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How 50+ Benefits Correlate with Employee Satisfaction

April 4, 2018

Glassdoor Economic Research explored the best industries for benefits and which benefits drive employee satisfaction. In both studies, we restricted the benefits we examined to those we had the most data for in order to rigorously study them: health insurance, vacation/paid time off, 401(k) plans, maternity/paternity leave, employee discounts and free food.

However, Glassdoor’s Benefits Reviews survey collects data on many more types of benefits. Employees can rate and review more than 50 distinct employer-provided benefits, while employers can verify the benefits they offer, providing a well-rounded picture what’s offered at hundreds of thousands of companies. The survey covers a wide variety of workplace benefits and perks, including pet-friendly workplaces, employee adoption assistance, travel concierge services, company cars, mobile phone discounts and more.

To dig deeper, we wanted to understand which of these 50+ perks and benefits matter most to employees.

One simple way to do so is to show the statistical correlation between individual benefits ratings (on a scale of 1 to 5) and how employees rate their overall satisfaction with benefits packages (again, on a 1 to 5 scale).

The table below shows the full list of correlations between 54 benefits tracked by Glassdoor and overall employee satisfaction with benefits packages. The correlations range between zero and one. A correlation near one means the benefit is a good predictor of employee satisfaction with overall benefits packages, while a correlation near zero means the benefit has little impact on employee satisfaction. In other words, which benefits are more important to employees and which are less important?

GD_54_BenefitsRanking

Overall, the above results echo the findings of our earlier study: The core benefits that matter most to workers are health insurance, vacation and paid time off, and retirement plans. These core benefits are most highly correlated with employee satisfaction with benefits packages.

At the bottom of the list, we see less common benefits like fertility assistance, employer-provided child care, and travel concierge services. These benefits have almost no correlation at all with employee satisfaction. While they may be quite valuable to some employees, the data suggest most workers place a low value on these benefits.

Interestingly, many headline-catching benefits such as pet-friendly workplaces, reduced and flexible hours, and gym memberships rank near the bottom of this list in terms of correlation with employee satisfaction. Even the much-discussed benefit of free lunch and snacks ranked 16th out of 54 benefits, well behind more prosaic and traditional benefits like retirement plans.

Although the above correlations are interesting, some caution is warranted in interpreting these findings. These are just simple correlations between benefit ratings, and don’t statistically control for factors like company size or industry as in our previous, more rigorous analysis of Glassdoor benefits ratings.

Despite these limitations, the lesson of the above table is clear. While less common benefits tend to dominate media coverage, employers should not neglect core benefits such as health insurance and paid time off. The data clearly show these benefits—while less exciting than many of today’s flashy workplace perks—are still the main drivers of employee satisfaction.

For employers looking to win top talent, providing a well-rounded total compensation package that includes core benefits, fair pay and desirable perks will help them compete in a challenging hiring landscape.

Filed Under: Benefit News, Flexible Spending Accounts, Health Savings Accounts

FSA Basics

April 3, 2018

Flexible Spending Accounts (FSAs), governed by Internal Revenue Code (IRC) Section 125, allow you to have pre-tax payroll deductions for certain medical and dependent care expenses. Section 125 also permits your insurance premiums to be taken on a pre-tax basis. This provides up to 40% tax savings to you.

Here are some FSA basics as defined in IRC Section 125.

  • Eligible medical and dependent care expenses are defined by IRC Section 125.
  • FSA elections can only be made during designated open enrollment periods or when you meet the eligibility requirements set by your employer.
  • Elections cannot be changed during a plan year unless the participant has a “qualifying event” as allowed by the IRS.
  • Refer to your Plan Highlights regarding unused FSA funds. Any forfeited funds are returned to your employer, but the IRS has imposed strict regulations on the use of these funds (they cannot be refunded to the employees who forfeited them).

Medical FSA

A Medical FSA allows you to set aside funds on a tax-free basis to pay for eligible medical services provided to you, your spouse and your dependents. Some eligible expenses may include:

  • Co-payments, co-insurance and deductible expenses
  • Dental care (e.g. exams, fillings, crowns)
  • Vision care, eyeglasses, contact lenses
  • Chiropractic care
  • Prescription drugs and certain over-the-counter medical items

A more extensive list of eligible expenses can be obtained from our office.

What are the limits for a Medical FSA? The maximum limit that an employee can contribute to a Medical FSA on a tax-free basis is set by the IRS. For 2018 plan years, elections cannot exceed $2,650. Your employer may establish a lower plan limit. Please review your plan highlights for your specific limit.

When are funds available? On the first day of the coverage period, you will have access to your full annual Medical FSA election.

Can I change my election? Generally, you are not able to change your FSA election once a plan year has started. There are certain life status changes that may permit changes, such as: marriage, divorce, birth of child.

Dependent Care FSA

A Dependent Care FSA allows an employee to set aside funds from payroll to pay for certain dependent care expenses. These expenses must be for a dependent child under the age of 13 or a spouse or other dependent adult who is incapable of self-care.

What are the limits for a Dependent Care FSA? The federal government sets the amount that can be contributed per calendar year to a Dependent Care FSA. The current amount is limited to the smallest of the following amounts:

  • $5,000 if single or if married and filing jointly.
  • $2,500 if married and filing separately.
  • The participant’s earned income.
  • The earned income of the participant’s spouse.

What expenses are eligible? In order to qualify, the care must be necessary to enable you and, if married, your spouse to work, look for work or attend school full-time. Some eligible expenses include:

  • Child care
  • Nursery school
  • Before- and after-school care
  • In-home dependent care
  • Adult care

Filed Under: Flexible Spending Accounts, Taxes

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