box on the other side being weighed down.
Comparing plans with one of our agents is the best way to make sure that you know what all of your options are.

Compare ALL Available Plans

The more you know, the less you spend. Not only are there HMOs, PPOs, and POS plans, but there are also the metal tier plans from the ACA, QSEHRA, and more. Comparing plans with one of our agents is the best way to make sure that you know what all of your options are. EZ’s agents are trained, licensed, and highly experienced with all the different types of group plans, and they know what will work best for you and your employees.

Our agent will navigate through all the plans to find the most coverage for your employees, while keeping more money in your pocket. We get how time consuming and irritating it can be to comb through all the different group plans in your area. We will provide you with a personal agent who will assess everyone’s needs, and compare all of the plans available within minutes. All of our services are free, and there are no obligations. To get free quotes, enter your zip code in the bar above, or to speak to an agent, call 888-998-2027.

Survey Says: Find Out What Benefits Employees Want

If you run a small business, odds are you’re on a tight budget. But you’re still looking to recruit and keep the best employees. So you may have to make choices when it comes to the compensation you offer your workforce. Should you pay them a little bit more? Should your benefits package be more generous? 

drawing of a blue wallet with cash sitcking out of it.
If you are on a tight budget considering ways to make employees happy, syrvets show they would prefer health insurance over more pay.

While your first instinct might be to think most people would choose extra cash, most employees would actually choose more perks, most notably healthcare coverage. It is worth your time to ask your employees what perks are most important to them, and to survey them about their healthcare priorities.

How Valuable Are Benefits?

Consider this: various studies have been done asking employees whether they would prefer better benefits or more pay, and the results are clear. The tests might be different but the results were the same: around 80% chose benefits over money. Employees feel happier with their job and are more likely to stay (or join your team) if they are offered perks that improve their lives and make them feel valued. 

Some of the things you can offer are relatively low-cost, such as more vacation time, more flexible hours, or work-from-home options. However, the most coveted benefit is also the most expensive: healthcare.

What Employees Want Most

young caucasian woman in light vlue button up with side braid and both thumbs up.
Healthy employees who feel valued are going to be more productive and loyal.

If your business has fewer than 50 employees, there is no law requiring you to offer group health insurance. However, studies about employee benefits also show that what workers want most is health insurance. While paid time off was an obvious second-runner up, a majority (at least 40%) said that healthcare was their top priority in all studies.

So if you’re feeling pulled in all directions financially, this is a clear indication that your money is best spent on offering a group health plan to your employees. After all, healthy employees who feel valued are going to be more productive and loyal – not to mention there are perks in it for you, too (like tax advantages).

Take the Time to Ask

As stated above, it just so happens that the most desirable benefit is also the most expensive. But there is an often overlooked way to find the best plan for your employees: a health benefits survey. If you find out what your employees’ wants and needs are, you can then find a plan that is as tailored to them as possible. You will also get more accurate pricing if you know exactly what you are looking for, and will save money by cutting out any unnecessary extras.

Making an Employee Healthcare Survey

How do you go about making a healthcare survey for your employees? The first thing to remember is that, because of HIPAA (Health Insurance Portability and Accountability Act),  you cannot ask them specific questions about their health. The survey must also be anonymous. Think questions related to the type of coverage they want. Here are some examples:

paper with green checkmarks on it and lines with a pencil over it.
Make an employee health insurance survey but make sure to not ask specific questions about their health.
  • How important is it that your employer offers health insurance to you? You can then ask them to rank their answer based on a number scale or from “not important at all” to “very important”
  • How much would you be willing to spend each month for health insurance coverage?
  • Would you prefer paying more each month for insurance but paying less when you see a doctor? Or would you prefer paying less each month and more when you see a doctor? You may be able to offer them a high deductible health plan that includes a tax-advantaged HSA.
  • What type of network of doctors and specialists would best meet your needs? You can ask them if they would be comfortable with a smaller local network instead of a larger or even nationwide network.
  • Are there any doctors or hospitals that you would specifically like to be included in your healthcare network?
  • How many family members would you like to cover with your plan?

By taking the time to ask the simple questions above, you will have a good idea of where to start when looking for a plan to cover your employees. Offering the right benefits might seem like an expense or a headache, but it can make all the difference in finding – and keeping – the right employees. And remember, EZ.Insure is here to help you every step of the way with finding the right plan for you and your employees. We can connect you to your own personal agent who will steer you in the right direction – for free! You will never be hounded by endless calls and you will always get the most accurate information. We promise everything will be quick, easy – and did we mention, free? To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing or calling 888-998-2027.

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