Employee compensation and benefits - BLOG8

 

fig - 1 https://www.dreamstime.com/employee-benefits-as-recruitment-bonuses-business-labor-outline-set-employee-benefits-as-recruitment-bonuses-business-image213431452

INTRODUCTION.

Employee benefits refer to various forms of indirect compensation that are given to workers in addition to their regular salaries.Medical insurance, life insurance, retirement benefits, fringe benefits, paid time off, social security, and other specialty benefits are just a few examples of the benefits that employees may receive from a variety of sources.The employees most likely to qualify for receiving employee benefits are those who are working under strict deadlines, fulfilling those deadlines, or whose work is being completed with complete concentration or attention.However, since it aids in their expansion, some businesses continue to make it mandatory to offer employee benefits.

The significance of pay and benefits - According to the 2016 Employee Job Happiness and Engagement study from the U.S.-based Society for Human Resource Management, 85% of employees stated remuneration was important or very essential to their job happiness. There is no denying that employee motivation and satisfaction are significantly influenced by the company's payment structure. In the same poll, 92% of participants rated overall perks as vital or extremely important, demonstrating that benefits play a part in motivating employees. Employers who offer comparable compensation can be differentiated by a strong benefits package.

fig - 2 https://www.hrreporter.com/focus-areas/compensation-and-benefits/how-compensation-and-benefits-can-motivate-employees/358978

Types of Employee Benefits

The following four categories of employee benefits exist:
 

1. Advantages for health and well being.
2. Monetary and retirement advantages.
3. Benefits for time off and leave.
4. Advantages of work-life balance.

Benefits related to health and well being include employee assistance programs, wellness initiatives, prescription drug coverage, dental, vision, and health insurance. Benefits related to money and retirement plans, pensions, profit-sharing programs, employee stock ownership plans, and financial planning support. Vacation days, sick days, paid holidays, parental leave, and additional leave are all examples of time off and leave benefits. Flexible work schedules, telecommuting, child care support, and eldercare aid are all advantages of work-life balance.

FIG - 2 https://www.pacificprime.com/resources/employee-benefits-common-uncommon/

Advantages of Employee Benefits

1. Competitive benefit packages aid in luring and keeping talented workers.

The most well-liked perks are a comprehensive vacation policy, flexible sick leave options, and adequate health insurance that covers vision and dental. You have a better chance of luring in and keeping valuable personnel if you can provide rewards that are worthwhile.

2. You can reduce salary costs by obtaining a decent benefits package.
Many workers are ready to settle for a lesser pay check in return for greater benefits. This can be quite beneficial in a year with limited funds because salaries are frequently the highest expense for a large number of firms. 

3. Effective perks can lower absenteeism among employees.
This is particularly true if a thorough health insurance plan is in place. The likelihood of employees expanding their insurance options, earning awards, or participating in wellness programs all assist in cutting down on the amount of sick days that could be taken.

 

4. They produce opportunities for word-of-mouth recruiting.

An employee will spread the word about their fantastic benefit to family and friends if they receive 6 weeks of holiday leave each year. This enthusiasm makes a natural promotional spokesperson for the company, which enables them to hire more qualified candidates without incurring the costs of continuously advertising a position as open. 

 

5. A robust benefits package can lower turnover.
The expense for educating a new employee is one among the greatest hidden costs that every firm faces. A robust set of employee perks can help employers avoid the expenditures associated with high turnover rates.

Disadvantages

1. For certain employers, there might not be many options.
The kind of perks that small businesses may be able to provide their employees are particularly constrained. This is so that small businesses may not be able to afford better benefits, particularly retirement or pension plans, which frequently have higher administrative costs.

 

2. They are expensive.
Today, the average package of benefits offered to employees is almost equal to the salary that is paid. As a result of the fact that many employees do not consider benefits to be part of their compensation package, this amount of spending must be appropriately controlled.

3. There can be problems with following the law.
Employees must receive certain perks in a specified manner. Legal expenses must be paid in order to ensure that a business is complying with these requirements and to confirm that each and every item is being delivered legally. Many workers are unaware that this additional expense exists in order to give them the benefits they require.

4.Employee benefit errors may result in legal action.
There is a significant likelihood that an employee will file a lawsuit if a corporation fails to provide a promised benefit. In addition to paying additional legal fees and the cost of the perk that still needs to be provided, there may be regulatory sanctions associated with such an error.

Conclusion

Today's workforce needs an employee benefits package that is comprehensive. Traditional organizational-oriented benefits have been utilized alone, but many organizations are including employee-oriented benefits to better serve their employees.Although providing employee benefits may initially be more expensive, the long-term benefits outweigh the costs by helping your company succeed. Comprehensive benefits draw better candidates and keep them on board over the long term, which benefits employers by fostering a happier and more productive workplace.

References

Available at;https://www.hrreporter.com/focus-areas/compensation-and-benefits/how-compensation-and-benefits-can-motivate-employees/358978. [Accessed 02nd May 2023].

Available at; https://www.researchgate.net/publication/357768286_Impact_of_compensation_and_benefits_to_employee_motivation_in_a_business. [Accessed 02nd May 2023].

FORBES (2023)

Available at; https://www.forbes.com/advisor/business/employee-benefits/. [Accessed 02nd May 2023].

Available at;https://maxxia.co.uk/blog/pros-cons-employee-benefits/. [Accessed 02nd May 2023].

 

Available athttps://content.wisestep.com/advantages-disadvantages-employee-benefits/  [Accessed 05th May 2023].