Meanwhile, fringe benefits are types of compensation offered to employees in addition to the salary and wages they receive. Common benefits include overtime pay, medical insurance, life insurance, vacation leave, profit sharing, and retirement benefits.
It’s important to note that although the terms benefits and benefits are used interchangeably, they mean different things. Benefits are the non-salary compensation offered to employees, while benefits are additional rewards or incentives in addition to salary and benefits. Companies generally offer benefits to provide a better work experience that don’t necessarily come in the form of compensation. Examples of perks are company subsidized meals, employee discounts, and gym memberships.
Why companies offer benefits in addition to salary
Although people continue to look for higher paying jobs, companies with competitive advantages are getting a lot of attention from a large pool of talent.
There are many reasons why companies continue to offer better benefits – one of the most common is to increase job satisfaction. According to a study conducted by the Society for Human Resource Management (SHRM), 61% of employees said that benefits increased their job satisfaction. Providing benefits to employees that allow them to enjoy personal activities, enhance health security, and save money for future goals can boost morale, engagement, and productivity in the workplace.
Job seekers are always on the lookout for jobs that offer better wages and benefits. According to a Glassdoor survey, around 60% of those polled said they highly consider the perks and perks available before accepting a job offer. Providing competitive compensation and benefits makes companies more attractive to applicants.