Employee Benefit Plans and Strategic Advantages


Employee benefit plans have been designed to provide workers with financial security to manage unexpected life situations. While it has been widely recognized that such programs are essential, lack of attention has been given to the value they can bring to both employees and their employers. The paper aimed to answer the question of how valuable are employee benefit plans. Among the most prominent advantages are the following: the reduction of costs, strategic benefits, compliance with Corporate Social Responsibility efforts, and the overall improvement of workers’ physical and mental well-being.


Employee benefit plans refer to sponsorships offered by employers to provide workers with paid services and support their welfare. As a rule, employers hire a group insurance provider to protect employees and manage such procedures as claims, payments, and reimbursements. In their essence, employee benefits are a form of non-salary compensation that varies from one organization to another (Doyle, 2017). They are provided to employees in addition to salaries and create competitive packages to attract skilled personnel. While the purpose of benefit plans is commonly known, there is a lack of information regarding the value of such programs, especially in real-life situations.

Strategic Advantages

The first advantage of employee benefit plans is strategic. Employers want to attract and retain talented and committed workers; therefore, they need to develop appropriate conditions to elevate employees’ moods and boost overall productivity. Workers tend to worry about the increasing costs of health care and retirement security; thus, they try to look for companies that offer the best benefit solutions. According to the Insider report by Gardner and Nyce (2014) on the Towers Watson’s 2013/2014 Global Benefits Attitudes Survey, the attraction value of both retirement and health benefits peaked in 2011 and continues influencing employees’ retention in the workplace. It is crucial to mention that for companies, retention stands higher on the agenda than attraction since the percentage of employees who say that benefits attracted them to their job tends to decrease with time (Gardner & Nyce, 2014).

Nevertheless, benefit plans can become valuable tools for employees to attract and retain skilled personnel to contribute to the competitive advantage of the business. As a rule, more generous and secure retirement programs can create stronger connections between employers and employees. When benefits are absent or lacking in coverage, they serve as the basis for employees’ financial worries thus contributing to distractions and degradation of their productivity and engagement (Gardner & Nyce, 2014). Ultimately, this can decrease performance and offset direct savings.

Benefit Plans and Corporate Social Responsibility

The second value of employee benefits refers to Corporate Social Responsibility (CSR) to ensure employees’ overall well-being. According to Cheeseman (2016), companies that exhibit strong CSR with regards to benefits have more engaged employees since most of them want to work for businesses that take care of them as individuals. Many workers feel that their personal lives and work are becoming blended; because of this, companies need to reconsider the needs of their personnel and offer benefits and perks that could support them.

Regarding the connections between CSR and employee benefits, it is crucial to mention that workers not only require health insurance (94%) and a competitive financial package (92%) but also want their employers to support issues that matter (Cheeseman, 2016). Interestingly, an effective combination of employee benefit plans and good CSR programs can be used by companies to retain and recruit their workers. As mentioned by Cheeseman (2016), 74% of employees said that their work was more fulfilling when they had opportunities to work on social and environmental causes. Also, 70% stated that they were more likely to be loyal to their company if it allowed them to take part in important issues and causes (Cheeseman, 2016). This shows that employee benefit plans should not include only payments; employers must invest in providing their workers with opportunities to participate in social affairs.

Employee Wellness, Cutting Costs, and Benefit Plans

Another advantage of employee benefit plans and programs is associated with the overall improved well-being of workers. Through enhancing the welfare of employees and helping them to have a better balance between life and work, companies will witness an increase in organizational capabilities. To accomplish the goal of improving the mental and physical state of employees, businesses turn to wellness not only as a benefit but also as a cost management tool. Currently, 93% of large companies offer wellness programs to complement employee benefits; such programs are linked to weight loss, smoking cessation, personal health coaching, nutrition and healthy living classes, web-based resources and newsletters for healthy living, and many more (“The value of employee benefits,” 2017).

It has also become a trend for employers to offer education to employees on how they can effectively use their health plans. Only one in ten ensured workers understands how to take advantage of their wellness screenings even though benefit plans usually cover all costs. In most cases, workers use their benefits when they are sick. For this reason, employers should promote wellness programs to benefit employees not only financially but also physically and mentally. Efforts targeted at the improvement of employees’ well-being are linked to better physical and mental health, increased productivity in the workplace, decreased stress and reduced absenteeism, as well as fewer health risk factors (“The value of employee benefits,” 2017).

The value of wellness-based employee benefit programs extends to monetary savings for companies. If designed correctly, wellness initiatives can save up to four dollars for each dollar invested, and for every employer that has chosen to embrace wellness-based programs, the return on investment is forty cents per dollar (“The value of employee benefits,” 2017). Well-developed programs have the potential to reduce annual health costs and absenteeism by 26% and 27% respectively (“The value of employee benefits,” 2017). This occurs because companies that develop wellness programs can prevent employees from experiencing serious health problems that limit their productivity.

Concluding Remarks

By offering their workers benefits, companies show what is most important for them when it comes to treating employees the way they deserve. The research on employee benefits plans showed that both workers and companies for which they work could acquire value in the form of cost reduction, competitive advantage in terms of attracting and retaining workers, promotion of social responsibility efforts, and the improvement of the overall well-being of employees. It is recommended that companies take time to develop comprehensive employee benefit programs and cater to them to the needs of their workers. If businesses fail to do so, they risk experiencing demotivation, dissatisfaction, lower performance, higher attrition, and employee turnover as a result.


Cheeseman, G-M. (2016). How CSR programs benefit employees. Web.

Doyle, A. (2017). Types of employee benefits and perks. Web.

Gardner, J., & Nyce, S. (2014). Attracting and keeping employees: The strategic value of employee benefits. Web.

The value of employee benefits. (2017). Web.

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