Employee benefits are a form of non-wage compensation offered to employees in addition to their regular wage or salary. At first, providing employee benefits may seem expensive, but in the long term, the benefits typically outweigh the expense. It’s crucial to compensate your employees through means other than money. Doing so will help you attract top workers and keep them productive and happy, while boosting your competitive edge.
Offering employee benefits provides your workforce with enough incentives to maximize productivity and improve both morale and retention. Some benefits are considered legal requirements, such as health benefits for large companies, while others go above and beyond, such as pet insurance.
The following are the eight greatest advantages of offering employee benefits:
Advantage #1: Employee benefits increase your company’s appeal.
Getting loyal and skilled employees will strengthen your business tremendously. It establishes a strong foundation for your company. To attract highly skilled and qualified employees to your company, you need to be different from your competitors. This can be done by offering great employee benefits, such as health plans, unlimited vacation, and retirement plans.
Offering employee benefits will demonstrate to highly skilled and qualified candidates that you have a stable business and that you believe in it enough to invest in your workers. Instead of offering the bare minimum, make your business more attractive by providing benefits.
Advantage #2: The benefits will improve employee retention.
Constant staff turnover may leave your company in flux, impacting it negatively. Continually making changes in your workforce slows down your company’s progress.
Employee benefits make your workers comfortable enough to want to stay. Investing in your workers shows you value their performance and care about their well-being. In turn, they will genuinely care about the business’ progress. Consequently, you’ll have professionals staying for years with your company.
A departing employee could cost you up to twice their salary to facilitate the recruitment and training of a replacement. It also costs you in reduced productivity. Low staff turnover translates into a high return on investment for your company, making this one of the best advantages for offering employee benefits.
Advantage #3: Avoid being fined for not offering employee benefits.
Depending on how many employees you have and where you operate your business, you might actually be required by law to offer health insurance. If you fail to do so, you may face hefty fines.
Advantage #4: Employee benefits will lead to motivated workers.
Motivated employees work hard and tend to be loyal. This results in higher productivity. Not offering employee benefits can easily discourage your workers and reduce efficiency as employees feel undervalued and become distracted by personal challenges such as healthcare costs.
Motivated workers will speak well about your company, helping you attract top applicants to your business. It might be pricy to offer these benefits, but the long-term advantages outweigh the cost. A motivated workforce is a great advantage of offering employee benefits. These motivated workers will help to perch your company among the top leaders in the industry.
Advantage #5: Your employees will be healthier with the benefits.
Sick leave and good health plans ensure your employees remain in good health. This results in a more productive workforce.
When you offer employees health insurance as a benefit, they are more likely to have regular medical visits. Offering these employee benefits is highly desirable, since the benefits keep the workers in good shape and reduce the number of sick days taken off work. It also creates a healthy working environment for every worker.
Some companies even incorporate fitness programs in their employee health benefits for an all-round, healthy workforce.
Advantage #6: Employee benefits can generate increased net profits.
Net profit is a term used to describe the final total sum that remains after working expenses, which aren’t included in the gross profit, have been paid.
Many employees would prefer a lower salary with an excellent benefits package. And, in most cases, the cost of the benefits is usually lower, meaning that as the employer, you get to spend less. Besides the benefits package, the employee gets to have peace of mind. Offering benefits instead of a salary raise is mutually beneficial.
Advantage #7: You get tax advantages from employee benefits.
For both the employee and the company, employee benefits are tax-advantaged. Contributions to retirement and healthcare benefits are not the only ones that are tax-free. Others include tuition reimbursement, cafeteria plans, cell phones, meals provided in the workplace, life insurance, the use of a company car, and childcare reimbursement.
By offering these types of employee benefits, the company may be able to deduct its tax liability from the plan contributions.
Advantage #8: Employee benefits improves the company brand.
Employee benefits, or the lack thereof, can have a significant impact on the overall brand image of a company. When people are evaluating an organization’s brand image, the working conditions of the employees is an essential factor.
As the employer, you may not directly notice it, but most customers will appreciate the fact that you go the extra mile to provide a conducive working environment for your employees. Happy employees are likely to talk about your company positively and help in strengthening the brand image. Don’t underestimate the power an employee has over your reputation.
When an investor is interested in forming a partnership with your business, they’ll be interested to know how you treat your employees. In such a case, there are significant branding advantages of offering employee benefits.