When it comes to attracting and retaining employees, salary is just one part of the equation. A comprehensive benefits package that meets your team members’ holistic needs can significantly boost their financial security and overall well-being, thereby increasing the likelihood that they’ll stay with your company for the long term.
This guide will discuss how to offer competitive benefits for your employees, including some of the most sought-after perks.
How to build and roll out a competitive benefits program
Even without an enterprise-level budget, small businesses can still provide competitive benefits that support employees’ financial wellness, work-life balance, and overall well-being. Here’s how to do it.
Set a benefits budget
Determine how much your business can realistically invest in your enhanced benefits program. At a minimum, your business will need to cover a certain amount of paid time off (depending on your state’s regulations) and the employer fees and matching contributions for standard benefits like health insurance and retirement savings accounts. From there, research the costs of any additional employer-sponsored and/or voluntary benefits, and cross-reference that number with how much you plan to spend on each employee.
Choose benefits employees actually value
Seek your team’s input on their current benefits utilization (if applicable) and the offerings they’d most like to see. You can gather these insights via surveys, one-on-one conversations, and/or companywide town hall meetings.
Determine eligibility requirements
Clearly establish who is eligible for which benefits and under what conditions. While some benefits are required by law to be offered to all employees immediately, others can vary based on:
- Full-time versus part-time status. Full-time employees are typically more likely to be offered benefits, though some companies offer them to part-time employees as well.
- Duration of employment. Some benefits require a certain amount of time with the company; for example, enrollment in a 401(k) plan may require at least one year of service.
- Location. Eligibility requirements vary by state and, at times, by jurisdiction. All companywide benefits policies must comply with federal, state, and local requirements.
Ensure compliance with employee benefit regulations
Any employee benefits plan must also remain in compliance with benefit law. Some common violations include:
- Employee misclassification.
- Incomplete or inaccurate documentation of benefits.
- Inaccurate calculations of the vesting period, or the time an employee must work for an organization before receiving certain benefits.
- Violation of fiduciary duty, which requires an employer to act in the employees’ best interest.
- Failure to provide plan-related information to employees.
Clear and thorough procedures, continued monitoring of plan requirements, regular audits, and ongoing training sessions can reduce the likelihood of inadvertent errors.
Educate employees about the benefits program
Even the best-designed program won’t gain traction if your employees aren’t aware of it. Here’s how to best educate employees on their benefits options:
- Create a communication calendar with key touchpoints. While onboarding is the most obvious time to convey benefits information, you should also consider other touchpoints, including promotions, annual reviews, work anniversaries, and/or personal milestones (such as getting married or starting a family). Additionally, any new or changed offerings should be communicated as soon as possible.
- Determine what you’ll say and where you’ll say it. Ideally, benefits information should be conveyed in multiple modalities across multiple points in time. Consider an employee handbook write-up, a benefits “explainer pack” for new hires, and/or written communications in employee newsletters or other communication channels.
- Share the information and collect employee feedback. Follow your established plan to educate your employees about your benefits program, leaving time for them to ask questions, raise concerns, or share ideas.
Measure the impact of your program
As with any business initiative, you’ll need to measure how effective your benefits program is. The following key metrics can provide valuable insight into your program’s return on investment (ROI).
- Participation rates, e.g., percentage of employees enrolled, frequency of benefits usage, and any demographics-based participation data.
- Retention rates, e.g., turnover rates before versus after implementation, retention trends among employees who use the program, and reports from exit interviews on benefits-related issues.
- Business performance, e.g., employee engagement scores, productivity levels, and absenteeism trends before versus after implementation.
If your program shows a positive ROI, you can keep your current offerings while continuing to iterate based on available programs, your business’s budget, and your employees’ evolving needs.
If not, use this opportunity to determine any barriers to utilization or other factors that may be impacting engagement and retention. From there, you can make the necessary changes to ensure your program delivers genuine value.
[Read more: 6 Employee Assistance Programs Small Businesses Can Offer]
With student loan debt at an all-time high, employer-sponsored student loan assistance can provide your employees with financial relief and peace of mind.
Provide benefits that strengthen employees’ financial well-being
As an employer, you play an important role in supporting your employees’ financial well-being, one that goes beyond writing paychecks or giving year-end bonuses. Offering financial wellness and planning benefits can equip your employees with the knowledge and resources they need to improve their financial stability and achieve their goals.
If you’re seeking low-cost alternatives to raises that will strengthen your employees’ financial well-being, here are some high-impact benefits to get you started.
Work-related stipends and reimbursements
Stipends and reimbursements both offset the cost of your employees’ work-related expenses; the difference lies in how the funding is disbursed.
- A stipend is a fixed amount of money that employees receive upfront and can spend for a designated purpose.
- A reimbursement allows employees to submit claims for select out-of-pocket expenses and receive reimbursement later.
Common examples of stipend and/or reimbursement categories include:
- Home office equipment, including furniture and technology.
- Professional development, including courses, conferences, and educational materials.
- Food or meal allowance for business-related events.
- Travel and/or commuting expenses.
On-demand pay
While the traditional biweekly or twice-a-month payment cycles may work for many employees, offering flexible paydays can reduce financial stress for those living paycheck to paycheck or facing unexpected expenses.
On-demand pay, also known as earned wage access, allows employees to receive money they’ve already earned ahead of payday. Employees can use a self-service portal to request access to their funds (minus a small fee for early withdrawal). Once you approve the request, the employee can receive their funds quickly (typically the same day), without you having to recalculate your payroll.
401(k) matching
Employer 401(k) matching is a great way to encourage employees to save for their future. With 401(k) matching, your business adds a certain amount of money to an employee’s retirement account when they contribute to it. These contributions are also tax-deductible (up to 25% of the team’s total compensation), and small businesses can claim up to $5,000 in tax credits for setting up a 401(k) plan.
The most common formula for 401(k) matching is dollar for dollar up to 3% of an employee’s salary, or 50 cents per dollar on contributions up to 6%. However, before promising specific percentage contributions, consider what your business can safely afford.
Financial education and coaching
Financial anxiety, whether due to unexpected events or day-to-day stressors, can significantly impact employee well-being. Providing financial education opportunities helps your employees make the most of their money and achieve their long-term personal goals.
Some common offerings include:
- Online financial tools and apps for budgeting, saving, and retirement planning.
- Virtual or in-person financial education classes.
- Access to debt management services and/or one-to-one financial counseling.
Student loan assistance
With student loan debt at an all-time high, employer-sponsored student loan assistance can provide your employees with financial relief and peace of mind. The most straightforward way for employers to contribute is through small, recurring payments (whether directly to the lender or via the employee’s monthly paycheck). However, you can also set up a matching contribution program specifically for student loans, or allow employees to “cash in” their paid time off and apply it to their monthly loan payments.
Family stipends
A family stipend can relieve the financial burden associated with starting a family as well as caring for one. It’s a broad and inclusive category by design, allowing your employees to benefit regardless of the shape their family takes.
Some common costs you can cover with a family stipend include:
- Child care and/or elder care.
- Pet care.
- Family illness or injury costs.
- Fertility and surrogacy treatments.
- Adoption benefits.
- Bereavement costs.
[Read more: Best Health & Wellness Perks to Boost Employee Morale]
Voluntary digital benefits that expand your offerings affordably
Voluntary digital benefits are a collection of products that employees can opt into purchasing through their employer, often at a lower rate than market value. Unlike traditional benefits, these benefits are paid for primarily by employees through payroll deductions. Employees can customize their benefit packages to their needs, at minimal cost to your organization.
Below are some of the most popular voluntary benefits offerings you can add to your package.
Emergency fund access
According to a 2025 U.S. News survey, 42% of Americans don’t have an emergency fund, and 40% would not be able to cover a $1,000 emergency expense. A workplace Emergency Savings Account (ESA), sponsored by the employer, allows employees to automatically set aside a portion of their paycheck specifically for unexpected expenses. Employees can then access their emergency funds as needed (and without penalty, since these accounts are funded with post-tax dollars).
Disability insurance and life insurance
While workers’ compensation can help cover the costs of on-the-job illness, injury, or death, it doesn’t cover incidents that occur outside of work. Disability insurance and life insurance products can bridge that gap, providing additional financial security should an unexpected event occur.
- Disability insurance covers a portion of the employee’s income if they are unable to work due to an illness or injury. Short-term plans typically pay benefits for three to six months, while long-term plans cover 36 months on average.
- Life insurance guarantees payment to beneficiaries after an employee’s death. These funds can cover final expenses, pay off remaining debts, and supplement lost income. Employees can choose between term life insurance (coverage for a set period of time) and whole life insurance (the employee’s entire lifespan).
Dental and vision insurance
Because health insurance plans don’t typically cover dental and vision care, offering these as voluntary benefits can help round out your health-related offerings in a budget-friendly way. While employees are typically responsible for paying 100% of their monthly premiums (unless you enroll in an employer-sponsored program), purchasing insurance at a group rate is typically less expensive than paying at the individual level.
Voluntary dental and vision plans cover routine and preventive care and may cover basic procedures and products (such as dental fillings or prescription eyeglasses). They do not typically pay for cosmetic, extensive, or accident- or illness-related procedures.
Pet insurance
Many pet owners consider their pets part of the family and want to provide them with the best possible care in the event of illness or injury. Voluntary pet insurance can help cover expenses for accidents, acute illnesses, and treatment for congenital conditions. The exact cost typically depends on the level of coverage selected, geographic location, and pet specifics (e.g., species, breed, and age).
[Read more: What to Know About Allowing Pets in the Office]
Identity theft protection
Identity theft and related scams have been on the rise in recent years. If an individual’s personal information is compromised, it not only impacts them but also potentially their families and even their organizations.
In these situations, identity theft protection can provide an extra layer of security by flagging suspicious account activity (such as new credit card applications, fund transfers, or address changes). It can also reimburse costs associated with identity theft and scams, including lost wages, legal and/or accounting fees, and child care costs.
A well-rounded benefits package can set your small business apart in today’s competitive labor market. By combining core offerings with voluntary perks and digital options, you’ll create a workplace where employees feel supported, valued, and motivated to stay for the long term.
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