The Benefits of Offering Benefits

The Benefits of Offering Benefits

Employee benefits are good for employees and employers. But, the costs of employee benefits are going through the roof. A degree in human resources management helps HR professionals make tough decisions on the advice they offer the employer and how they communicate with employees.

Smart benefits

Employers are not required to offer holiday or vacation pay, compensation for jury duty, or the cost for personal or sick leave. However, employees have come to think of these benefits as entitlements, and employers would be smart to offer these benefits and communicate their value clearly.

Optional benefits

Employers offer other benefits to remain competitive: medical and dental coverage, retirement plans, life insurance, tuition reimbursement, and so on. Because these are of significant cost to the employer, you need to consider their value to employees and the employer.

The benefits of offering benefits

  • Job candidates will choose the job offer with better benefits. They know the real value and the tax advantages of accepting compensation in the form of benefits. Such benefits can be a decision maker or a deal breaker for the career-minded candidate who is looking to make a long-term commitment.
  • Employee turnover often occurs when an employee sees a fuller opportunity at a competitor who offers a larger or more customized package of benefits. Because employee morale influences productivity and quality, employee benefits reduce personal and family stresses on employees by offering peace of mind.
  • Employers can count on a return on investment. Turnover, absenteeism, retraining, morale, all these have intangible but considerable cost impact for the employer.
  • Savings to employees are enormous. Purchasing individual insurance, for example, if available are significantly higher than the group benefits offered through employees. Regardless of the employee’s actual share in premium, the out-of-pocket cannot be matched outside the employer’s benefits. Or, if the employer matches part of the employee’s 401(k) contributions, that is “free” money.
  • Higher take home pay results when employee contributions to insurance costs, retirement plans, and flexible spending accounts are made with pre-tax dollars. The expense to the employer is also tax deductible.
  • Employers benefit when employees are well, so assuring the accessibility to wellness and preventative care keeps employees working.

For example, a young company may not be able to afford a share in medical insurance premiums, but it might find the expense of life and disability insurance to be manageable. It might want to weigh that cost against the perceived value of putting the same money into a 401(k) match. But, no employer should underestimate the real cost savings and performance impact of offering group benefits despite their expense.
There are, then, markedly significant individual and corporate benefits to offering a well packaged menu of discretionary employee benefits. Each company has to evaluate the cost of the benefits with the return on the investment, and each company has to re-examine its commitment at different stages in its growth and development. It needs to assess the value to its employee demographics and to anticipate the financial impact of future changes in benefits cost.

About the author:Dee enjoys freelance ghost writing and also does some guest blogging/writing as well. She writes mostly about current events or trends in various industries.
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