A Complete Guide to Employee Benefits
Believe it or not, there was once a time when people worked for the same company for more than 10 years, hoping to work their way up to a seniority or management level position. The overall goal was usually to get in the company from the level of a simple contracted employee and move to a manager in a certain department. Well, this perseverance to progress from one career stage to another is long gone. Why?
Because people can move from one company to another for faster promotions. This has led to the adoption of different strategies by corporations in an attempt to retain their employees. As such, businesses, large and small, now offer employee benefits on top of employee salaries to attract and retain the most qualified personnel.
What are Employee Benefits?
They are different types of non-wage compensation given by employers to their employees besides their salaries and normal wage. They include health, mental health, wellness, and dental insurance packages, life insurance, company loan schemes, all-employee car schemes, telecommuting, gym membership, paid time off, and many others. Bring Your Child and Pet days, dress down days and Terrific Tuesday treats are, in fact, also part of employee benefits. Employee benefits seek to increase motivation and productivity, but they have other benefits besides his major one.
How Do Employers Benefit from Employee Benefits?
• Healthier Employees
One of the most common employee benefits is health insurance. Nearly 70% of all businesses in the U.S. offer health insurance to their clients. This means that in the event of an illness, your employees can visit a hospital without much hassle. This means that their relative health is maintained throughout the year.
Moreover, they do not have to fall ill to visit the doctor. Since they have a solid health insurance plan, they can go for regular checkups and take preventive steps to keep them perfectly healthy. This means that the quality of work is excellent throughout the year since you have a healthier workforce.
• Better Job Performance
When employers give employee benefits, it shows that they care about the well-being and future of their employees. This way, they remain loyal and care about the work they do. These practices lead to better performance and commitment to work while also considering company values. In turn, the work is of a higher quality and employees are able to feed off each others’ positivity and productive habits. Research has actually shown companies that offer employee benefits perform up to 40% better than companies that do not. Now, if that statistic doesn’t open your eyes to the importance of benefits keep reading below.
• Increase Business Appeal
There are not many people who are dedicated, proficient, and committed to the work they do, let alone for years on end. If a business has those dedicated employees, it’s in its best interest to retain them. If it does not have such employees, it’s in its best interest to attract them in any way possible. That said, to attract top-class employees, one of the easiest tricks in the book is paying your employees well and giving them comprehensive benefits packages. It’s no wonder that McKinsey Quarterly revealed that attracting talent was the biggest reason that companies offered employee benefits.
• Minimize The Rate of Turnovers
No matter how profitable a business is, as long as employees constantly come and go every few months, it is difficult to progress. Establishing the desired level of employee skill, talent, and demeanor needs every business to establish a veteran team of experts. This is why every business that wants to make serious progress should take up an employee benefits scheme. This way, a close-knit team that shares similar goals and values can be established.
• Better Morale
Last but not least, benefits boost employee productivity and morale. As employees work tooth and nail to make your company more profitable, giving back to them will go a long way. Imagine looking forward to an expense-paid trip at the end of the year, or retirement benefits, and so on, as opposed to persevering through the monotony of an office job without anything to look forward to!
Are there any Cons to Employee Benefits?
Like all good things, employee benefits have a downside, especially for small entrepreneurs and companies. First, they cost money that would otherwise increase profit margins. Since smaller companies have lesser buying power and no access to “wholesale” discounts, they incur higher costs. These fees and profit cuts explain why most small employers abandon employee benefits.
This situation is made worse by the fact that health insurance costs are on the rise, and retirement plans are too expensive because of the administration costs involved. Moreover, are the legal fees paid when it comes to legal compliance. As if that’s not enough, the legal aspect could also lead to very expensive lawsuits, potentially putting them out of business.
All in All,
For large corporations, employee benefits have now turned into a necessity. On the other hand, small businesses may incur too much cost, but there comes a time when it is more expensive not to offer employee benefits than to offer them in most cases. When it reaches such a point where the business growth is exponential, there is a need to retain employees, attract talent, and foster a positive culture by offering employee benefits!