Industries With the Best (and Worst) Benefits
U.S. unemployment remains at its lowest point in over a decade. A healthy economy in general spells good things for businesses, but one byproduct of this for employers is a smaller talent pool, and greater competition among companies to attract candidates. Employers can attempt to woo workers through higher salaries, but sometimes an enticing benefits package will do the trick.
Companies can offer many different perks and benefits but the most common benefits include health insurance, retirement plan contributions, paid vacation and sick leave, profit sharing, and tuition assistance or reimbursement.
Depending on the industry, certain benefits are widespread, or nearly nonexistent. For example, according to data collected by the U.S. Census Bureau’s Annual Survey of Entrepreneurs, 29.3% of private sector workers have access to profit sharing or stock options at their company. Among information workers, 58.2% have access to profit sharing, compared to just 3.1% of workers in the agriculture, forestry, fishing and hunting industry.
Based on this Census Bureau data, 24/7 Wall St. constructed an index ranking each of the 18 major industries based on access to benefits.
Providing higher salaries and more benefits serve the same purpose for employers — attracting and retaining top talent. Often, in more competitive industries, workers tend to receive more of both. Each of the five industries with the highest benefit coverage rates has a higher average income than the annual average of $53,515 across all private sector jobs. In utilities, the industry with the most widespread benefit coverage, the average private sector worker earns $102,868 a year. At the other end of the spectrum, construction is the only one of five industries with the worst benefits that has a higher than typical average annual wage.
A comprehensive benefit package can be tremendously beneficial to private sector workers — but also expensive for employers. This is one reason for the rise of labor unions. Labor unions serve to increase the collective bargaining power of their members to negotiate for more favorable pay and benefit packages. Indeed, often times the industries with the best benefits also have relatively high unionization rates.
For example, 25% of all workers in the utilities industry are union members, well above the 10.7% unionization rate across all jobs. Utilities workers also happen to be relatively well paid and report the best benefit coverage of any industry on this list. However, high union membership rates do not always guarantee the best benefits. In construction, for example, an industry reporting generally worse than typical benefit coverage, 14.0% of private sector workers are unionized, more than double the 6.5% private sector unionization rate across all industries.
Union membership is also by no means a precondition for good benefits benefits. Many of the industries with the best benefit coverage also have relatively low unionization rates.
In industries where a large share of workers are their own employees, benefits can still be provided — for example, those who are self-employed and own a business can deduct health insurance on their tax returns — but unlike at a major company, there is no group of employees to demand these benefits.
The agriculture industry has the lowest benefits coverage rate of the major industries. Among farmers, ranchers, and other agricultural managers, more than 85% are self employed, by far the highest share of any occupation.