Crowdsourcing Solutions

What are Employee Benefits? Advantages and Disadvantages


The term employee benefits inculcate the different kinds of indirect recompense provided to the employees apart from their normal salary.

Employee benefits include benefits from various sources i.e. medical insurance, life insurance, retirement benefits, fringe benefits, paid time off, social security and other specialized benefits.

Most often the employees working under the specific constraints and meeting deadlines before or whose work is being performed with full focus or dedication are the eligible nominee for getting the perks of employee benefit the most.

But in some companies, it is kept mandatory to provide employee benefits as it helps them to grow.

Employee Benefits Advantages Disadvantages

Types of Employee Benefits:

Not all MNC’s or bigger organizations pay their employees a heavy paycheck. But still, there are many employees who still want to join such companies. Moreover, you can also find employees who are working there unhappy with their pays.

Now if you are confused thinking of how is it possible, then you might have never heard about the extra benefits and perks their organizations offer them, apart from their salaries.

Employee benefits and perks are the non-salary compensation that the companies pay to their employees. It need not be in the form of cash or hard money, it can be any like medical insurance, extra work time pay paid holidays etc. Also, every company’s employee benefits packages differ from the other.

Mandated Employee Benefits:

Here are a few employee benefits that employers need to offer as per the federal or state laws.

  1. COBRA (Consolidated Omnibus Budget Reconciliation Act)
  2. Workers Compensation
  3. Employee Assistance Program (EAP)
  4. Minimum Wage
  5. Family and Medical Leave Act
  6. Health Reimbursement Account (HRA)
  7. Unemployment Benefits
  8. Disability
  9. Overtime

Few More Company-Provided Employee Benefits:

  1. Paid Holidays
  2. Hazard Pay
  3. Flexible Spending Account (FSA)
  4. Health Savings Account (HSA)
  5. Pay Raise
  6. Maternity, Paternity, and Adoption Leave
  7. Vacation Leave
  8. Work Breaks and Meal Breaks
  9. Severance Pay

Common Employee Benefits:

Employee benefits are very valuable and also useful. Some of the top employee benefits are,

  • Medical Insurance
  • Disability Insurance
  • Life Insurance
  • Accident Insurance
  • Accidental Death & Dismemberment Insurance
  • Pet Insurance
  • Retirement Benefits
  • Domestic Partner Benefits
  • Fringe Benefits
  • Paid Time Off
Advantages of Employee Benefits Disadvantages of Employee Benefits
Increased entreat Difficult to keep everyone happy
Minimizing the throughput Legalization and authentication curse
Improvised self-esteem Too expensive for the employees to fit into
Dedicated Workforce Management of budget becomes difficult
Health is the wealth Difficulty in switching
Regularity in health checkups Difficult to maintain
A step for betterment
Increased Productivity
Upbringing employees growth
Flexible Working hours
WordPress Tables Plugin

Advantages of Employee Benefits:

Some of the advantages of employee benefits are enlisted below:

1. Increased entreat:

Employee benefit should be given so as it will help the dedicated and hard-working employees the growth and satisfaction of being in an organization. It often helps to bring along a spirit of ownership by the employees towards their organization.

There have been various surveys across the organization that says that hard-working and dedicated employees are the reason why they aim at providing benefits to the employees. The most important thing an organization will be in need of are the employees who are dedicated towards them and to keep them in that organization for specified stimulated time to the employees.

2. Minimizing the throughput:

Often it seems difficult for a business to maintain its policies if the people working under them are constantly going and coming around. To show that the organization cares about the employee, it is required to offer employee benefits for them. Loyalty works best for the organization. Loyalty helps in bringing the people and the organization closer.

By keeping the benefits to the employees it helps them to stay in the organization for a longer period of time. By minimizing the throughput and keeping the senior and the most dedicated employees stay in the organization it will eventually help the organization to grow better.

3. Improvised self-esteem:

The advantages of offering employee benefits help in boosting up the self-esteem of the employee. Employee benefit helps in defining, completing, understanding the needs of the workforce they are intended to work with. Employees tend to take their job more seriously if any additional offerings are being provided to them in their workplace.

Often the organization shows their concern about their employees by providing them with enough employee benefits that will help the employee and organization relationship and bring loyalty amongst each other.

4. Dedicated Workforce:

The organization expects the employee to work with full dedication and offer their work for the sake of an organization and on the other hand, the organization keeps the employees delighted so that they will serve to them for a long period of time.

Providing adequate benefits for the employee and asking for surveys often from the employee to help them in any possible way to enhance their performance will eventually help both the organization and the employee grow.

5. Health is wealth:

Offering benefits may vary from organization to organization but health benefits are those benefits that enhance the growth of the organization up to a greater limit. Assuming if an organization offers a vivid variety of health plan for the employee under the workforce and offering specific sick leave within the stipulated time period will help the employee to take the leave on the day they are not feeling well and at the same time, their salary will not get affected.

By offering various medical plans for the employees the employees can inculcate and support the upliftment more for both themselves and their family and the organization with which they are engaged.

6. Regularity in health checkups:

Regular health checkups and proper medical steps are taken under the various insurance plans from time to time which will first and foremost help in detecting any disease if it is there and secondly will provide proper medication that will boost the employee’s immune system and help him get prevented by any disease at its initial phase.

This way of providing daily checkup will ensure the organization that the employee will be taking the minimal leaves as they will not be in need of additional sick leaves as their health will be maintained from time to time and actions are being performed over them instantly

7. Social-Security:

This will help them to contribute to the safety and security of themselves and help them to get associated with the organization for a longer period of time. Retirement plans and other life insurance plans also get into account for the employees.

Retirement plans help the employees to properly maintain and get the money as a pension even after they are not working anymore as an interest of the money they have deposited during the time they were working. This amount helps them to live their life happily after retirement.

8. A step for betterment:

The only motive of providing health benefits is to make the employees healthier so that they can work in the organization for a longer period of time with full determination and dedication. It is a good plan to offer medical insurance to the employees and their families.

To keep the productivity of the organization active they need to keep a good and professional attitude. The more an organization cares about the employee, the more the employee gives in return to the organization considering the organization as their own being.

9. Increased Productivity:

By offering employee benefits, the employee gets more reason to care about the company they are serving and being more dedicated towards them as much as possible. A happy employee will help in better productivity for the organization.

If the employees working under an organization seeks attention from the organization when and where required they in return will favor hard work with the full dedication that will eventually help the organization to grow and increase profit, quality and productivity will be the outcome from such dedicated employees.

10. Upbringing employees growth:

Private as well as the government employees both contribute their parts for the upbringing of their respective workplaces. Not only in the worldly affairs but within an organization, schemes are given under which the employee working the most will get additional benefits and for this policy of reward management things are being initiated across the various organization to keep the employee have the spirit of competency.

This competency will drive the individual to perform better than other employees to get the maximum benefit out from their work

11. Flexible Working hours:

Flexibility in the working hour helps the employee to complete their work assigned to them as per their condition. It does not include that the employee will get flexible hour or any retention from the stipulate working hour given to them rather it will provide an ease that if for certain reason an employee is unable to give full time in a particular day, she/he can compensate that by working extra for the next day or so.

Flexibility in the working hours helps the employee to work efficiently without any specific fear from constraints.

12. Tax advancement:

Income tax deduction helps the employee for contributing to the tax with minimal tax deduction. The benefit offered to the employees under this tax advancement helps the employee to reduce the tax as much as possible. If the business is incorporated, all costs for the insurance and the employees are deductible.

This will also help the employee for financial saving. This competency will improvise both the company’s profit as well as the employee’s growth. Offerings a good health benefit will help in creating a stable workplace and will help in creating a position in the world for them.

13. Benefits offering advancements:

It is often visible that the more the organization provides benefits, the more their staff works. Flexibility helps in providing ease for the employee and helping them to work as per their wish but still, they are asked to meet the deadline and not take their work for granted.

Sick leave benefits are still given to the employee so that they stay up in their home and get well soon so that it does not become contagious for the other employees.

Disadvantages of Employee Benefits:

The following are some of the disadvantages of employee benefits provided to the employees.

1. Difficult to keep everyone happy:

As in an organization, the plans chosen are such that are benefited for the majority of the employees but some or few employees will not be satisfied with the current chosen policy and with the amount they have to pay for their portion.

The packages chosen by the organization are often not too delightful and are meant more for their personal benefit. Plans are often changed every year in different organizations and businesses which hinders the growth of the employee in the company as the insurance plans get along on the annual basis gets affected.

2. Legalization and authentication curse:

Often the benefits create concerns regarding legal complaints against both the employees and the organization on breaking certain policies intentionally or unintentionally. On breaking up of the specific policy and not paying the retention carries legal fees that need to be submitted to get out of trouble which at times becomes troublesome.

3. Too expensive for the employees to fit into:

No matter how much amount the health benefits are favouring the company but they still are going to deduce the amount from the employee more than what they actually want to offer.

Smaller businesses are charged more than the other because they do not have many employees within them while big businesses find benefit expensive as they need to pay a portion of every employee’s benefit.

4. Management of budget becomes difficult:

The cost associated with health insurance is rising day by day which in turn are increasing the turnover rate of the company. If the cost increases the company for the compensation forces the employees to give more money to accommodate their plans in the budgets.

If the company cannot afford the increase in insurance, it will force the employee to switch to a new insurance package which will take a great deal of time to find a suitable package and then investing in them from the very initials.

5. Difficulty in switching:

Switching often becomes very difficult to manage and the company loses many employees if proper actions are not being taken. The major disadvantage associated with it is that the more the employees in the organization will be, the more the company needs to pay to the insurance company to manage the account of different employees.

6. Difficult to maintain:

The additional department needs to be established in a company to properly manage the plans in the organization which will turn in hiring additional employees. Some health insurance packages also include help from a lawyer to make sure that the employees are covered and legal fees and other such expenses are added easily.

Lawsuits are again a curse for the organization. Lawsuits are sometimes extremely expensive and take a great amount of time to keep it away from any business. Even if the suit makes it to the court it can be very expensive to pay the legal fees and pay off the fines for its settlement.


The benefit will help the employees to work better and stay with the organization with which they are related for a long period of time. This policy of providing better employee benefits helps in demonstrating solid benefits to the employee so that it helps in proving the organization that they offer enough deed to keep their employees delighted.

It sort of generates stability amongst the organization and builds a relation which states that the company has the power to praise their employees or the fresh talent by offerings. The government also for increasing the economic security of employees is helping to keep this scheme mandatory in different organizations.