The American job market changed dramatically throughout 2020, but attracting and retaining top job talent in 2021 still remains competitive across a number of industries. What should employers keep in mind for the coming year?

Here are the top benefits employees will be looking for in 2021.

1. Health Insurance

If there was ever a year that illustrated the importance of having health insurance, 2020 was it. Health insurance benefits are often the first thing employees ask about and often play a factor in whether prospective new employees choose to come work for you or keep looking at their options. As a business owner, you want to make sure you’re offering health insurance that provides good coverage for your employees and maintains compliance with regulations. Offering good coverage also helps protect and support your employees’ health, leading to increased loyalty and productivity.

Understanding the range of options and associated costs can make picking the right plans to meet your employees’ needs a challenge. Determining what percentage of the premium will be covered by the employer also needs to be considered since it will directly affect your budget. Many plans require a minimum employer subsidy, usually 50% of the premium, with the employee paying the rest. For businesses with more than 49 employees, the Affordable Care Act also regulates the maximum premium an employee can pay for health insurance.

2. Retirement

Now more than ever, employees know to ask the right questions about retirement funding. Once considered an exclusive perk of the C-suite, businesses of all sizes are stepping in to offer a competitive range of retirement options, with the most popular being 401Ks and 403Bs. To offer 403B plans, an organization needs to be non-profit.

How your retirement program is structured is up to you, and you have a great deal of flexibility in what you offer. Some businesses offer to match employee contributions, typically anywhere from 50-100% of their employee’s contribution, up to a specific limit. Other companies will offer profit sharing, where employees receive a letter annually, letting them know the contribution amount that has been deposited into their account.

3. Flexible Spending Account and Health Savings Account

Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) provide your employees the ability to put pre-tax dollars into an account to cover health-related expenses throughout the year, including things like co-pays or drug costs.

FSAs usually come with a cap on the amount that can be saved and a use it or lose it clause that requires that the saved amount be claimed during the calendar year, or lose the balance. HSAs never expire and can even be used if you switch health plans. They do require that you are enrolled in a high deductible health plan.

4. Paid Vacation and Sick Time

Paid time off (PTO) is one of the most popular benefits to offer employees, and the majority of companies are offering employees some form of it. Employees at even small businesses will expect to be offered PTO as one of their benefits, with two weeks being the most common amount, accrued over the year. 

Some companies offer a general PTO package with all PTO available for vacation, sick, or personal days. Other companies break it up into individual types with specific buckets for each one. Each of these approaches to PTO has its own benefits depending on how your company works and what makes the most sense for you and your employees.

5. Flexible Schedules

Allowing your employees to work a flexible schedule can be an excellent perk helping foster a better work-life balance and happier, more productive employees. Employees may opt to work longer hours to have an extra day off or opt to break up their workload throughout the day so they can incorporate more breaks to manage other obligations. Consider offering a flexible schedule as a motivational tool, and experiment with letting employees set their own schedule.

6. Paid Holidays

While government employees have a list of recognized federal holidays, there’s no similar requirement for small or private businesses. Employees may expect certain days off, but that varies by industry. Restaurant and airline industries tend to work on the busiest holidays of the year, for example. When deciding which days to give off, employers will have to determine what makes sense for them on a case by case basis.

7. Dental Insurance

Dental insurance often comes packaged with the health insurance package but is seen as its own unique perk. For employees deciding on whether a company is the right fit for them, a robust dental package can be an enticement, especially as health care costs go up. Because dental insurance has lower premiums than health insurance, it’s also one of the most affordable types of insurance to offer your employees, with benefits that help them save money and improve their health. Typically, an employer will pay 80% of the premium for this type of insurance.

8. Life Insurance

In the past, life insurance was typically more of an executive perk. That said, workplace trends point to more companies offering low-cost life insurance to their employees. Many employers provide life insurance in the same amount as their employees’ salaries for no charge to the employee, with the option to add more on with a small cost to the employee. As the job market warms up in 2021, businesses keen on retaining top talent may consider looking into offering life insurance as a company incentive.

9. Medical Leave

Companies with 50 or more employees must offer medical leave through the Family and Medical Leave Act (FMLA). Medical leave can include maternity leave, time off to recover from medical procedures, or time off to care for sick family members. FMLA requires that you keep an employee’s job open for 12 weeks, but it does not require you to pay them for that time away. Many companies offer six weeks of paid leave, with the option to use vacation or sick leave to take additional time.

10. Education Assistance

Many companies offer tuition assistance, where they help employees work towards a degree by paying part or all of their tuition costs. Helping with tuition can incentivize employees and build a strong company culture, while also delivering certain tax benefits. Not every company can afford to offer this perk, but for those who can, it provides another tool to attract and retain talent and increase employee loyalty.

Creating the right benefits package can be a challenge. Luckily there are companies that specialize in helping businesses of all sizes tailor the right package for their needs while keeping in mind the bottom line.