Over time, the way humans work has evolved, and so have employee pay and benefits. The concept of employee benefits emerged during the Industrial Revolution in response to harsh working conditions when industrialists began offering housing, medical care, and educational opportunities to attract workers. As labor rights developed, benefits became a formal part of the employer structure. In the late 19th century, German Chancellor Otto von Bismarck introduced a formal health insurance system for workers. This watershed moment influenced organizations and governments worldwide and eventually evolved into the employee benefits we know today.
Today, it is estimated that 90% of U.S. companies with 50 or more employees offer healthcare and/or other benefits to their workers. According to one study, benefits account for roughly 30% of an average worker’s total compensation. However, while employers now provide more benefits than ever, employee usage has not kept pace. More than one-third of employees report that they do not fully understand the benefits offered to them, and nearly half (46%) do not take all their paid time off.1, 2
To make sure you are getting the most out of your employee benefits, consider the following best practices:
Understand Total Compensation and Review Annually
Go beyond your base salary to calculate the full value of your compensation package. This may include 401(k) or other retirement account contributions and matches, health insurance premiums, stock options, tuition or continuing education reimbursement, paid time off, and bonus pay or profit-sharing. It is also important to find out if you have left any funds behind with previous employers. As of 2023, there were 29.2 million accounts left behind with approximately $1.65 trillion in forgotten assets, but thanks to SECURE 2.0, the Department of Labor created a database for workers to find old plans.3
We recommend clients review their benefits annually and adjust contributions and expenses as needed.
Max Out Employer Contributions
If your employer offers a 401(k) or other retirement account match, contribute at least enough to receive the full match, otherwise, you are leaving free money on the table and missing out on the power of compound growth. Similarly, if you have access to a flexible spending account (FSA) or health savings account (HSA), use it whenever possible to manage health and childcare expenses while lowering taxable income.
Leverage Equity Compensation Wisely
Stock options and equity-based pay can be a powerful part of your compensation package, but it is important to understand how they work. Do your research and find out your vesting schedules, your options for selling, and the potential tax implications. We recommend collaborating with your advisor at Vision Capital, as well as your tax and legal professionals, to plan for liquidity events such as an IPO or buyout, or personal shifts such as a career change or retirement.
Optimize Benefits Use
Take advantage of preventive care appointments and wellness programs through your insurance plan to reduce long-term healthcare costs. Explore additional benefits such as Employee Assistance Programs (EAPs), which may offer mental health counseling, legal guidance, financial education, and career coaching. And don’t forget to use all your paid time off (PTO); it’s a valuable part of your compensation, essential for career longevity, and critical for preventing burnout.
Sources:
- “Voya Survey Finds One-Third of American Workers Don’t Understand the Benefits They Selected During Open Enrollment,” Voya Financial website, January 29, 2021.
- Juliana Menasche Horowitz and Kim Parker, “How Americans View Their Jobs,” Pew Research Center, March 30, 2023.
- Jessica Kickler, “Forgotten 401(k) Fees Cost Workers Thousands in Lost Retirement Savings,” CNBC, June 7, 2025.
Department of Labor Retirement Savings Lost and Found Database:
https://lostandfound.dol.gov/
