While it is true that the most popular benefit an employer can offer is health insurance, it is not necessarily the most universally applicable. For example, some employees are covered under their spouse's health insurance plan, so not all employees need it. Also, most employees have come to expect the employer to provide some type of health plan. And as for offering stock options, well, I think most employers would agree that option programs have lost some of their appeal. In addition, options are rarely understood or appreciated by the employee and they are not always an efficient method of providing a long-term benefit.
Employers can also attract employees by offering a match in the plan.
Not only does the employer get to help those who help themselves, but, best of all, the employer can take advantage of the matches on their own contributions. It is important to note that the employee is always vested in his or her contributions from day one. Should an employee leave prior to complete vesting in the matching contributions, the non-vested portion comes back to the employer and can be used to offset future matches. During the dot-com boom, federal government contracts were viewed by many companies and investors as not sexy or exciting. However, there is nothing like a serious downturn in the economy to make companies look for other options to stay afloat.