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As an employer, offering employee benefits are well known for increasing the appeal of your company to potential employees. However many employers, whether they are established organizations or start-ups, fail to recognize the importance of a balanced and flexible employee benefit plan.
Too often employers end up with an offering that their staff fails to appreciate or even understand. What employers need to realise is that this process is deeper than merely grouping products like retirement, medical aid and disability together. It needs to achieve a careful balance between product and profitability as well as the level of investment at each employee tier.
Providing employee benefits – the basics
Depending on your industry, employee benefits can include anything from products such as medical insurance, life cover, retirement benefits, and disability cover to housing, education, daycare, etc.
There are a number of core advantages to offering these types of employee benefits to your staff, namely:
- Remaining an attractive option to employees
Recruiting the best staff is key to your competitiveness. But how do you help ensure they are not employed by the competition? By structuring the best Employee Benefit Packages, you can make your organization a more attractive option for potential employees allowing you to have the first pick of new and existing talent. - Demonstrate your willingness to add to the internal value exchange
The general well being of staff is improved when there is a sense that the company cares about employee needs and takes an active interest in them. - Reduced staff turnover
If you have recruited the best, you want these staff to stay and grow with your company. Your Employee Benefits Package can help to take care of your staff and improve their sense of well being, reducing the likelihood that they look elsewhere for more favorable conditions. - Improved morale and increased productivity
Happy employees are generally more loyal, harder working and therefore more productive. By investing in your employees, you are showing your organisation’s altruistic side and can reap the rewards of improved morale and increased productivity. - Healthier employees
Most Employee Benefit Packages offer medical cover, providing your staff access to medical care when they are ill. This generally leads to faster recovery time, less sick leave and with healthier employees, increased productivity.
A balanced approach to Employee Benefit Plans
Many companies group products together for their employee benefits in an attempt to stay competitive but are unaware of the other factors at play in this process.
A balanced approach to Employee Benefits Plans should consider two areas:
- Profitability and Product mix
- The level of investment for each employee tier
One of the main disadvantages of offering poorly structured employee benefits can be the associated cost…and this affects your profitability. It is therefore pertinent to understand the needs of your employees so that you can structure the product mix you offer to achieve a balance that satisfies employee needs while maintaining profitability.
It is also important to maintain a flexible benefit plan that can adjust to each employee level. A lower-level employee will value very different benefits to a high-level employee, therefore a one-size-fits-all plan should be ruled out.
Lastly the level of investment at each employee tier must be considered as this is where Employee Benefit Programs move beyond merely product-based offerings and can include areas such as training. For example, at lower tiers, teaching employees how to manage debt can reduce the associated stresses that lead to root problems like absenteeism and poor productivity.
By creating an Employee Benefits Plan that encompasses these areas, it has been shown to provide employers a significant return on investment through increased profitability and savings realised by reducing absenteeism, retraining and the cost of insured benefits.
GFB takes on selected clients and can act as an Employee benefit consultant, advising you on structuring your employee benefit plan to include the correct mix of products to help achieve employee well being. Speak to Ivan today on 021 434 8065.