Why Employee Benefits Matter
Employee benefits have evolved into an essential component of any competitive compensation package. Bonuses and incentives, ranging from legally mandated insurance to complimentary refreshments, can play an important role in attracting and retaining staff. Employee benefit programs require a large amount of time for many human resource professionals. And with good reason: they are an important part of employee engagement.
Amongst the advantages of offering employee benefits are increased loyalty to the company and job satisfaction. According to the 2020 Metlife Employee Benefit Trends Study, 69% of employees believe that having a broader range of benefits will boost their commitment to their business.
Usually, comprehensive benefits packages include medical insurance, life and disability insurance, pension benefits, paid time off benefits, and educational assistance programs. For companies and employees, the selection and design of benefits and other company wellness benefits has a significant impact on the overall cost of compensation. Some may even trade monetary compensation for other forms of employee benefits.
Unfortunately, 4 out of 10 employees believe their employer does not currently provide benefits or initiatives that help them. That is why employers must prioritize improving employee benefits seriously.
What Are Employee Benefits?
Employee benefits (or “benefits in kind”) are non-wage payments that employees receive in addition to their base salary or income. Competitive employee benefits boost the value that employees receive from their work and contribute to both personal and family well-being. Employees are happier and more motivated when they have benefits, which reduces the likelihood that they will look for new employment.
Types Of Employee Benefits
Good pay isn’t enough to attract the best talent anymore. More people are choosing jobs that suit their lifestyles. For great talent to apply and then stay, you must first examine your offerings. Here are some good examples of employee benefits.
Four Major Benefits
Most companies want to provide benefits to their employees but are unsure which ones to provide. To get you started, are the four major employee benefits.
The 401(k) plan is the most frequent type of retirement benefit. Employees can contribute a specific percentage of their earnings to retirement savings. Many organizations will match an employee’s deduction up to a specified dollar amount. Employees receive peace of mind knowing that they will continue to receive a monthly income when they retire.
Medical coverage is the most common and valuable type of employee benefit. Medical bills, doctor and hospital visits, dental and vision care are all on the rise, making it harder for employees to pay their medical bills. Employee benefits and productivity are interlinked, and a healthy employee is an effective worker.
Another popular employment perk is life insurance or accidental death and dismemberment insurance. Funeral and continued living expenses are covered in the unlikely event of an untimely death. If you’ve been through this, you know how financially stressful it may be.
Employers can provide short-term and long-term disability insurance. If an insured employee is wounded or sick for a long time, the benefit replaces lost wages. This way the employee can focus on getting better and not worry about medical bills.
Other Common Benefits
In many workplaces, paid time off (PTO) combines sick leave with vacation time. Employees are given a predetermined amount of vacation, sick, and personal days. There is also paternity and maternity leave available. Some employers may offer a flexible work schedule. Employees can choose their start and end times and their breaks, given agreed-upon management constraints.
Alternative Employee Benefits
So-called “alternative” benefits refer to a set of unique employee benefits that employers can offer. Offering these unique employee benefits or incentives, in addition to the standard basic package, will reinforce employees’ overall well-being. Check out these creative employee benefit solutions.
Holistic Wellness Programs
Beyond physical health initiatives, a holistic wellness program addresses all facets of health and well-being. These creative employee benefits ideas may include smoking cessation, weight loss, stress management, gym memberships, and participation in recreational activities. Aside from health coverage, mental health benefits are often provided as part of a wider health insurance package. Remember, putting people first does wonders.
Yearly Medical Screenings and Immunization
Employees benefit from an annual health assessment package since it alerts them to any potential health issues. Biometric screenings are also a great idea in keeping employees healthy.
Paid Trainings and Development Programs
Another excellent example of employee fringe benefits is paid employee training and development programs. These programs enable businesses to constantly enhance their employees’ performance. Learning programs include group seminars, long-term professional development courses, boot camps, and hands-on skill training. These will teach and train employees new processes that will make them a stronger asset for the company. Remember, up-skilling is both beneficial for you and your employees.
Coaching is an effective method of self-improvement that also provides attractive employee benefits. Individual coaching sessions boost employee engagement, and engaged employees are more inclined to contribute to the team and the organization as a whole. Employees are more likely to stay with their existing employers and contribute more, which helps both the individual and the organization. It also promotes psychological safety since employees will be more comfortable in speaking their mind.
Employee Discounts, Rewards, and Freebies
Giving employee rewards and incentives for a job well done is an excellent approach to increase employee engagement and add interesting employee benefits. This can be in the form of food vouchers, store discounts, care packages or cash rewards. It can also be used as a tool for employee recognition and boosting employee morale. The impact of fringe benefits on employee performance is immense since it shows to employees that they matter and the management appreciates their hard work.
The Importance of Employee Benefits
The importance of compensation and benefits to employees is that your personnel will be more motivated and loyal to the organization. The employee benefits offered in a company’s remuneration package are a key factor in an employee’s selection process when considering a job. Employee benefits assist them in covering medical bills, saving for retirement, and taking time off as needed. Understanding the importance of employee benefits packages allows managers to give more comprehensive packages in order to attract and retain top talent.
Let’s take a look at the top five benefits, and the importance of employee benefits to organizations.
Attracting New Talent
The term “The Great Resignation” refers to the international phenomenon resulting in a considerable number of people quitting their jobs. The fight for talent is more intense than ever, with employees expecting more from their companies’ benefits packages. High paycheck is not always the reason why people quit and choose their jobs. Even if you cannot afford a high salary, an excellent employee benefits package will attract top candidates.
Increased Employee Retention
Finding a new employee costs more than keeping one. It can take up to six months or more for a company to break even on its investment in a new hire. Plus, turnover is quite expensive; it is estimated that losing an employee might cost 1.5-2 times the person’s pay. Because many companies now offer a benefits package, employees don’t just compare salaries when looking for a new job; they also pick the one with a competitive well-being employee benefits package.
Fosters Positive Workplace Culture
Employee benefits contribute to a strong workplace culture by keeping employees satisfied with their jobs and working conditions. A solid compensation and benefits plan will lift employees’ spirits and, as a result, keep the workplace proactive.
Increase Employee Productivity
Employee benefits give your employees the tools they need to stay healthy and productive at work, benefiting both your organization and employees. For example, providing exceptional healthcare and covering the costs relaxes employees and their families. Research shows that employee benefit packages impact productivity at the workplace.
Boost Employee Engagement and Morale
Employee morale rises when they believe their employer is concerned about their health and well-being. This will ultimately increase employee engagement. People have strong feelings about the concept of benefits; they want something that will affect their lives both within and outside of the workplace. Allow your staff to participate in activities that are relevant to them or assist them in saving money to demonstrate your appreciation.
How to Create an Employee Benefits Plan
Employee benefits management is a critical requirement for all organizations, and it must be budgeted for accordingly. That is why companies should have a comprehensive benefits plan design that fulfills both employee wants and company objectives, given the employer’s expense investment and the crucial role of employee benefits in recruiting and retaining employees.
Here are the steps that you can follow when creating an employee benefits plan.
Identify the Goals and Budget of the Organization
An employee benefit program’s objectives must be defined. This will help to determine the benefits scheme design. Rather than simply listing available services, the organization should emphasize the benefits to both businesses and employees. It should also take into account the company’s size, location, industry, and collective bargaining agreements. Employers can do so by establishing broad benefit or total compensation targets.
Conduct an Evaluation Of Employees’ Needs
In order to establish benefit plans, employee needs must be addressed. By incorporating employee feedback, employers can acquire a better grasp of employee benefit requirements and criteria. Examine current employee demographics to evaluate staffing needs. Compile the needs assessment data and compare it to existing benefits to determine which will help the program in meeting its objectives. If employee feedback is gathered and used in the benefits design process, it will undoubtedly aid in avoiding common wellness program mistakes.
Develop a Compensation and Benefits Plan
This is a complex stage with multiple components. Is it possible to change the current strategy to save money? Is it possible to cancel employee perks that have not been used? What is the cost of administration? What cost-cutting measures are available? Employers are required to contribute; if so, how much? Employers will gain a better knowledge of the matrix and will be able to create a package that is both impactful and well-thought-out by answering these questions.
Establish a System for Periodic Evaluation of the Benefits
Another critical element in benefits management is the regular evaluation of the benefits plan program. Assess whether the employee benefits package satisfies the organization’s goals and the needs of its employees on a regular basis. Create objectives and metrics to examine and improve benefit programs. In addition to trends and benchmarking, the employer may conduct employee surveys and/or a full-fledged needs assessment to analyze the success of the benefits plan.
Why Employee Benefits Are Vital To Business Success
While it’s common knowledge that increasing sales and cutting expenses are necessary components of developing a profitable business, providing employee benefits can also contribute significantly to growth. The work market in today’s world is exceedingly competitive. Offering perks may be the deciding factor for a prospective employee who is also considering employment with a competitor. According to a Harvard Business Review Analytic Services survey, 60% of human resource leaders believe that an attractive benefits package plays a critical role in recruiting and retaining quality personnel.
Offering a comprehensive employee benefits package assists you in retaining top employees as well as recruiting the best candidates. Direct replacement costs, according to the Society for Human Resource Management, can vary between 50% and 60% of an employee’s annual compensation. Employee satisfaction is crucial to the growth of any business. When your employees are satisfied with their jobs, they are more likely to not only stay with your company, but also positively impact revenue.
By offering not just the usual employee benefits, you showcase your commitment to your employees as well as your concern as a leader for them and their families.
Contact Aduro today to bring a culture of well-being to your employee benefits!