Why Employers Are Offering More Generous Benefit Packages

Employers are offering more generous benefit packages, primarily driven by improvements in health care coverage.

Of the 402 human resource departments that responded to a survey from the Society of Human Resource Management, 35% said they were improving their benefits packages and 58% said they were keep them the same in 2015. Last year, only 28% of respondents said they were improving their packages.

Over the past five years, employers have especially improved mental health coverage, with 91% saying they would improve coverage in 2015, up from 82% in 2011. Over the same period, contraception coverage also improved, with 83% of employers making improvements this year, up from 69%, and the percentage of employers boosting critical illness insurance rising from 22% to 34%. Health savings accounts, which are tax-deductible accounts for medical expenses, have also seen an uptick, with usage rising 8% in the past five years.

As health care expenses rise for the majority of companies, many are offering preventative health benefits in order to tamp down spending in the long run, the study found. Those include health and lifestyle coaching, wellness programs, and smoking cessation programs, among others. Meanwhile, nap rooms, which were considered a preventative measure on the study, logged a 4% decrease in the past five years.

In terms of leave benefits, paid maternity and parental leave has increased in prevalence in the past five years. Flexibility is on the rise too: 56% of employers this year reported allowing workers to telecommute on an ad-hoc basis, compared to 42% in 2011.

According to the study, employers sink much of employee compensation in benefits that workers don’t notice in their paychecks: almost a third of private industry employee compensation came in the form of benefits in 2014. “In an environment with limited compensation growth in most sectors of the U.S. economy, a competitive benefits package can make the difference in attracting top talent to an organization,” the study said.