Benefits vs Perks: What belongs in a job ad?

When writing a job ad, it’s important to differentiate between benefits and perks—two terms often used interchangeably but which have important differences.

Benefits typically refer to essential offerings that are provided to employees as part of their compensation package: Think retirement plans, paid time off (PTO) and parental leave and health insurance. On the other hand, perks are additional, often non-essential extras and frequently discretionary or location-limited. Perks can include things like free snacks, gym memberships, casual dress codes, or pet-friendly offices.

Benefits typically pass a materiality threshold

While both aim to attract candidates, benefits are typically more substantial and consequently are more attractive to candidates. While perks can give a window into your company's culture, they don't make significant difference to a compensation package. In contrast, benefits are essential for supporting employees' health, financial future, and personal well-being. Consequently, they vary widely depending on the locale:

• In the U.S., employers offer health insurance, retirement savings plans (such as 401(k) contributions), and paid sick leave.
• In many European countries, benefits may include paid parental leave, generous vacation time (sometimes upwards of 25 days annually), and robust social security systems that cover healthcare, unemployment, and pensions.
• In some parts of Asia, such as Japan and South Korea, it’s common for employers to provide housing allowances or transportation stipends as part of the benefit package.
• In Australia, employees enjoy paid public holidays, superannuation (pension) contributions, and paid parental leave.

Best practices for job ads

Given their impact in a candidate's decision to apply, benefits are critical components of job ads. Perks, though appealing, are not universally critical and can be left out of job ads or mentioned later during the interview process. Perks are also not considered as sufficient to comply with pay transparency in states where benefits are required disclosure. Focusing on benefits in a job ad ensures that candidates understand the tangible support they will receive, while perks can be seen as added bonuses that help attract talent but are secondary to the primary needs of employees.