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Job Perks: The Benefits of Employee Benefits

From the August 2010 South Dakota e-Labor Bulletin

Having a job is one thing. But having a job offering employee benefits is another. Employers are not required to offer perks such as medical insurance, paid time off, or retirement plans, but many of them do. In a competitive market, an impressive benefits package is often the bait that attracts and maintains the best employees.

Two of the "main attractions" tending to draw employees are medical insurance and a retirement plan. With the growing expense of each, their attraction may carry nearly the weight as the salary itself. Alternatively, certain other benefits may be more valuable to other employees depending on their particular situation. For example, a frequent traveler may find the most benefit in a nice paid leave package. A busy mom may be attracted most to flexible scheduling.

The Labor Market Information Center of the South Dakota Department of Labor recently completed a study of employee benefits in South Dakota. After surveying about 1,700 employers, we have gained some valuable insight into the benefits offered by employers in our state. Below are a few highlights of the survey.

Insurance Highlights

• More than half of the employers in South Dakota offer medical insurance.
• Of those offering medical insurance, nearly six out of 10 of them split the cost for single coverage with the employee; four in 10 pay the entire premium.
• After medical insurance, the most frequently offered insurances are life, dental, short-term disability and long-term disability, in that order.
• Seven out of 10 employers offering life insurance pay the entire cost of the premiums.

Retirement Highlights

• Just less than half of South Dakota's employers offer a retirement plan.
• Of those, most either partially or fully fund the retirement plan that they offer.
• The most popular type of retirement plan offered is the Defined Contribution Plan, such as the 401K.

Paid Leave Highlights

• Paid vacation leave is the most frequently offered benefit in the state; 75 percent of employers offer it.
• On average, employers offer eight paid vacation days after one year of employment, 11 days after two years, and 13 days after five years.
• After paid vacation leave, the most frequently offered paid days off are for holidays, then sick leave.
• One-tenth of employers offer a consolidated leave plan, which combines all types of paid leave into one lump sum.

General Highlights

• In general, the larger the employer the more likely a benefit will be offered.
• The offering of benefits varies greatly by industry as well.
• Full-time employees are much more likely to be offered benefits than part-time employees.
• Just because employers offer a benefit does not always mean their employees will choose to participate in it.

Of course employee benefits typically come with a price tag, which employers need to consider when designing a benefits package. And sometimes all or some of a benefit's costs are passed on to the employees. For example, employers may choose to split the cost of health insurance premiums with their employees. Or some may offer family medical coverage, but do not contribute to the premiums for it. Other employers may offer and entirely fund a retirement plan. Striking a balance can be a challenge for many employers, but the perks that come with a job are a big factor to workers. In fact, the benefit package being offered is often the "deal maker or breaker" for an applicant deciding whether or not to accept a job offer. Likewise, a good benefits package often plays a big role in retaining a current employee who may otherwise consider seeking out other job opportunities.

For more detailed information on employee benefits in South Dakota, please visit our website.

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