Employer-sponsored benefit packages have changed drastically over the past century. Here’s what you should know.
Employer-sponsored benefits as we know them did not exist until the early 1900s. Benefits packages as they exist now were created to strengthen the bond between employee and employer.
What Benefits are Required?
Very few benefits are actually required by law and include employer contributions to Social Security, Medicare, and worker’s compensation. Traditional superfluous benefits typically include paid time off, holiday pay, health and life insurance, and retirement benefits and can expand to encompass everything from stock options and tuition reimbursements.
Prior to the early 1900s, almost all benefits were paid for exclusively by the employee, but with the growing workforce came a growing need for employee satisfaction, prompting the launch of many employer-ran programs to provide a better life for their employees.
A Benefits Timeline
The early 1900s was a time of true positive change for employees in the workforce. In 1899, both Aetna Life Insurance Co. and Travelers Insurance Co. began offering employees health insurance plans with disability coverage. Years later, in 1910, Worker’s compensation was introduced. In 1935, Congress passed the Social Securities Act. Employer-paid benefits continued to rise until the mid-1900s, where there was a plateau, followed by a gradual slowing of offerings by the late 1990s.
In the late 1900s, employers cut back on benefits and programs and shifted the responsibility for the offered program’s premiums back to the employee. With the high cost of labor, employers no longer saw the benefit of paying for benefit programs on behalf of their employees.
That all changed in the 21st century, however. Again, benefits are the main focus of corporations looking for the top talent in their respective industries. Employers are evaluating their compensation programs and benefit programs in order to attract and keep the best talent. It is now important for employers to have a deep understanding of their workforce in order to offer the most valuable compensation and benefits packages to their teams.
What Benefits are Most Important to Employees?
While many employers traditionally believed healthcare to be the most important benefit, companies now are realizing that additional benefits can attract new and diverse pools of talent. For instance, some companies may offer early outs in the summer months, or extended vacation plans to incentivize a healthy work/life balance. Perhaps most exciting, is the rise of retraining, cross-training, and upskilling, allowing employees to grow within their respective fields.
As evidenced, benefits have changed drastically over time. These changes have coincided with the economic and social movements of the time. Now, the challenge for employees is to keep up with the change and maintain a benefit structure to keep their employees satisfied.
A PEO Can Assist in Creating Appropriate Benefit Packages
From payroll to insurance, EPS offers a comprehensive platform that can significantly expand the benefits options you can make available to your employees.
EPS offers unbeatable support backed by an unparalleled team of experienced specialists to assist with your PEO needs. If you are unsatisfied with your current provider or are looking for a PEO for the first time, give us a call today.