Employee benefits have always been an important component of the total reward package offered by Companies. These have evolved, with many traditional benefits now replaced with newer innovative ones. Regardless of their nature, employee benefits remain influential and necessary. Why? A number of compelling reasons persist:
- They can provide long term security for employees and their families (Pension, health, disability, death benefits etc.).
- They help build-out and crystallise Employer branding.
- They support employee attraction and retention of talent. This can be critical in a restricted labour market.
- They can often be provided in a tax efficient manner
- They can easily be outsourced to reduce internal company administration workloads.
- They can evolve, develop and change to match the key needs of employee population demographics.
- They offer much more flexibility and can be scaled upwards or downwards to match company performance or business cycles.
- They help differentiate companies in the marketplace and highlight where companies sit versus best marketplace practice.
- They are often (if designed appropriately) capable of strong cost control management.
- They can be offered to employees as a self-service menu option, allowing the selection of individualised benefits that mean most to each individual employee.
- They are open to greater creativity in terms of design, development, modification and delivery.
- They tend to be less aligned to Organisation Structures/levels and are well capable of being linked to performance, recognition, promotion and career progression.
Pay and benefits are key elements of a company’s compensation model. Frequently most thought and effort is targeted into the pay element. Don’t ignore the benefit element. If well designed and strategically structured, the benefit component will offer significant advantages to organisations. Taken together with progressive pay structures, it is a cornerstone of any fit for purpose HR model. Done properly it will enhance business performance and your business leaders will thank you. Done poorly it will become a non-productive expensive fixed business cost, you’re unlikely to be thanked for that.
Food for thought?