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Are You Getting the Best Benefit From Your Employee Benefits?

By Susan M. Heathfield,

Benefits are a form of compensation paid by employers to employees over and above the amount of pay specified as a base salary or hourly rate of pay. Benefits are a portion of a total compensation package for employees. A comprehensive, common set of benefits includes:

    * paid time off such as PTO, sick days, and vacation days,
    * health insurance,
    * life insurance,
    * dental insurance,
    * vision insurance,
    * paid prescriptions,
    * retirement benefits: 401(k) plan or a pension,
    * flexible spending accounts4, and
    * long term and short term disability insurance.

In addition to these basic benefits, employers might offer relocation assistance, legal assistance, child care benefits, employee discounts, and more. See: Getting the Best Benefit From Your Benefits?

In the United States, on average, organizations spend 43 cents for benefits for every dollar of payroll. Research reported in the journal, Personnel Psychology, suggests that employees only understand and appreciate between 31 and 68% of the cost or market value of the benefits they receive from their employer.

Employees undervalue their benefits for many reasons including:

    * employers communicate the value of the benefits poorly and infrequently,
    * the employees have little or no choice in selecting benefits packages or options, and
    * the employees misunderstand the market value of their benefits and the additional cost of their compensation package to employers.

For employees to understand the value of the benefits they receive, employers must educate employees and family members and provide benefits statements that share the true cost of the benefits

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