“The essence of a gift is not in what is given or done, but in the intention of the giver.” Seneca, Letters on Morality
How many times have you heard or witnessed that a company has provided benefits for its employees that they don’t even use? What is needed for the introduction of a benefits system to truly be successful, and what benefits can companies derive from it?
Benefits represent much more than one-time rewards, mere costs, unnecessary administration, and tax implications. Why is that so and what is the purpose of employee benefits?
Benefits will positively impact employees only when we know that salaries meet employee expectations and when they are competitive in the context of standards for a given industry, position, seniority, and geography.
A “one size fits all” approach never could have the same effects on different individuals; however, technology is finally here to enable personalization in practice. When we talk about personalizing benefits, we mean the possibility for each employee to choose exactly the benefits they want.
In a broader sense, flexibility is a key term that will define the future of employer-employee relations. When we talk about benefits, it is very important that the system allows flexibility for employees, which means that they can change and adapt their choices to their new needs as these change over time.
It is very important to differentiate how various categories of benefits affect employees. What practice shows is that benefits that come from the categories of family, health, and education have the most positive impact on employees because they are the most personal and “hit” the areas that are high on employees' priority lists.
In the post-pandemic era, one thing is certain – remote work and hybrid work will definitely remain present to a significantly greater extent than they were before the pandemic, and benefits need to be suitable for remote work so that employees can also choose benefits that are not tied to a physical location.
Technology has spoiled us quite a bit and set high standards in user experience. On Netflix or Amazon Prime, we can watch the movie we want at that moment; through CarGo or Uber, we can summon a vehicle we need with just one click on the app; on Airbnb, we secure accommodation in another city in just a few clicks. These are the standards we need to apply to benefits – to enable an easy way to order and use benefits without any unnecessary administration.
Something we often take for granted, but we shouldn’t. We live in a time when each of us is bombarded with hundreds of different messages daily, so it is important that benefits are clearly and consistently communicated to employees using the most appropriate channels.
Additionally, for us as employers, it is very important that all this is done in the most efficient way, taking into account time and money, i.e., that these processes are automated and digitized, that we only pay for benefits that are actually utilized, that everything is compliant with tax regulations, and that through people analytics we can observe the correlation of the impact of benefits on other HR metrics (employee satisfaction and commitment, retention, absenteeism, etc.) and thus approach one step closer to calculating the ROI of benefits (Return on Investment). Only then will we be able, when management or capital owners ask us, “What did we gain specifically and measurably by investing in benefits?” to respond in business language clearly referring to concrete numbers and clear effects.
The effect of benefits: satisfied employees – a satisfied company
Now, let's return to the question of the purpose of benefits and the effects we can achieve through a good program. Once we have created a system that provides a meaningful and efficient framework for delivering benefits, both for employees and, no less importantly, for employers, we need to define what we can influence in our company through benefits.
One of the key values that a personalized benefits program focusing on benefits from the domains of family, health, and education can bring is the message of the employer's care for each individual employee.
By investing in employees, employers gain a more engaged, loyal, and productive workforce. Indeed, SHRM's (Society for Human Resources Management) research has shown that companies that use benefits as a strategic tool for hiring and retention perform better (58%) compared to companies that do not (34%). Therefore, if you want to achieve optimal results and satisfy all stakeholders, you will strive for your employees to be motivated, engaged, and efficient. If you offer them benefits that meet their needs, it will mean that you care about them.
There is no need to elaborate on the costs of employees leaving the company. By introducing a quality benefits program, employee retention will be greatly facilitated, and many studies confirm this. For example, “Willis Tower Watson,” a global consulting firm with offices in over 140 countries, discovered, through surveying around 18,000 employees, that 78% of them would stay in their jobs if the benefits program offered by their employer is good.
Candidates today have the power of choice and are becoming increasingly selective in their job search; thus, they boldly demand a clear answer to the question of why they should work for you. If you offer personalized benefits where each employee can create a package tailored to their needs and if through them you demonstrate the value your employees hold for you, you will stand out from the rest and thus gain an advantage in hiring talented and promising individuals. According to a Glassdoor survey, 63% of respondents said they highly consider the benefits offered before accepting a job offer.
If the focus of the benefits program is on personal well-being, education, and the family sphere, it would convey a clear message that the organization cares about the well-being of employees as individuals. This, in turn, can greatly contribute to strengthening the company culture, employee loyalty, and motivation.
Companies can create a significant savings base with the appropriate structuring of benefits and the use of tax-efficient employee benefits, whether through provision of benefits through a tax-free approach or through making benefits such as health insurance costs tax-deductible.
All this needs to be done as efficiently as possible while having a clear connection to company goals. Only then can we talk about the essence of the benefits program and achieving mutual satisfaction for employees and the company.
If you want to learn more about how to implement an efficient benefits system in your company, contact us.
