5 Types of Employee Benefits and Why They are Important

Surely, most of you have heard the term “benefit” at some point in your lives. Benefits are a common thing, particularly in the work field, and should be received by workers from the company.

However, many people equate the concepts of employee benefits with salary. In reality, there are minor distinctions between the two of them. Furthermore, benefits come in a variety of shapes and sizes. More information about this topic is explained in the following Clockster article.

What are Employee Benefits?

Benefit is an English word that generally translates to “goodness, benefit, advantage” in Indonesian. Similarly, in the world of work, benefits are extra advantages that employers might offer to their employees.

Benefits, in general, are something that should not be overlooked. Because benefits allow a company to assist the well-being of employees who engage to achieve the company’s objectives.

The Difference between Benefits and Compensation

You may sometimes find another word that sounds similar to benefit, notably compensation. When you hear these two words, how do you feel? Many individuals have the misconception that compensation and benefits seem to be the same thing. However, there are differences between the two of them.

Compensation is defined as an incentive for work performance within the business. Meanwhile, benefits are extra services given by the company under a predefined agreement.

But, according to some sources, employee benefits are a kind of compensation. Employee benefits, on the other hand, are not always cash. The intention of both is the same: to show appreciation for employees.

As a result, it may be inferred that benefits are a type of non-cash compensation.

Employment insurance coverage and other facilities that support the proper functioning of workers’ jobs are examples of employee benefits.

See also: What is Compensation? Definition, Types, and Purpose

Types of Employee Benefits

If benefits are considered part of compensation, what exactly are the different sorts of benefits for employees? To make it easier for you to comprehend, below is a list of the many types of benefits available to employees.


The first type of employee benefit is knowledge or experience. Perhaps you were aware of this benefit while you were an intern at a firm. As an intern, you will gain firsthand experience and knowledge in that certain industry.

Food and Transportation

Some enterprises also give transportation and food as benefits to their staff. Of course, the form varies based on the company’s policies. However, company cars or food catering for staff is a common example of benefit for employees.

Pension Plan

A company usually provides pension benefits to employees by offering them several kinds of insurance. For example, most companies in Indonesia use BPJS for hospitalization coverage.

Health Insurance

Health concerns, which are still connected to insurance, are one of the sorts of benefits offered by the company. Employment BPJS is mandatory to protect employee wellness.

Work Safety

This type of benefit is slightly different from the previous categories of benefits. This benefit is specialized to companies in high-risk industries. Some industries, such as oil and gas, construction, and manufacturing, require special attention when it comes to work safety coverage.

Employee benefits health insurance.jpg

Why is Employee Benefit Important?

Based on the previous information, it can be stated that benefit is a crucial element of a company that must be prioritized. Its implementation and completion will be extremely beneficial to both parties.

Benefit for the Company

Employees, who are also the company’s most valuable resource, must be safeguarded as much as possible. The company’s long-term viability will be ensured by offering the appropriate benefits. The staff that elevates the company forward will continue playing a proactive and continuous role in its growth.

This will also have an impact on the company’s name and reputation. When a firm’s leader is shown to care about their employees, the public’s perception of the company improves as well. As a result, consumers will have more faith in your company.

Benefit for the Employee

This system definitely is beneficial for the employees. The fact that it demonstrates the company’s compassion for its employees. With several types of benefits above, an employee’s well-being will be ensured. All dangers that may arise throughout the course of your job can be managed effectively.

In conclusion, as an employee, it is important to understand the basic benefits that are provided by your employer. So the time you spend in a company can bring maximum impact to yourself.

Benefits are a vital kind of appreciation for businesses to be planned and there is nothing wrong with caring about your workers’ well-being after they have worked very hard to build your company.

Clockster provides a convenient and practical platform for you to meet your human resource management needs. Visit Clockster to learn about the features that will best fit your company’s needs! I hope you find it helpful!

See also: What is Overtime Pay? Definition and How to Calculate It

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