Employee benefits are the various forms of compensation provided to employees in addition to their normal salary. Today as companies compete globally for the best talent, employee benefits form a fundamental part of any organisation’s reward strategy.
When designed, implemented and managed correctly, employee benefits enable you to support your employees while engaging them in your company’s values. Your employee benefits package provides employees with increased economic security and helps them feel individually valued by your company.
In turn, employee benefits generate a range of benefits to your business, from better rates of recruitment and retention across the organisation, to high levels of employee engagement. Ultimately, you can achieve return on your employee benefits investment.
Employee benefits can cover a broad spectrum. These range from financial benefits, such as a workplace pension and mortgage advice, to health and wellbeing benefits, such as private medical insurance and gym memberships.
Employee benefits can be made available to employees in a variety of ways. Core benefits are those that are provided to employees regardless of whether they have chosen them. Flexible benefits are those that give employees flexibility over what they choose. Find out more about flexible benefits.
Many organisations choose to offer a combination of core and flexible benefits, as a means of engaging employees in their employee benefits offering. Some companies use spending accounts to give employees more control over their choices while still controlling costs.
Concepts such as a Total Reward Statement (or TRS), where employees can view all the different elements of their package and understand its full value have proved a very effective way of enhancing the ROI on benefits investment made by employers.
Financial Employee Benefits
In many countries, companies have traditionally arranged a workplace pension for employees, into which employees are able to pay a portion of their salary. In most cases, employers also make a contribution.
In some countries, employees can make their pension contributions via salary sacrifice. This is when the employee contractually agrees to give up part of their basic salary in return for their employer providing a non-cash benefits. Employers can choose how to invest the National Insurance savings made from this arrangement, which are often used to fund other employee benefits or are paid to the employee as a pension top-up.
In countries such as the UK, automatic enrolment legislation requires employers to automatically enrol all eligible employees into a company pension scheme. While fulfilling their legal obligations, this gives employers an excellent opportunity to engage employees in the contributions they are making towards their future.
Financial planning benefits
There are many types of financial planning benefits that employers offer. For example, these can include providing mortgage advice, financial education, and retirement planning to your employees. These types of benefits help employees feel they have a better understanding and control over their benefits. They are also more appreciative of the employee benefits they receive, when they have a better appreciation of the value of what they are receiving.
Health and wellbeing benefits
An effective health and wellbeing strategy is achieved by providing employees with different layers of benefits, all of which contribute towards increasing their health and productivity.
There are lots of ways that you can use benefits to promote the short and long-term health and productivity of your workforce. Gym membership discounts, free fruit, health education and cycle to work schemes are all increasingly popular ways that employers can help keep their workforce healthy.
Employers can also invest in preventative health benefits, such as health screenings and occupational health insurance. These will help you identify and support employees before getting to the stage where they are seriously ill.
Private health insurance
Private health insurance forms a key part of most organisations’ health and wellbeing strategy. If employees do become unwell, it’s important they have access to the right treatment as quickly as possible. Health insurance gives employees and their families the peace of mind they need to know that if the worst happens they will get the treatment they need.