5 Benefits of Implementing an Employee Benefits Schemes in your Business

Being a business owner, are you afraid of the fact that implementing a comprehensive employee benefits scheme is not worth your investment? Then it’s high time that you give it a second thought. Employee benefit schemes are non-waged compensation plans offered by the business to itsemployees that are beneficial to their family and future. In addition to their regular salaries, these comprehensive benefit plans give the employees a feeling of motivation and satisfaction that the company truly cares about them. Health insurance schemes, retirement plans, paid vacations are a few of the variations of employee benefit schemes offered by the organization. Employee benefit schemes are equally important to both the employee and employer. To the employer because it allows them to earn more productive results and to the employee because they get a feeling of concern and consideration not only for them but also for their families.  According to a Metlife study of 2020, “59% of employees say employers provide employee benefits schemes to support and improve their well-being during this time.”  As this post focuses more on the benefits of an employee benefits scheme, there is a lotof space for discussing that. But before doing so, learning the demerits of such schemes is crucial.  Most companies tend to spend 30% of the compensation as a part of employee benefit programs. And this figure is quite big for an organization. The increasing cost of health insurance plans is another demerit of such schemes.  Last but not the least, one major drawback of such schemes includes the involvement ofhuge time and manpower to keep track of all these schemes. The more schemes one business offers to its employees, the greater its maintenance efforts become. Therefore, though employee benefit schemes offer a number of advantages, it often becomes difficult to overcome these challenges, particularly for small businesses. Therefore, though the benefit schemes allow the employees to enjoy various perks and add-ons, they may not be apt for all businesses.  

Why must you have an employee benefits scheme? 5 reasons 

Source Now that we have understood the demerits of an employee benefits scheme, let’s move on towards its merits.  In a tight labor market as of today’s hiring top talents and then retaining them is a major challenge. Under these circumstances, offering perks and benefits not only act as an employee engagement tool but also nurture a positive work culture. Like these, there are various other reasons behind having an employee benefits scheme. Below mentioned are five of them:

1. Improves productivity and efficiency at the workplace 

Employee benefit schemes play a great role in improving productivity and efficiency at the workplace. By offering your employees a wide range of schemes, you give him/her more reasons to stay loyal to your company. And once they realize that their company is taking care of matters beyond their free meals and pay-offs, automatically they put their best efforts in their role. But before you modify your ongoing benefit schemes aiming towards more productivity, youmust consider a few things. Start by evaluating your current employee productivity. Make sure that all the fair standards are in place to index the productivity of each position. This not only helps you in understanding individual performances but also gives you a clear idea about how the ongoing schemes need modification in order to improve the current performance indexes.         

1. Allows you to enjoy tax privileges 

The combination of various ton-taxable fringes is indeed a valuable perk to the employees. An employee’s tax expenditures can be discounted by offering child care reimbursements, cafeteria plans, health insurance schemes, etc.  Schemes offering health and dental benefits are deducted on a pre-tax basis which meansthey are debited from the employee’s paycheck. As a result, it slashes down the amount of payable tax from an employee’s salary. Similar other pretax basis fringes include pension plans, group term life insurance and child care assistance plans. 

1. Attracts new talent 

For sure, you can’t imagine in your wildest dreams that employees will accept your joboffer just because you are offering an evening cappuccino with extra milk! The competition to attract new talent has always been prevailing in the market. About 60% of employees believe that non-waged benefits play a major role in considering whether to accept the job or not. Furthermore, almost 80% of the employees will choose perks and fringes over a regular pay hike as a deciding factor in the job offer. Therefore, it is quite evident that attractive schemes attract new talents. Also, employee benefit schemes are often used as a strategy to stay ahead of the competitors. It has been observed that companies offering better employee schemes as a tool for recruiting new talents perform better than their competitors. A well-planned employee benefit plan covering every nook of his/her future and family will surely have a win over an unplanned one. The point doesn’t end here! Losing a valuable employee may cost you twice that person’sannual salary in the recruitment and training process of a new one. Therefore, chalking out an appealing employee benefits scheme is always a wiser and economical choice for a business’s growth.

1. Ensures a healthy work environment

Source If you are tired of hearing from your employees about their health issues, it’s time that you revise your employee benefits scheme! Healthy employees are happy, productive, and hardworking. With mental health issues being a major concern now, you need to focus on an employee’s mental well-being as well.  Gym memberships, spa facilities, yoga classes, nutrition workshops are similar ranges of memberships that take care of their both mental and physical welfare. On top of that, it gives them a feeling that they are valued and cared for in the organization. Such health schemes are profitable to the businesses as well as they acquire less margin than the traditionalbonuses.  Another major advantage of health plans is that they ensure the presence of a healthier workforce. Better health schemes mean lesser sick leaves and more attendance. Consecutively, this renders a positive effect on the productivity of the organization in the long run.     

1. Helps in retaining your employees for long term

There was a time when employees used to work at a single place throughout their life. But sadly, the scenario has changed. Try to incorporate a wide range of benefit schemes if you want to improve your employee retention benchmarks over the years. A good scheme makes the employee identify their worth in their organization which in turn improves the employee retention rate of an organization. Along with implementing some best employee retention strategies, perks like flexible schedules, discounts on products and services, new baby funds, etc. helps in escalating the retention rate at your business. A handsome benefit scheme has a great impact on employee satisfaction and happiness. Providing employees with offers and discounts which they can enjoy during their free time while saving their pocket gives them a feeling of appreciation and gratitude. This not only boosts their morale but also makes them more engaged and productive at work. 

How to design an employee benefits scheme?

We agree that managing employee benefits scheme is an expensive affair. Though there are some benefits that are mandatory by the employer, such as the unemployment insurance or the worker’s compensation insurance, other benefits are absolutely voluntary in nature and depends on the employer whether they would like to introduce in the organization or not.  Read employee incentives and share schemes guide to learn more. Again, the selection and the design of various employee benefits schemes are important components in the total compensation plan. There are cases where benefits form 40% of the entire compensation package. However, the primary objective of any employee benefits schemes is that it should meet the needs of both the employee and the employer.  Here are a few ways to design an effective employee benefits scheme:

• Identify the benefits and budget of an organizations’s benefits
• Conduct a needs assessment to determine the best benefits 
• Create a benefits plan design using relevant data 
• Communicate the plan to employees
• Review the plan to determine its effectiveness

Conclusion 

Employees want to be rewarded, recognized, and appreciated. The three words of ‘employee benefits scheme’ mean a lot more than the traditional interpretation.  While planning out an attractive employee scheme, initially it may seem that the cash outflow is hitting a higher limit; and it’s obvious that it will. But if you closely observe its long-term advantages, it’s surely going to help you in establishing a successful brand value. Any business that is looking forward to establishing itself in the market must consider offering attractive employee benefit schemes to its people.  With the new generation of employers, employees, and a competitive targeted market, it is a need of the hour that you own a skilled, talented, and experienced workforce. And an enticing employee benefit will not only help you with better employee retention but also will gift yourorganization a team of robust and productive employees.