What are employee benefits? “Various forms of indirect employee compensation that employers use to attract, recognize and retain workers”- (SHRM)
The success of any company, regardless of its size, depends entirely on the quality of its workforce. The company depends on its employees to use their talent, skills, and experience to contribute towards the growth and development of the company. And the talent that the employees bring to the organization needs to be not only maintained but also motivated over a long period of time in order to achieve the best possible results. According to a human resource consulting firm, Joe Lineberry, senior vice president at Aon Consulting "The research shows that when employees feel their benefits needs are satisfied, they're more productive."
But how do you achieve this? For the most part, the salary paid by the job itself serves as a motivator for your employees to continue showing up for work every day. Most employers are content providing salary-based compensation to their employees. However, many previous studies conducted over the past years have indicated that most employees of a company work with an expectation of non-financial rewards. "There are some benefits good employees feel they should have," says Ray Silverstein, President's Resource Organization, founder of PRO. These non-financial rewards are called employee benefits, and they can be of over a hundred different types.
Most common types of employee benefits are health insurance, paid maternity and paternity leave, minimum wage, overtime and compensated holidays. These benefits may be mandated by the law, such as in the case of minimum wage and paid maternity and paternity leave, or they may be offered by the employer out his or her own choice.
The size of a company determines to a large extent, the type of employee benefits that can be offered to the workers. All companies are required by law, to offer the basic benefits, which include:
Allowing ex-employees to maintain an identical level of insurance coverage from the previous employer while looking for a new job.
Employees who are injured while at the job can receive workers compensation which is covered by the state workers compensation laws.
This federal law ensures that workers are allowed paid leave in case of family or health issues such as the birth of a child or sickness.
The Fair Labor Standards Act (FLSA) set up a minimum wage that employers were required to pay hourly workers. While the minimum wage differed based on what kind of job, or which state you worked in, it helped ensure that employees were paid sufficiently to compensate for the work they do in order to financially support themselves.
Workers are entitled to receive extra pay when they work additional hours apart from their regular work hours.
Apart from these state-mandated benefits, many companies choose to offer a variety of other common fringe benefits that can be tailored to the workers specific needs in order to create a more fulfilling job experience. These include:
“A generous benefits package is essential for engaging and retaining your talent.”- Patrick Colvin, Strategic HR Business Partner at the USA Today Network
The decision to offer employee benefits to your workforce is not an easy one. There are many factors to consider before putting a benefits scheme in place, the most important issue of which is to consider how much the scheme will cost the company, versus the overall contribution it can make towards the company’s success. The advantages of offering employee benefits, however, are well documented and supported by years of industry research data.
Offering employee benefits as part of your worker benefits package to prospective employees ensures you create a competitive salary package which will attract the top talents in the field, as packages with moderate salaries but plenty of benefits are favored over higher salaries but lower benefits. Such schemes also help to reduce the number of employees that may leave your company to find work elsewhere, because of the high levels of satisfaction that they obtain from their job.
Subsidized gym memberships, dental care insurance, healthy food in the break room, pay raises, work breaks- all of these job perks help reinforce positive behaviour among employees through establishing a work ethic and team building that encourage a high-performance culture.
“Providing benefits can put you above 43 percent of competitors who don’t offer extra benefits.”-Business.org
The advantages of offering a range of employee benefits are apparent in the success of companies such as Netflix, Motus, Genentech, Adobe and Amazon.
This online streaming giant is well known for its liberal benefits plan. With a workplace attitude of “work smarter, not harder”, Netflix employees enjoy healthcare programs, excellent life insurance policies, paid time off and free food at the company.
The most generous benefit is paid maternity and paternity leave of up to one year that the employees can opt for in order to look after and spend time with their newborn children.
Motus offers its employees a range of benefit plans that include gym memberships, student loan reimbursements, and company day service. This offer has allowed them to hire and keep talented young professionals for whom student debts are a huge financial burden.
Genentech's workplace benefits include tuition assistance, paid sick days, on-site childcare support and great healthcare plans. Apart from this, on-site life at the company is made easier and efficient through services like car wash, haircuts, and spa services. Employees who have worked full time for the company for more than six years can also enjoy a six-week break along with full pay and benefits.
All of this has helped the company consistently make the Fortune’s variety of “best companies to work for” lists.
Amazon is a global online giant, with a workforce spanning continents all over the world. And the company knows how to keep its thousands of employees happy with their job by offering a selection of benefits to choose from. The most striking of this is its offer to allow their employees to share their paid leave with their partners who are not offered the same benefits at their company.
Adobe was listed among the “Glassdoor Employees’ Choice Best Places to Work” list for 2018. This is through their efforts to emphasize career development for their employees through various training and mentorships plans. These benefits are especially vital to the career of the employees given the highly technical field that they work in. they are also offered incredibly lucrative healthcare and retirement programs, as well as excellent educational and child day care plans.
“The fact of the matter is, after health insurance, the most required benefits and perks are those that bring flexibility while improving work-life balance.”-Patrick Colvin
When deciding to create and implement a new employee benefits plan for your company workers, there are a number of factors to consider.
The first of these is to understand the type of workers you employ and what kind of benefits they want and how this would actually help them engage better with their job.
One of the most common perks offered by most companies is health care benefits, which take off a huge burden off families who cannot afford highly expensive insurance plans. Paid time off as well as paid parental leave are also highly sought after, as they allow the workers to seamlessly balance professional and personal life without having to sacrifice either.
Pensions and retirement plans are great perks to motivate employees to continue working for the company.
Wellness programs can help companies ensure that their employees remain healthy and active.
Companies that offer flexible schedules retain far more employees than those that don’t, especially with today’s millennial workers' generation. “Encouraging employees to stay home, if possible, not only reduces the stress of their day but shows them that we value their safety. In return, we often see the employees ‘online’ or still producing work remotely.” — Robin Schwartz
These programs work especially well with technical companies where employees benefit greatly from onsite training courses. Not only does it enhance the skill set of an employee, but over time this also translates into a more productive workforce.
Attracting and retaining talent in the workforce are two of the most important aspects of running a successful business venture. Employee benefits are non-wage compensations offered in addition to a staff member’s salary, and some of them can be quite valuable to retain talent and attractive for potential candidates.
As the proposed employee benefits package can play a significant role in negotiations between employers and talents they wish to interest, recognizing what your organization can offer is vital. Here are 7 types of employee benefits your company should consider including in the package, in addition to the ones that are requested by law (such as minimum wage, overtime, compensation, and disability insurance).
The most important of employee benefits that the prospective staff care about are their health-related ones. Medical benefits such as health insurance, dental insurance, life insurance, disability income protection and long-term care will show the staff that your company values their contributions as well as their wellbeing.
Health and dental insurance, the most vital of all the above-mentioned medical benefits, will, among other things, help your employees get private rooms in hospitals should they need them, cover the costs of prescription drugs, and offer them a choice of different dental treatments. Disability income protection covers the employee’s compensations in case they get sick or injured, while long-term care compensates for expenses for ill or injured employee’s care.
Certain employee benefits aim at taking care of your workforce even after they retire. Pension covers a fixed amount of funds to be allocated to the employee after retirement and at regular payment intervals. Retirement benefits can include perks apart from a pension, like providing specific health-related advantages.
A considerable number of your staff members are likely to have spouses and children, while some of them might be in need to take care of their elderly family members. Creating the employee benefits package that focuses on helping workers keep the balance between their family and work life is the right decision for every business, no matter how big or small.
Parental leave benefits include paid maternity, paternity, and/or adoption leave. This benefits offering generally also includes programs to help workers choose the best daycare for their children. Dependent care benefits represent a notable aid for the employees that need their sick or disabled children or elderly relatives watched after attentively.
Respecting your employees’ wishes to learn and develop personally and professionally will grant your organization a lot of points when it comes to acquiring and retaining talent. Workers will highly value for an employer who’s willing to provide education and training benefits such as mentorship programs, seminars, conferences, or tuition reimbursements.
In the long run, these expenses will really pay off for your organization, bringing in and keeping the competent, educated, satisfied employees who are happy to work in a company that cares about their needs.
Transportation benefits for employees will help them manage the costs of office travel. These perks may include reimbursements for using public transportation methods (buses, trains, or metros), covering the costs of other transportation types, or even providing vehicles such as cars or bicycles to drive to and from work.
Relocation assistance benefits help your staff members make an efficient and painless transition from their current locations to the location of your business. Your company can even offer exclusive perks like travel benefits, which will attract a lot of potential employees you wish to interest in your organization.
Sometimes your employees may find themselves in need of professional legal advice concerning matters such as family law or real estate planning. Allowing them to approach your company’s legal representatives with issues they need help with will help you score high with both potential staff and current workforce.
The traditional understanding of the workplace is rapidly changing, and a mixture of different generations and demographics in the workforce demands that companies keep up with the pace. The demand for improving general working conditions shows no signs of stopping, and your organization should at least try to accommodate the requirements most employees today find essential at the workplace.
Offering your staff excellent general working conditions that include workplace flexibility, positive company culture, and other perks such as reasonable workload, low occupational stress or job security will help you appeal to the best candidates for the positions in your company.
Once your company has decided to put a specific benefits plan in place, the next step is to strategize and implement it.
Step 1: The best first step is to begin by taking stock of your existing benefits-what are they? Are they being used extensively by the employees? How is their use contributing to overall company performance?
Step 2: While formulating a benefits program, make sure the benefits you offer align with the long term goals you have set for your company. Avoid wasting money on benefits nobody may use by educating your employees on the available benefits and encouraging their maximum use.
Step 3: The most successful benefit plans are employee specific. According to paymediahcm.com, 58% of employees want customized benefits options, and you can ensure widespread use by allowing employees to choose their own tailor-made plan.
Step 4: The most important aspect of any benefit plan is to show employee appreciation. To make sure the employees feel irreplaceable and not interchangeable.
As put by Nate Masterson: “No matter what you choose, it’s important to make employees feel like people that have something to offer, not just numbers or placeholders.”