Microsoft is one of the biggest names in the technology industry. It is known for its innovative products and services like Windows, Office, and Xbox. But what makes Microsoft stand out among other companies is its attractive employee benefits and perks.

Let's take a closer look at the various benefits and perks offered by Microsoft that have helped the company attract top talent and maintain a low employee turnover rate.

8 Top Employee Benefits At Microsoft

Below are some of the best Microsoft employee benefits.

1. Microsoft 401(k)

One of the key attractions at Microsoft is the 401(k) plan. Microsoft boosts an employee’s retirement savings by matching 50% of their regular contributions, as long as they contribute at least that much. This generous offer stands for contributions up to $22,500 if they’re under 50 and up to $30,000 if they’re 50 or older.

Microsoft employees can contribute to their 401(k) in two ways: traditional pre-tax or Roth basis. In a Traditional Pre-Tax 401(k), their contributions are made before taxes, lowering the annual taxable income. 

Employees pay the taxes upon withdrawal. Conversely, they make contributions after taxes in a Roth 401(k). However, employees enjoy tax-free withdrawals during their retirement.

Essentially, it's about choosing whether "they pay the taxes now" or "they pay the taxes later." This flexibility allows employees to plan and manage their financial strategy effectively.

2. Health Savings Account (HSA)

The Health Savings Account (HSA) offered by Microsoft is another noteworthy benefit. It empowers employees to utilize their pre-tax income for eligible medical expenses, offering a remarkable triple tax advantage.

Firstly, employee HSA contributions are tax-deductible, reducing their annual taxable income. Secondly, their money will grow tax-deferred within the account. Lastly, they can make tax-free withdrawals to pay for qualified medical expenses.

This scheme is particularly appealing to talent, as it not only aids in managing healthcare costs effectively but also provides a tax-efficient way to save.

Notably, after the age of 65, employees can make non-medical withdrawals without incurring any penalty, offering them more freedom with their money. This combination of financial flexibility and health coverage makes Microsoft's HSA an attractive component in its employee benefits package.

3. Microsoft Employee Stock Purchase Plan (ESPP)

Microsoft's Employee Stock Purchase Plan (ESPP) is a valuable benefit designed to foster a sense of ownership among employees. It allows employees to purchase Microsoft shares at a discounted rate, typically 10% below market price.

The process is straightforward – a portion of their salary is deducted pre-tax to buy shares, and the discount applies at the point of purchase. 

The ESPP aligns employees' interests with the growth and success of Microsoft but also provides a considerable financial advantage. This benefit is a compelling incentive for attracting and retaining industry-leading talent, enhancing Microsoft's reputation as a desirable workplace.

4. Microsoft Deferred Compensation Plan (DCP)

Microsoft's Deferred Compensation Plan (DCP) is a unique benefit reserved for employees at Level 67 and above. It operates similarly to a 401(k), permitting investment of pre-tax dollars, which may substantially lower their annual tax bill.

Eligible Microsoft employees can save tens of thousands in taxes. The DCP provides two enrollment periods each year – May 1 through 31, allowing deferral of up to 100% of the following year's bonus, and November 1 through 30, permitting up to 75% of the next year's salary to be deferred.

This strategic financial benefit, exclusive to high-ranking employees, reduces tax liability and amplifies long-term savings, making Microsoft an attractive option for upper-tier talent.

5. Work-Life Balance

Microsoft prioritizes the well-being of its employees and understands the importance of a healthy work-life balance. To this end, the company offers several programs and policies aimed at creating a supportive and flexible work environment:

• Discretionary Time Off (DTO): This policy allows employees to take time off as needed without it counting against their vacation days. The DTO policy is particularly beneficial for employees who need time off for unexpected events or emergencies, as it allows them to attend to personal or family needs without the stress of depleting their vacation time.

• Flexible Work Schedules: Microsoft empowers its employees with the freedom to adjust their work schedules as necessary. This flexibility allows employees to work from home or shift their work hours, enabling them to operate when and where they are most productive. Such a policy aids in reducing the stress and time spent commuting.

• Backup Care: Recognizing that family responsibilities can sometimes conflict with work commitments, Microsoft offers backup care to help employees care for dependents when their regular care arrangements aren't available. This benefit provides peace of mind and supports overall employee well-being.

• Extended Parental Leave: Microsoft acknowledges the importance of supporting new parents during this critical phase of their lives. The company offers extended parental leave, including up to 20 weeks of paid leave for birth mothers and up to 12 weeks for other new parents. This policy helps new parents balance their work and family responsibilities, fostering a positive work-life balance.

This work-life balance allows employees to better focus and excel in their roles, knowing that they have the support of their employer in managing their personal lives.

6. Health And Wellness Programs

Microsoft prioritizes employee health and wellness, providing its employees access to various programs and resources. These include on-site fitness centers, group exercise classes, mental health counseling services, nutrition consultations, and weight management programs. 

The company also offers medical coverage for preventive care and vaccinations. These programs and resources support employees in maintaining a healthy lifestyle and promote overall well-being. This contributes to a positive workplace culture as it shows that the company cares for its employees. When employees feel cared for and supported, it boosts their morale and engagement, which leads to increased productivity, too. 

7. Discounts On Microsoft Products And Services

Microsoft values its employees' dedication by offering a remarkable perk – a 25% discount on all Microsoft products. This benefit, encompassing devices, software, and items from the entire company portfolio, is a testament to Microsoft's appreciation of employee commitment.

By making cutting-edge technology more accessible to its workforce, Microsoft rewards its employees. It also encourages their familiarity with the company's products. This dual advantage fosters a sense of loyalty, inspiring employee engagement and retention.

8. College Coach Program

Microsoft's College Coach Program is another fantastic perk. It's an educational benefit designed to assist employees in planning and financing their children's college education. The program provides expert guidance, from selecting suitable colleges to exploring optimal financing options.

This benefit is a game-changer in attracting and retaining talent. It signals Microsoft's investment in the future of its employees' families, enhancing employee loyalty and satisfaction.

It's a practical and thoughtful benefit that goes beyond the workplace, showing the company's holistic approach to employee well-being.

Final Thoughts

HR professionals can draw critical insights from Microsoft's employee benefits and perks. It's evident that Microsoft values its employees beyond their workplace contributions. 

By offering all these benefits, they address the holistic needs of their employees, signaling a long-term investment in their personal and professional growth. Such perks foster loyalty, reduce turnover, and attract top-tier talent.

Studying the benefits and perks of companies like Microsoft can help you gain valuable insights into attracting top talent and fostering employee satisfaction. As the competition for skilled employees intensifies, offering a comprehensive package of benefits and perks will be crucial in staying ahead.