Employee retention has increasingly become a popular topic as time goes. Companies want to retain their most experienced and effective employees. Furthermore, no firm wants to train employees then lose any of them within a short period of time after they have been employed. Human resource is as crucial as any other profit-generating activity within a firm. To keep a special employee, a company has to offer attractive incentives that will make the employee’s stay in the firm comfortable (Jean, Ngui, & Robert, 2017) . Aside from the organization’s culture and the nature of the work environment, a benefits package is among the top concepts that determine whether an employee stays in a firm for long or not.
The Benefits Package
Health insurance is certainly on top of the list when it comes to a good benefits package. This is, however, the most expensive package for any company. In fact, small enterprises have chosen to drop this package in recent times. This has contributed to a huge dropout of employees from such firms. A quality health insurance package is what employees tend to look at when looking for job opportunities. To make the benefit attractive, the insurance can be tailored to cover not only the employee but also his/her family.
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Paid Time Off (PTO) is also another benefit that should be included in a comprehensive package. Employees know that a time off is inevitable at some point in their careers. With this fact, no employee wants not to be paid just because they have taken time off which tends to be unavoidable most of the times. There are a variety of PTO options that can be covered. They include paid holidays, sick days, vacation days, bereavement or funeral leave, and personal days. The organization can prioritize some of these options and do away with others. However, an attractive package should cover all of the PTO options.
Disability insurance has increasingly become popular with time. Both long-term and short-term disabilities should be catered for in this type of insurance. Disability, in this case, is any illness or injury condition that makes an employee unable to work for a short or long time. A long-term disability can last up to 2.5 years. Employees want to know that they will still receive payment even after they are rendered disabled. Accidents occur and it is never the wish of an employee to stay out of the workplace for a long time. Disability insurance is a critical component of a benefits package.
The 401(k) package of an alternative retirement plan is another crucial element of a benefits package. If a company is looking to work with its employees for a long time, then it must have an attractive retirement package for them. The economy is known to be unstable and employees like to think about how they and their families will live comfortably after they grow old and retire (Schnake, 2016) . Most employees are comfortable with the 401(k) retirement plan.
Aside from health insurance, the health care flexible spending account (FSAs) plan is another important benefit that most employees have begun to consider in recent times (Garabato, Garner, & Nyce, 2017) . Health care premiums have continued to rise at a high rate. With this, employers are finding ways to shift the associated costs of premium healthcare to employees by invoking higher co-payments, out-of-pocket costs, and salary deductibles. The out-of-pocket expenses have proved to be high and as such, employers have implemented the health care flexible spending account (FSA) plan which lets employees pay for healthcare expenses that are not reimbursed using before-tax money.
Life insurance is a critical component of a benefit plan as it ensures that employees’ families are able to meet their needs in case of a tragedy such as the death of the employee. Offering this incentive to an employee, especially one with an extensive nuclear family, shows that the organization cares about them. It even creates a sense of community. Life insurance can either be offered for a specific period or permanently. The permanent plan can be whole, universal, or variable. A permanent life insurance plan is an attractive benefit to most employees.
Necessary Benefits
The selection of benefits depends on the financial capability of the firm and the importance of the individual to the organization which depends on the role the individual plays in the firm. The more influential the individual is, the more benefits he/she gets. The top 5 most important benefits in order are:
Health insurance
Vacation and Paid Time Off
Pension Plan
401k Plan
Retirement Plan
These benefits are the most essential to employees in most workplaces currently. Most of them revolve around health dues and payments after retirement. The disability plan is not as essential as the rest since it is rarely triggered. Most injuries and accidents experienced by employees tend not to be so major and are covered by the health insurance and PTO plans. The life insurance plan comes 6 th in the insurance priorities for most employees. As much as it seems crucial, it is not considered as critical as health insurance covers and benefits related to retirement.
References
Garabato, N., Gardner, J., & Nyce, S. (2017). Global Developments in Employee Benefits.
Jean, K. N., Ngui, T. K., & Robert, A. (2017). Effect of Compensation Strategies on Employee Performance: A Case Study of Mombasa Cement Limited. International Journal of Innovative Social Sciences & Humanities Research , 5 (3), 25-42.
Schnake, M. E. (2016). Antecedents and Outcomes of Employee Benefit Satisfaction: An Updated Model. American Journal of Management , 16 (3).
