Building a Competitive Benefits Package in 2022: What Employees Actually Want

Employee benefits expectations have shifted dramatically. What was considered generous in 2019 may now be table stakes. To compete for talent and retain your workforce, you need to understand which benefits actually influence employee decisions and prioritize accordingly.

The Benefits Employees Value Most

While every workforce is different, consistent patterns emerge across industries:

Tier 1: Non-negotiable expectations

These benefits are so widely expected that lacking them puts you at a significant competitive disadvantage:

• Health insurance: Still the most valued benefit across all demographics. Comprehensive coverage with reasonable employee premium contributions is baseline.
• Paid time off: Minimum expectations have risen. Three or more weeks of PTO for new employees is increasingly standard. Separate sick leave in states that require it.
• Retirement plan with employer match: A 401(k) or equivalent with at least a 3-4% employer match is expected by most professional workers.
• Remote or hybrid work options: For roles that can be performed remotely, offering no flexibility is a dealbreaker for a large portion of candidates.

Tier 2: Strong differentiators

These benefits meaningfully influence candidate and employee decisions:

• Paid parental leave: Beyond any state-mandated requirements, paid parental leave for both parents is a powerful differentiator, especially for employees in their 20s and 30s.
• Mental health support: Enhanced mental health coverage, digital therapy platforms, and expanded EAP services signal that you take employee wellbeing seriously.
• Professional development funding: Tuition reimbursement, conference budgets, and certification support appeal to growth-oriented employees.
• Flexible scheduling: Beyond remote work, the ability to adjust start/end times, compress workweeks, or adjust hours around personal needs.
• Student loan assistance: A growing number of employers offer direct student loan repayment contributions, typically $50-$200 per month.

Tier 3: Emerging and appealing

These benefits generate positive attention and can tip decisions for candidates choosing between comparable offers:

• Pet insurance or pet-friendly policies
• Fertility and family planning benefits (IVF coverage, adoption assistance, surrogacy support)
• Financial wellness programs (financial planning, emergency savings matching, access to earned wages before payday)
• Sabbatical programs for long-tenured employees
• Volunteer time off (paid days for community service)
• Home office stipends for remote workers ($500-$1,500 annually)

Tailoring Benefits to Your Workforce

A one-size-fits-all benefits package wastes money on benefits some employees do not value while missing benefits others need:

Understand your demographics

• A workforce dominated by employees in their 20s may value student loan assistance and professional development more than retiree health benefits
• Employees with families prioritize dependent care, parental leave, and schedule flexibility
• Older workers often value health coverage quality, retirement contributions, and wellness programs

Survey your employees

• Ask employees which current benefits they value most and least
• Ask what benefits they wish you offered
• Include candidates in this data collection by asking in interviews what benefits influenced their decision to apply

Consider a flexible benefits approach

• Lifestyle spending accounts (LSAs) give employees a fixed dollar amount to spend on benefits categories they choose (fitness, childcare, pet care, education, home office)
• Flexible benefits plans allow employees to choose from a menu of options within a budget
• These approaches maximize perceived value while controlling costs

Cost Management Strategies

Expanding benefits does not always mean spending dramatically more:

Optimize health plan design

• Consider high-deductible plans paired with generous employer HSA contributions. Total employer cost may be lower while employees build tax-advantaged savings.
• Implement or enhance wellness programs that address chronic conditions driving claims costs
• Review your plan annually with your broker to ensure competitive pricing

Leverage group purchasing power

• Join a Professional Employer Organization (PEO) or benefits consortium to access rates typically available only to larger employers
• Negotiate multi-year agreements with benefits vendors for more favorable pricing
• Bundle services (dental, vision, life, disability) with a single carrier for volume discounts

Choose high-impact, low-cost options

• Flexible scheduling costs nothing
• Volunteer time off costs only the hours used (typically 8-16 per year per employee)
• Employee discount programs through vendors like PerkSpot or Corporate Perks cost $1-$3 per employee per month
• Financial wellness resources through your existing EAP may already be available but underutilized

Calculate the ROI

Frame benefits spending against the cost of turnover:

• If replacing an employee costs $15,000-$30,000 (conservative estimate for mid-level roles), a $2,000 annual investment in benefits that prevents one departure pays for itself many times over
• Benefits that reduce absenteeism, improve productivity, or decrease health claims generate measurable returns

Communication Matters

The best benefits package is worthless if employees do not know about it or understand its value:

• Create a clear, visually appealing benefits guide distributed during onboarding and at annual enrollment
• Highlight benefits prominently in job postings and during recruiting
• Provide annual total compensation statements showing the employer's full investment in each employee
• Host education sessions about underutilized benefits (many employees do not understand HSAs, EAPs, or professional development programs)
• Use multiple communication channels: email, intranet, team meetings, and printed materials

Annual Review Process

Benefits should be evaluated annually:

• Review utilization data: which benefits are used heavily and which are ignored?
• Resurvey employees about satisfaction and preferences
• Benchmark against competitors and industry peers
• Evaluate vendor performance and pricing
• Assess the impact of benefits changes on retention and hiring metrics

The most competitive benefits packages in 2022 and beyond are not necessarily the most expensive. They are the most thoughtful, reflecting genuine understanding of what employees value and delivering it efficiently.