Research shows that almost 80 percent of those employed want employee benefits. But are these benefits essential? The answer is absolutely. In fact, benefits are just as important as a good salary, and are one of the factors that will make an employee decide whether he or she wants to work for you.
Benefits Increase Retention And Loyalty
One reason why many large businesses have a high turnover is because they don’t give their employees the benefits they deserve. Those that underpay or refuse to provide benefits put themselves at a long term disadvantage particularly in markets where competition for skilled employees is high. Having the best and brightest working for you rather than your competitors for as long as possible is one of the best ways to capture greater market share, but you have to be willing to pay people what they’re worth. This includes giving them great benefits.
Benefits Increase Productivity And Attendance
There are two ways to get employees to work harder, and this either through coercion or providing incentives. Few people will work hard when they have to worry about adequate pay or providing healthcare for their families. The best you’ll get are employees who do the bare minimum, and this is not enough to help your business grow and prosper. Coercion will only lead to employees quitting and possible litigation depending on the jurisdiction in which you’re based. People work harder when they have something to work towards.
Providing benefits will also boost attendance, which is an issue for many companies. There are three primary reasons why people are absent from work, and this is either due to health problems, finance or commitment to their families. Providing the right benefits with a good salary will significantly reduce absenteeism.
Which Benefits Should You Provide?
Various forms of insurance are quite popular among employees. This includes dental, life, health, disability and long term care insurance. Additional benefits that will be attractive to employees include some sort of retirement savings and a traditional pension.
Another incentive which will appeal to many employees is profit sharing. It is a payment system in which employees have the opportunity to earn more than what they receive through a standard salary. For example, if you run a company which provides a subscription based service, you could offer your employees a profit sharing plan in which every subscription they earn through their personal website or blog results in them receiving a portion of the profit in the form of passive income. You would need a way of tracking it but providing such a benefit would set you apart from competitors who only pay salaries as it would give your employees the opportunity to significantly increase their earnings.
Henry Ford believed that he should pay his employees high enough so that they could afford the cars they manufactured. This is a philosophy that should be followed by virtually every business, irrespective of industry. If you are not paying your employees enough so they can afford your product or service, then you’re underpaying them.