Attracting, motivating, and retaining good employees is sometimes a difficult task for any company. Therefore, benefit programs are a popular strategy for attracting and retaining talent and skill within a company. Besides, employees, more often than not, make the onboarding decision not on basic salary but due to the attractive benefits packages for themselves and their families (Ramadani et al., 2020). An effective strategy for identifying the variables to consider when providing employee benefit programs is Total Reward packages. In general, there are six main variables; recognition, compensation, benefits, work-life effectiveness, and talent development. Therefore, in any total rewards program, benefits become an essential component of the value proposition. Not only should benefits attract the desired talent and skill, but they should also incentivize employees to commit and remain at the company.
Variables to Consider when Providing Employee Benefits Programs
Of all the variables to consider when providing employee benefits programs, security, in its many forms, should be a priority. For instance, to ensure financial security, any benefits program should at least provide life cover, health insurance, and pension. It should be noted that these are just part of the value proposition and not exclusive or exhaustive. Health insurance is a mandatory variable. In detail, as part of the employee’s premium, the company should at least cover prescriptions, surgeries, and physician visits. Other benefits under health insurance include but not limited to coverage for the employee’s families in dental, yearly check-ups, and diagnostics.
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The second variable identified is that the benefit program should include a life insurance policy. This is a contract with an insurance company that insures the employee’s beneficiaries after their death (unexpected or not) with a lump sum payment, also known as a death benefit. Additionally, the insurance policy cannot be limited to just the death benefit. The employee can also offer dismemberment insurance that varies from payouts for injuries to disability insurance.
Lastly, the employee, as part of the benefits program, should consider offering retirement plans, like 401(k) or 403(b). Retirement plans, unlike life or health insurance, are strategic in that they ensure that the employees stay with the company in the long run. According to Kuaite & Noland (2019), care should be taken when designing and administering 401(k) as they have been the downfall of many businesses and companies. Therefore, care should always be practised when considering providing such benefits by selecting advisors with experience and specialization in 401(k).
Income Protection Programs v. Pay for Time not Worked Programs
If an employee gets hurt on the job or falls sick, an income protection program will help them to receive their benefits. Effectively, it is an insurance policy that pays out when the employee can no longer work. The income received, however, is usually a fraction of their income; otherwise, the employer would be paying out of pocket with no return. In contrast, pay for time not worked programs allow the employee to get paid for a certain period in a year without necessarily going to work. Essentially, federal law mandates that employers give the employees a cumulative number of days in which they can attend to personal issues (Noel, 2018).
Additionally, the employee can take advantage of pay for time, not worked programs by accumulating their time than spending it all at once (paid vacation) or taking their sick days as needed. The difference between these two is that income protection programs come into effect when the employee is sick or injured in the execution of their duties as part of their job description. On the other hand, pay for time not worked pays employees for things like conference events where the employee had to travel and sleep.
Despite the differences between the two programs, they have the following similarities. First, the requirements depend on the company or organizational standards. Some companies offer above-market benefits to be competitive, attract, and retain the best talent and skill. Secondly, income protection and pay for time not worked programs are a great tool that companies use to engage their core teams and talents. Besides, both are a great motivation tool, regardless.
Other Benefits to Add to the Benefits Package
As noted earlier, health insurance, life insurance, and retirement plans were not the only benefits to consider. Other benefits include, but not limited to, work-life benefits, and performance recognition. For instance, all employees, regardless of their job description, have to balance between personal and work life. Where the equilibrium settles is determined by the employees. However, it is the duty of every leader to give employees as much autonomy as possible. For instance, flexible working hours can help employees to schedule their activities to meet all objectives, especially for parents. Flexible working conditions also include working outside the office.
On the other hand, employee achievement, commitment, and investment should be rewarded. This gives the employees the sense that they are being taken care of, and their efforts do not go to waste. A popular trend today is that employees move from one company to another. This makes a turnover commonplace but says nothing about its rate. Therefore, for a company to minimize its turnover rates as much as possible, it should, as part of its benefits package, reward its employees for service, recognition, retirement, exceeding performance, and appreciation for work done, among others.
The third benefit an employer should include in its benefits package is an opportunity for career development. These opportunities would encourage the employees to grow and develop within the company while continuing to provide value. Career development opportunities vary from internships to promotions and transfers, paid educational leave, mentoring programs, self-development courses, and seminars by facilitating career development, the employer benefits in two ways. First, they get to retain a highly valuable asset which is committed to continuous learning. Secondly, the company gets to advance its internal competency and use it as a competitive advantage to not only attract more talent but also deliver quality products and services.
Other benefits that can attract employees are flexible spending account where they get to arrange to put money into an account for out of pocket health care services. These spending accounts are attractive because they are tax exempt. A health savings account, on the other hand, allows employees to save money for medical expenses on a pre-tax basis. Finally, employees could offer cancer insurance that payout when the employee is diagnosed with any form of cancer. Given the high prevalence of cancer among different populations, especially the working class, cancer insurance are an attractive way for employees to get supplemental insurance.
Employee Benefits for Exempt Employees
Due to the higher demand and reliance on exempt employees, they usually are never given a fixed annual base salary, nor are they given the same benefits as non-exempt employees. A benefits package for exempt employees, therefore, should include all three of the essential variables; life and health insurance, and a comprehensive retirement plan. For instance, apart from the basic 401(k), exempt employees can be offered stock options, vacation pays, extended sick leaves, and career advancement by helping them continue their education. Companies willing to go above-market will also open a cafeteria as well as free daycare as needed.
For this exempt employee, the first benefit to be offered would be a pension. The pension would always be cashed monthly while the employee receives their regular monthly check. When the employee reaches the agreed-upon retirement age, the money will be paid out with discrete cash out options.
The second mandatory benefit would be a generous health insurance policy depending on the employee’s value to the company. A fixed amount will be paid as part of their premiums with options to cover other family members. Additionally, if the employee works with their spouse, regardless of the other’s job description, the contribution to health insurance will be greater.
Thirdly, the benefits package will include flexible working hours. Since the exempt employee would be required to work more than the regular 40 hours a week, their productivity, especially with regards to work-life balance will be maximized by autonomy to work as conveniently as possible. Coupled with the flexible working hours, the exempt employee would be entitled to extend and flexible leave days. For instance, if the employee is highly valued, then the exemption can be made to roll over any unutilized leave days to the next year.
References
Kuiate, C., & Noland, T. R. (2019). Attracting and retaining core competency: a focus on cost stickiness. Journal of Accounting & Organizational Change.
Noël, A. (2018). The politics of minimum income protection in OECD countries. Journal of Social Policy, 48(2), 227-247.
Ramadani, V., Memili, E., Palalić, R., & Chang, E. P. (2020). Human Resource Management in Family Businesses. In Entrepreneurial Family Businesses (pp. 121-135). Springer, Cham.
