Key Takeaways
1. In today’s competitive job market, it’s important for employers to not only offer employees a competitive salary but also a comprehensive benefits package that meets their needs and preferences.
2. Many employers offer supplemental benefits which provide additional financial security and support for their employees as a way of gaining a competitive advantage in today’s marketplace.
3. Salary alone is no longer the sole motivator for many employees when evaluating a job offer. Instead, benefits have become one of the most important factors in their decision-making.
4. Supplemental benefits are non-mandatory benefits provided by employers to enhance their employees’ compensation packages and improve their quality of life and overall job satisfaction.
5. Supplemental benefits typically include Life and Accidental Death and Dismemberment (AD&D) insurance, dental and vision insurance, and retirement plans.
Offering supplemental benefits can be a powerful tool for companies looking to differentiate themselves in today’s competitive job market. In a bid to secure top candidates and retain existing talent, offering employees a comprehensive and attractive benefits package can assist companies in gaining a competitive edge.
For a growing number of employees, salary alone is no longer the primary motivator when evaluating a job offer. These days, benefits are often one of the most important factors for employees when considering a company or deciding to stay with a current employer as highlighted by a Glassdoor survey which reveals around 60% of respondents strongly consider perks and benefits offered before accepting a job offer. In addition, 80% of employees prefer additional benefits over a pay increase.
By offering employees valuable benefits that go beyond the basics, companies can create a more driven and dedicated workforce that is more inclined to remain committed and contribute to their success in the long term.
What is the definition of supplemental benefits?
Supplemental benefits are additional employee benefits that go beyond the traditional benefits package offered by employers, such as healthcare coverage, retirement plans, and paid time off.
Today, many employees are seeking companies that promote their health and well-being, as well as that of their families. Supplemental benefits are designed to complement basic benefits by providing employees with additional financial, physical, and emotional support, and can include a range of offerings, such as dental and vision insurance, accident coverage, financial incentives, as well as health and wellness programs.
What is the difference between supplemental benefits, fringe benefits and statutory benefits?
Employers can provide various benefits to their employees, and while some of these are mandatory, others are not. The range of benefits includes supplemental benefits, fringe benefits, and statutory benefits and each type of benefit is governed by different laws and regulations.
- Statutory benefits are mandatory benefits
- that employers are required by law to provide their employees. These benefits will vary depending on each country’s specific laws, but often include publicly managed health insurance, pension, and holiday entitlement. As employers are legally required to provide these benefits to their employees, failure to do so can lead to significant consequences such as fines, penalties, and even imprisonment for the employer, as well as potential legal action from affected employees.
- Supplemental benefits, unlike statutory benefits, are not required by law and are additional benefits
provided by employers to enhance their employee’s compensation package and improve their quality of life and overall job satisfaction. These benefits go beyond the mandatory benefits that ensure employers’ compliance with local labor laws and provide more extensive coverage for both employees and their families. Supplemental benefits may include dental and vision insurance, life insurance, disability insurance, and health and wellness programs. These benefits are often optional, and employees may have to pay some or all of the costs associated with them.
Fringe benefits are additional benefits that employees receive on top of their normal salary. Sometimes referred to as benefits-in-kind, these non-monetary benefits are designed to enhance an employee’s overall compensation package and improve morale and retention. Common examples of fringe benefits include company cars, gym memberships, housing allowance, and allowances for travel expenses or meals. While there is some overlap between supplemental benefits and fringe benefits, the main difference is that the former are typically designed to meet employees’ basic needs and protect them against financial risks, while fringe benefits are considered more of a luxury or ‘perk’ of the job.
Understanding the differences between these different types of benefits is essential for employers when designing their employee compensation packages and ensuring they are compliant with all applicable laws and regulations.
What are the main types of supplemental benefit?
Below are some examples of supplemental benefits that not only add to any statutory benefits provided by a company but also provide an appealing and competitive incentive for employees.
- Retirement benefits: To ensure the financial well-being of their employees, employers may choose to provide retirement plans. While pension plans are often mandatory benefits offered by employers, limits on annual contribution amounts can lead employers to offer additional retirement benefits. Such supplementary pension plans not only offer tax benefits but may also often include employer contributions beyond those required by law, allowing employees to maximize their retirement savings and better secure their financial future.
- Health and wellness benefits: Employers may provide health and wellness benefits to employees in the form of on-site fitness classes, wellness programs, and mental health services such as counseling, therapy sessions, or mental health screenings to help employees manage stress, anxiety, or other mental health issues.
- Dental and vision coverage: These benefits provide employees and their dependents with dental and vision coverage allowing them to maintain good oral and eye health. Dental coverage typically includes preventive and restorative services such as cleanings, fillings, and extractions, as well as access to affordable dental treatment such as orthodontics and surgery. Vision care benefits typically cover routine eye exams, glasses or contact lenses, and other eye-related services.
- Life and AD&D Insurance: Life and Accidental Death and Dismemberment (AD&D) Insurance are types of insurance that offer financial protection to employees and their families in the event of unexpected circumstances, such as death or dismemberment. Supplemental life insurance provides benefits to the beneficiaries to cover expenses such as funeral costs, mortgage payments, and income replacement while AD&D insurance provides coverage for fatal and non-fatal accidents resulting in injuries such as dismemberment or loss of eyesight or hearing.
Supplemental benefits managed — with Horizons
At Horizons, we understand that every business has unique needs when it comes to benefits administration. As a global PEO, we offer a comprehensive range of solutions to meet the specific needs of your business, providing expert international benefits administration services to ensure that your employees receive the benefits they need, no matter where they are based. Contact us today to find out more.
Frequently asked questions
Supplemental benefits are not mandated by law and are typically offered by employers as a way to enhance their overall compensation package to help them attract and retain employees.
