Better Benefits Are Outpacing Bigger Salaries

The shift in size and role that employee benefits play as a part of the overall compensation package in the past few years has been significant.

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This recent piece in Entrepreneur makes the case that both employees and their employers are better served by compensation packages that are weighted more toward benefits than salary than they may have historically been when the labor market is saturated and the competition for top talent, tight. 

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Top 3 Reasons Better Benefits Beat Higher Salary

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1. Tax Advantages: The number one reason to consider boosting benefits instead of simply incrementally increasing salaries are the accompanying tax advantages. Many benefits are not considered taxable income for the employee, and just about all benefits are tax deductible on the employer’s side, so any qualifying benefit that employees would have purchased anyway whether or not the employer was offering it (e.g. health insurance) is essentially purchased tax free using earnings that were themselves untaxed. 
2. Better Employees: By providing a comprehensive, thoughtful, and generous benefits package, employers display their investment into their employees over a long-term timeline that can lead to significant improvement in retention and job satisfaction - not to mention healthier, more productive employees. Comprehensive benefits packages also tend to make employees more productive as a result of having somewhat fewer issues to worry about and distract them from their work, like stress about retirement or concerns about whether or not they can afford the child care they need.
3. Better Culture: Benefits packages are a key foundation on which to build company culture in that they in many ways set the parameters of the partnerships formed between employers and employees. Not only do employee perks and benefits help define those relationships - from incentive alignment to schedule flexibility/rigidity - but they also can help your company stand out from the crowd and reflect that culture to clients, business partners, and potential applicants outside the organization, as well.

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You can read more about this topic here.