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Corporate benefits: Why benefits are so important for employees

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Corporate Benefits: Why Employee Benefits Are So Important

Corporate benefits are more important than ever. While salary remains a central factor in job selection, benefits are almost equally important to many employees. This article provides everything you need to know about corporate benefits.

Key Information About Corporate Benefits at a Glance

  • Corporate benefits are non-monetary advantages offered by employers to their employees.
  • Such employee offerings increase job satisfaction, making employees more likely to stay with the company.
  • Additionally, corporate benefits play a crucial role for applicants in job selection as they express appreciation and are becoming an increasingly important pillar alongside salary.
  • Key employee benefits include flexible working hours, health programs, training opportunities, and mobility subsidies.
  • The advantages, such as increased employee satisfaction and enhanced employer brand attractiveness, outweigh the disadvantages, such as costs and administrative effort.
  • In Germany, certain benefits are tax- and social security-free up to a threshold of 50 euros per month per employee.

Definition and Importance: What Are Corporate Benefits?

Corporate benefits, also known as employee benefits or additional perks, are non-monetary advantages offered by companies to their employees in addition to base salary.

There is no fixed rule on what constitutes a corporate benefit. Employee benefits range from health and retirement plans to flexible working hours and perks like company cars, gym memberships, or meal vouchers.

The core idea behind corporate benefits is to promote job satisfaction and the well-being of employees, which generally leads to a stronger commitment to the company.

In today's work environment, such benefits are no longer just a nice extra but a key factor for employer attractiveness and a tool in the competition for top talent.

Why Are Benefits So Important for Employees?

Employee benefits play a decisive role for many, especially younger employees, in choosing their job and have a direct impact on job satisfaction and motivation.

Here are some reasons why benefits are so important for employees:

  • Appreciation and Recognition: Corporate benefits signal to employees that their well-being and satisfaction matter to the company, expressing appreciation and recognition.
  • Work-Life Balance: Many benefits, such as flexible working hours, remote work options, or bringing pets to the office, contribute to a better work-life balance, which is increasingly relevant to employees.
  • Health and Well-being: Health benefits, like gym memberships or health checks, directly contribute to the physical and mental well-being of the workforce. This not only makes benefits attractive but also results in healthier employees with fewer sick days.
  • Increased Employee Retention: By investing in employees' well-being, companies strengthen loyalty and retention, as satisfied employees are less likely to leave.
  • Employer Attractiveness: In a competitive job market, attractive benefits can be the deciding factor in attracting and retaining high-qualified talents.

Studies highlight the importance of corporate benefits. A Mercer survey found that one in seven people has changed employers due to inadequate benefit offerings.

List of Key Employee Benefits: What Corporate Benefits Are There?

Employee benefits are diverse and reflect the varying needs and desires of the workforce. Not every industry or company has the same popular corporate benefits.

Generally, companies successful in this area offer a wide range of benefits to make the work environment more attractive and increase job satisfaction.

Here are some of the most important corporate benefits:

  • Flexible Working Hours: Allows employees to design their working hours individually, promoting a better work-life balance.
  • Flexible Time and Workplace Models: Includes job sharing, remote work options, and the permission to bring pets to the workplace.
  • Training Opportunities: Investment in professional and personal development through courses, seminars, or e-learning offers.
  • Company Pension Plans: Monetary additional benefits that pay off later, a significant benefit for many employees.
  • Health Programs: Yoga classes, gym memberships, and other measures to promote physical and mental health.
  • Mobility Offers: Popular among employees, including bike leasing, car leasing, or public transport tickets. Bike leasing, in particular, is becoming increasingly popular in cities.
  • Complete Kitchen at the Workplace: Allows employees to cook fresh and eat together, fostering team culture.
  • Bonuses and Profit Sharing: Financial incentives directly tied to the company's success, allowing employees to share in the company's success.
  • Childcare: Subsidies or company childcare facilities help balance family and work for many employees.
  • Catering Offers: Meal subsidies, fruit baskets, lunch vouchers, and free drinks are often considered outdated but enhance the work environment.
  • Modern Work Devices: Ensure employees work with the latest technology, increasing productivity and satisfaction.
  • Sports and Leisure Offers: Promote team spirit and health by supporting joint activities outside working hours financially and infrastructurally.
  • Sabbaticals and Volunteer Days: Allow employees to develop personally and engage in social activities, particularly important for younger generations.

What Are the Advantages of Corporate Benefits?

Corporate benefits, such as mobility offers, remote work, drink flat rates, or modern laptops, bring numerous advantages.


  • Increase employee satisfaction and engagement.
  • Improve employee retention and reduce turnover.
  • Enhance the company's attractiveness to applicants.
  • Support the health and well-being of the workforce with appropriate offers.
  • Help promote a balanced work-life balance.
  • Contribute to increased company performance.
  • Offer partially tax-optimized opportunities for both employers and employees.

What Are the Disadvantages of Employee Benefits?

As with any context, not everything about corporate benefits is perfect. The disadvantages are mostly challenges for companies themselves.

Corporate benefits...

  • Incur costs and are an additional investment for smaller companies.
  • Require special administration, increasing administrative effort.
  • Can lead to discussions among employees about inequality if poorly communicated.
  • Do not play a role in pension entitlements.

Corporate Benefits: What Do They Mean for Employers?

The disadvantages show that offering employee benefits involves additional effort for employers, but it is worthwhile. Corporate benefits are more than just a tool for increasing employee satisfaction; they are a strategic instrument in the competition for talented professionals and in promoting a positive corporate culture.

It is important to note that introducing and managing employee benefits requires careful planning and evaluation of the associated costs and administrative effort. Employers need to consider the financial implications and ROI (return on investment) of the offered additional benefits.

The "Benefits Trends Survey" by Willis Towers Watson shows that more than half of German companies surveyed (58 percent) are dissatisfied with their own benefit strategy due to its ineffectiveness. On the other hand, the overwhelming majority (85 percent) believe that such a strategy is crucial for attracting and retaining professionals.

What Do Corporate Benefits Cost Employers?

The question of cost is one many companies ask regarding offering corporate benefits. These costs cannot be generalized as they vary depending on the type and extent of the benefits provided.

While some benefits, like flexible working hours, are relatively inexpensive to implement, others, like company pension plans or comprehensive health services, require significant investments.

Are Employee Benefits Tax-Free?

The tax treatment of employee benefits depends on the country in question.

In Germany, for example, employee benefits are subject to specific tax regulations that employers must consider. Many of the offered additional benefits can be considered as benefits in kind, promising tax advantages. Up to a threshold of 50 euros per month per employee, such benefits in kind are tax- and social security-free.

This opens the door for many companies to offer their employees various advantages, such as vouchers, discounts, or corporate fitness programs, without generating additional tax burdens. However, if the value of the benefits exceeds this limit, they must be taxed as non-cash benefits.

Apart from this regulation, there are many other rules to consider regarding the limits of tax-free benefits, differing by type of additional benefit.

Organizing Benefits

Due to the complexity of the tax topic related to corporate benefits, many companies opt for software solutions for support.

Such tools list all benefits, make them accessible to employees, and sometimes handle the correct tax accounting in the background. Often, there is also a link to benefit partners whose offers can be booked by employers through the software and made available to their employees.

Practical Examples of Employee Benefits and Offers

Many companies are evolving significantly in terms of corporate benefits. Google, for example, offers a comprehensive package of health benefits, financial incentives, and flexible work models to strengthen its attractive employer brand. Starbucks places great emphasis on employee well-being and development, offering benefits like full tuition reimbursement and comprehensive health services.

PricewaterhouseCoopers (PwC) also provides a good example of a well-thought-out benefit strategy. The consulting firm summarizes on its own page the corporate benefits available, ranging from workation and training options to job bikes, take-away food, and a membership in the Urban Sports Club, as well as company pension plans.

It does not always have to be large offers or organizations leading by example. Many comparatively smaller companies also offer meaningful employee benefits. Vaude, for example, runs its own childcare center in southern German Tettnang, and Teva has opened a company kindergarten in Ulm.

Conclusion: The Right Corporate Benefits Make Employers Attractive

Today, hardly any company popular among employees and applicants does not offer extensive benefits. Such an offering has become too important.

The right corporate benefits actively contribute to positioning a company as an attractive employer. They not only increase the satisfaction and motivation of the workforce but also promote commitment to the organization.

For employers, this means that by addressing the needs and desires of their employees and providing a diverse but targeted range of additional services and benefits, they position themselves well in the competition for trainees, young professionals, and skilled workers – and the existing workforce also benefits.

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