What is an example of a fringe benefit?

Com­pet­i­tive wages are no longer enough to sat­is­fy and sup­port val­ued employ­ees. Today, a vari­ety of ben­e­fits plays an essen­tial role in attract­ing and retain­ing peo­ple who are a good fit for the job and for each com­pa­ny culture. 

That’s why an increas­ing num­ber of employ­ers are uti­liz­ing lifestyle or fringe ben­e­fit plans to entice high-qual­i­ty appli­cants, help their com­pa­ny stand out as a great place to work and improve their workforce’s qual­i­ty of life.

In fact, stud­ies show that 80% of employ­ees would select more ben­e­fits above a pay increase.

What Are Fringe Benefits?

Fringe ben­e­fits are unique perks that an employ­ee receives out­side of their wages or salary. They include any ben­e­fits that aren’t direct­ly tied to the person’s wages. Fringe ben­e­fits are sim­i­lar to lifestyle ben­e­fits in that they go beyond what’s expect­ed from tra­di­tion­al ben­e­fits. The dif­fer­ence is that lifestyle ben­e­fits specif­i­cal­ly aim at meet­ing every­day needs — child care, food deliv­ery, men­tal health.

This umbrel­la term of fringe ben­e­fits is gen­er­al­ly bro­ken into two sep­a­rate categories:

• Nec­es­sary Benefits

• Ancil­lary Benefits

Nec­es­sary ben­e­fits refer to ben­e­fits that peo­ple have to pur­chase on their own if an employ­er doesn’t pro­vide access to them. Take health insur­ance as an example. 

Employ­ees need to stay healthy and hav­ing afford­able health insur­ance is crit­i­cal. Still, accord­ing to sta­tis­tics pro­vid­ed by Kaiser Fam­i­ly Foun­da­tion, less than half [47.4%] of all U.S. firms offered paid health insur­ance to their employ­ees in 2020. That leaves many employ­ees seek­ing health insur­ance from oth­er sources; pay­ing pre­mi­ums and co-pays out of their own pockets. 

For many employ­ees, the nec­es­sary fringe ben­e­fits have sim­ply become expect­ed table stakes, lead­ing com­pa­nies to seek addi­tion­al meth­ods of attract­ing and retain­ing top talent.

While most ancil­lary ben­e­fits are not required by law in the same way many nec­es­sary ben­e­fits are, they can improve an employee’s emo­tion­al, per­son­al or finan­cial well-being in some sup­ple­men­tal way. Con­sid­er the wide range of​“extras” that an employ­er can offer, from cor­po­rate well­ness pro­grams to pro­fes­sion­al devel­op­ment. These are perks that help attract and retain a bet­ter work­force.

Ancil­lary fringe ben­e­fits have become the dif­fer­­ence-mak­ers in the mod­ern employ­ment landscape.

Types of Fringe Benefits

First, it’s impor­tant to note the U.S. gov­ern­ment requires that com­pa­nies pro­vide some basic ben­e­fits for their employ­ees. These include Medicare, Social Secu­ri­ty, State and Fed­er­al Unem­ploy­ment Insur­ance, and Worker’s Com­pen­sa­tion. Com­pa­nies with fifty or more employ­ees must also pro­vide health insur­ance as well as fam­i­ly and med­ical leave [12 weeks of unpaid, job-pro­tect­ed leave] to eli­gi­ble employees.

In addi­tion, an increas­ing num­ber of employ­ees expect at least some of the fol­low­ing stan­dard­ized employ­er-spon­sored fringe benefits.

Com­mon types of tra­di­tion­al fringe ben­e­fits include:

• Health Insur­ance
• Vaca­tion Days
• Sick Days
• Life Insur­ance
• Vision & Den­tal Insurance
• Dis­abil­i­ty Insurance
• Stock Options
• HSA and FSA
• Flex­i­ble Scheduling

Many peo­ple are look­ing for more than just tra­di­tion­al fringe ben­e­fits these days. If com­pa­nies want the best poten­tial can­di­dates, they have to think out­side the box with per­son­al­ized ben­e­fit offer­ings. This is why unique fringe ben­e­fits and lifestyle ben­e­fits are grow­ing in pop­u­lar­i­ty and used by the most com­pet­i­tive employers.

Unique Fringe Benefit Examples

Employee Bonuses

Bonus­es involve any mon­e­tary com­pen­sa­tion out­side of reg­u­lar pay. Accord­ing to SHRM, semi-reg­u­lar or per­for­mance-based bonus­es can improve an employee’s engage­ment and job sat­is­fac­tion. Bonus­es can include a hol­i­day bonus, prof­it shar­ing or more mer­it-based bonus­es for hit­ting spe­cif­ic per­for­mance metrics.

Event Tickets

Appeal to employ­ees’ per­son­al inter­ests by giv­ing them tick­ets to bas­ket­ball games, foot­ball games, con­certs, plays and more. This helps them feel under­stood and appre­ci­at­ed. It’s also an oppor­tu­ni­ty to gath­er out­side of work to get to know the employ­ees better.

Transportation and Commuter Benefits

Gas cards, tran­sit pass­es or month­ly com­mut­ing allowances are all great ways to ease the com­mut­ing process and give employ­ees one less thing to wor­ry about. This is an excel­lent fringe ben­e­fit for employ­ers who are locat­ed in con­gest­ed urban areas.

Company Vehicle

A com­pa­ny vehi­cle helps employ­ees upgrade their means of every­day trans­porta­tion while keep­ing them com­mit­ted for the long term. Hav­ing access to the ben­e­fit of a vehi­cle reduces missed work due to vehi­cle break­downs; plus, there is a cer­tain pride that goes with dri­ving a fleet vehicle.

Subscription Services

There’s no short­age of con­sumer sub­scrip­tion ser­vices these days. cur­rent­ly have at least one video stream­ing ser­vice. Some oth­er sub­scrip­tion options to con­sid­er might be a month­ly cof­fee or busi­ness mag­a­zine sub­scrip­tion. Pro­vid­ing com­pli­men­ta­ry sub­scrip­tions can be a unique way to appeal to people’s inter­ests and keep them look­ing for­ward to some­thing each month.

Gym Reimbursement & Other Fitness Opportunities

There’s an abun­dance of fringe ben­e­fits to con­sid­er under the recre­ation and fit­ness umbrel­la. Many com­pa­nies find ways to offer recre­ation and fit­ness perks for their peo­ple, from pay­ing gym mem­ber­ships to com­pli­men­ta­ry yoga or dance classes.

Educational Reimbursements

This type of fringe ben­e­fit includes every­thing from on-the-job train­ing to tuition reim­burse­ment. Some com­pa­nies offer com­pli­men­ta­ry cours­es, while oth­ers pay their peo­ple to earn col­lege degrees. Oth­ers send employ­ees to indus­try con­fer­ences so they can grow their careers. In any case, an edu­ca­tion­al reim­burse­ment is a win-win for employ­ees and employers.

Childcare Reimbursement

Some larg­er cor­po­ra­tions offer onsite child­care or com­plete reim­burse­ment for pri­vate day­care ser­vices, while oth­ers will pay a por­tion of child­care costs. This wel­come ben­e­fit can help work­ing par­ents afford the high costs of rais­ing a family.

Maternity/​Paternity Leave

This ben­e­fit refers to paid time off for par­ents fol­low­ing the birth [or adop­tion] of their chil­dren. For expec­tant par­ents or peo­ple hop­ing to have chil­dren some­day, this oppor­tu­ni­ty can be a huge draw, espe­cial­ly since only 40% of U.S. employ­ers offer mater­ni­ty leave and only 29% offer pater­ni­ty leave.

8 Reasons to Provide Lifestyle Benefits for Your Employees

1. Improve Employee Recruitment

Pro­vid­ing unique fringe ben­e­fits can sup­port recruit­ment efforts and help retain a strong work­force. 70% of employ­ees report that ben­e­fits and perks play a sig­nif­i­cant role when con­sid­er­ing a job offer. More­over, 68% of peo­ple say that ​“work perks” [ancil­lary ben­e­fits] are just as cru­cial as tra­di­tion­al ben­e­fits like healthcare. 

2. Improve Employee Happiness

Hap­py peo­ple look for­ward to com­ing to work and are, at min­i­mum, 12% more pro­duc­tive than unhap­py ones. More per­son­al­ized ben­e­fits are a great way to make employ­ees happier. 

3. Show Employee Appreciation

Offer­ing lifestyle ben­e­fits is a ter­rif­ic way to reward and sup­port your peo­ple, and make employ­ees feel val­ued. 78% of employ­ees say they are more pro­duc­tive after receiv­ing a reward. It also helps your peo­ple at home. 70% of work­ers not­ed that when they were hap­py at work, they were hap­pi­er at home, as well. Ben­e­fits help employ­ees in and out of the office, sup­port­ing greater work-life bal­ance — and this is good for fam­i­lies too. 

4. Improved Company Culture

agree that com­pa­ny cul­ture is impor­tant, and 57% of employ­ees say they’ll take a job with anoth­er com­pa­ny if their cul­ture is better. 

Unique and per­son­al­ized ben­e­fits can help improve employ­ee hap­pi­ness, which has a direct impact on com­pa­ny cul­ture. Fringe ben­e­fits can include lifestyle rewards, like com­pre­hen­sive well­ness ben­e­fits, fit­ness class­es or men­tal health assis­tance, all of which show your peo­ple that you care about their wellness. 

5. Improve Employee Health and Well-Being

Offer­ing com­pre­hen­sive well­ness ben­e­fits is a way to show your team that you sup­port employ­ee well­be­ing and care about them as individuals. 

Invest­ing in employ­ee health and well-being ben­e­fits — for instance, offer­ing gym mem­ber­ships or online ther­a­py access — also has the poten­tial to reduce the num­ber of sick days they take in the future.

6. Offer Stronger Performance-Based Incentives

Employ­ees have come to expect that their employ­ers will rec­og­nize their efforts and pro­vide them with per­for­mance-based com­pen­sa­tion. Lifestyle ben­e­fits tend to serve as fan­tas­tic encour­age­ment for per­for­mance-based com­pe­ti­tions or as part of a rewards and recog­ni­tion pro­gram. As opposed to salary-based com­pe­ti­tions, which can cause anx­i­ety, ben­e­fit-moti­vat­ed com­pe­ti­tions gen­er­ate pro­duc­tiv­i­ty and enthu­si­asm. Learn more about the prob­lems with incen­tive pro­grams and what to try instead

7. Improve Employee Retention

Employ­ee turnover can cost twice as much as the employee’s year­ly salary. Yet, 49% of employ­ees will look for new jobs in the next twelve months because they’re dis­sat­is­fied with their cur­rent ben­e­fit offer­ings. By offer­ing a pro­gram such as Fringe ben­e­fits, employ­ees can choose the ben­e­fits that make the most sig­nif­i­cant impact in their lives, increas­ing their sat­is­fac­tion and loy­al­ty. Learn 14 oth­er tac­tics to decrease employ­ee turnover.

8. Increase Employee Referrals

Peo­ple are more like­ly to refer their friends and acquain­tances to work at a com­pa­ny if they’re sat­is­fied with their employ­er. This is impor­tant because 30% of all new hires come from employ­ee refer­rals. Fringe ben­e­fits can be an inte­gral part of an employ­ee-refer­ral pro­gram as it incen­tivizes recruitment. 

It’s also a time-saver. Exter­nal hires require four times the appli­ca­tions and two times the inter­views that employ­ee refer­ral hires do. It’s no sur­prise that focus­ing on recruit­ment is gain­ing pop­u­lar­i­ty and extend­ing ben­e­fits to employ­ees to help bring in qual­i­ty hires is a win for everyone.

Support Your Team with Better Benefits: How We Can Help

It’s no sur­prise that most peo­ple favor cus­tom and per­son­al­ized ben­e­fits options. 

Unlike the one-size-fits-all approach some orga­ni­za­tions attempt with their group ben­e­fits, cus­tomized ben­e­fits options allow employ­ees to pick what works for them. With a points-based sys­tem, they can choose unique ben­e­fits and perks that enhance their lives and ignore those that would have no impact on them. 

Cus­tomized ben­e­fits sys­tems allow com­pa­nies to ensure that the mon­ey they spend on fringe ben­e­fits has the desired effect on recruit­ment, hap­pi­ness, reten­tion and performance.

Here at Fringe, we spe­cial­ize in cus­tomiz­able ben­e­fits. Our sin­gle plat­form allows employ­ers to give their peo­ple a form of dig­i­tal cur­ren­cy instead of blan­ket ben­e­fits. Then, employ­ees can spend points to choose the ben­e­fits that best serve their needs.

Fringe is not just for employ­ers. It’s a ter­rif­ic tool for man­agers, too. 

Why Choose Fringe

Our ben­e­fits plat­form frees up time and resources for man­agers. When used as a reward sys­tem, it can help moti­vate employ­ees, boost morale and incen­tivize tasks in a mean­ing­ful way. Lifestyle ben­e­fits can be cus­tomized to each person’s interests. 

The Fringe plat­form gives employ­ees over 100 lifestyle ben­e­fits that direct­ly increase their qual­i­ty of life. From well-being ser­vices to food and trans­porta­tion, peo­ple can use their ben­e­fit points for what­ev­er best suits their lifestyle. 

Learn why top com­pa­nies choose Fringe to attract and retain the best people. 

Every­one wins with our flex­i­ble Fringe ben­e­fits plat­form. By using a point-based sys­tem, com­pa­nies know with cer­tain­ty that the employ­ees are get­ting some­thing they want and need, instead of wast­ing mon­ey on ben­e­fits that are rarely used or appreciated.

Want to learn more about how the Fringe plat­form can rev­o­lu­tion­ize your busi­ness? Reach out to our team to get start­ed today!

What are called fringe benefits?

What is an example of a fringe benefit quizlet?