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At one time, people left education, got a job and worked their way up through that company until they reached the level they wanted. It wasn’t unusual for employees to spend their entire working lives with the same employer. This often with minimal, or maybe no specific employee benefits to speak of.
Believe it or not, that wasn’t so very long ago.
Now, it is extremely rare for an employee to stay with the same company from apprenticeship to retirement. The norm is to join a firm for a few years and then to achieve promotion by leaving one company and moving to another.
It is also normal for businesses to offer a raft of employee benefits on top of salaries, designed to help to attract and then retain good staff.
What employee benefits?
It was once considered to be a good deal if you were offered a company pension scheme, paid holidays and a company car. These days, employee benefits can still include those, but could additionally feature major items like:
- comprehensive health, mental health, wellness and dental insurance packages
- life insurance
- company loan schemes
- flextime
- telecommuting
- gym membership
- in-work creches or child-care provision
- all employee car schemes
right down to fun things like dress-down days, Treat Tuesdays and Bring Your Pet days.
Advantages of offering employee benefits
Recruitment and retention
As already mentioned, the name of the game these days is to attract and then hang on to excellent staff members. A company which has a constant turnover of vital employees will always be in a state of flux. The constant recruitment and settling process for new employees makes a negative stop-start, staccato impact on the company progress and growth.
Naturally, there’s much more to keeping staff than offering them free Danish pastries with their morning coffee. However, building comprehensive employee benefits packages can go a long way to making key people comfortable enough to stay.
The other companies in your sector will want to do the same and may also want to entice your employees to join them instead. Therefore, making sure you’re offering a good employment deal is fundamental. A lost employee can cost you up to twice that person’s annual salary in recruiting and training a replacement, so providing a good benefits package begins to look like a cheap option.
It needn’t cost a fortune and can give an ROI well above the outlay.
Less sick leave
For example, private health insurance packages are very popular with employees. If you calculate the costs of the cover alongside days or weeks of sick leave and lost production while your staff wait for NHS treatment, the advantages of health-related employee benefits start to become obvious.
Health insurance has also been shown to decrease absenteeism and improve employee morale. Those with cover are more likely to seek preventative care and live overall healthier lives, meaning less time off work. Happy and healthy employees are loyal, productive and hard-working employees and they naturally lead through to well-served and happy customers.
As the bulk health package you’re able to get for your employees will be likely to work out cheaper per head than individual private insurance, don’t forget to tack yourself on there and make use of the good deal for your own health provision.
Lower salary bill
Often, employees will be happy to take a lower salary if the benefits package is good. Work it right and the cost of the employee benefits will be lower than the cost of the employee’s salary, saving the company money.
Tax advantages
Businesses can deduct employee health insurance, life insurance, and pension plan costs from their tax liability.
Disadvantages of employee benefit packages
After reading the preceding paragraphs, you may be wondering if there are actually any disadvantages to providing your staff with an excellent benefits bundle.
Well, there aren’t many and virtually all apply to smaller businesses.
Buying power
The bigger the buying power for items like health insurance, the lower the prices that can be negotiated. Large companies will have less issues with this than smaller ones, obviously.
Rising costs
The costs for health insurance particularly are on the increase every year, which can make it difficult for smaller firms to keep up. Switching providers to find the lowest-priced options can be cumbersome when it involves re-registering all the company employees. Also, any health issues which have arisen since taking out the original policy are very unlikely to be covered under a new one.
Admin costs
Monitoring and administering benefits can be time-consuming. The more benefits your company offers, the more time and therefore cost is involved in keeping everything on track and up to date.
Conclusion
With the employment market as it currently is, it’s obviously important to offer your current and prospective employees a comprehensive package of benefits if you’re to attract and then keep them.
Working out just what to offer and then maintaining the high level of value can be a tricky process, but is necessary if your workers are to remain happy and productive.
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