The Importance of Employee Benefits for a Business

 

figure1:employee benifits; source (doyle, 2022).

The term "employee benefits" refers to any type of compensation other than wages or salaries that is supplied by the organization and paid for in part by the employer. Moreover, employee benefits are vital to the development of corporate industrial relations. Examples include retirement plans, child care, care for the elderly, programs for hospitalization, social security, vacation and paid holidays. According to Herberg's two-factor theory, an employee benefits package was a necessary and suitable working condition (motivation and hygiene). The hygiene factor will have an effect on employee job motivation and, consequently, productivity. Consequently, employee benefits are important if employee satisfaction and loyalty are to be maintained and improved(Ju, et al., 2008).

The Four Most Valuable Employee Benefits

Most benefits used to be classified as one of four main categories of employee benefits

·       Medical insurance

·       Life insurance

·       Retirement plans

·       Disability insurance

Why are employee benefits important

The best employee benefits have the capacity to enhance a worker's mental wellness, physical fitness, and financial well-being (Maggie Wooll, 2021). Candidates may consider benefits together with compensation when applying for jobs ( Indeed Editorial Team, 2021). The following are some of the reasons why being liberal with benefits can be profitable for a company,

 1.  Enhances employee productivity and motivation

According to (Baah & Amoako , 2011), the following are some examples of possible outcomes that can be brought about by combining the Herzberg hygiene and motivational factors:

·       High hygiene + High motivation = The optimal work environment is one in which employees are highly motivated and have minimal complaints.

·       High hygiene + low motivation = Employees have minimal complaints, yet lack motivation. The position is then viewed as a source of income.

·       Low hygiene + high motivation = Although employees are motivated, still have numerous complaints. A circumstance in which the employment is stimulating and demanding but the pay and working conditions are subpar.

·       Low hygiene + low motivation = Negative motivation: the worst circumstance Numerous complaints from disengaged personnel.

 

2. Enhance the Company's Reputation

Modern consumers have demonstrated that they are more willing to support a company that shares their beliefs. A company that mistreats its personnel is more likely to suffer commercial losses as a result of a public relations scandal. One dissatisfied employee is sufficient to lose money and client loyalty (Eden Health Team, 2011).

 

3. Increase Staff Retention

Approximately 80% of employees are actively seeking alternative employment. Therefore, businesses should not be complacent regarding this matter. Delivering benefits to employees is one approach to enhance staff retention. The employee will evaluate the employer based on the benefits provided, if the job and compensation are identical elsewhere (Richard, 2019).

 

figure2: employee retention benefits; source (Holiday, 2021).

4. Recruit the highest skilled workers.

To attract employees, businesses must give benefits. The most talented applicants may depart for businesses with better benefits. Because bonuses are often a deciding factor for employees. This is a significant portion of their pay. It is more than compensation. When a corporation offers benefits, it demonstrates management's financial confidence. Simply put, benefits demonstrate that you are a good employer, which attracts exceptional employees (Goodshore, 2022).

 

5.Work-Life Balance

Workers with benefits are more likely to balance work and life. When you give your employees time off for personal problems like illness or birth, they may spend time with their family and focus on themselves. A happy, motivated, and dedicated staff results (Choudhury, 2022).

Conclusion

The provision of employee benefits is an extremely valuable asset that every firm need to give some thought to offering. It is essential for there to be a positive relationship between employees and management in order for the firm to function without any interruptions.An employee's loyalty to their company tended to be higher when they received a greater number of perks and incentives from their employer. In addition to this, it contributes to the organization becoming more diverse, inclusive, and environmentally sustainable

 

References

SoonYew, Ju , LaiKuan, K., Hj Hussin, Z. and Jusoff, K. (2008) The Influence of Employee Benefits Towards Organizational Commitment, researchgate. Available at: https://www.researchgate.net/publication/41846246_The_Influence_of_Employee_Benefits_Towards_Organizational_Commitment (Accessed: November 2022).

Maggie Wooll, M. (2021) Employee benefits 101: An incomplete guide to get started, betterup. Available at: https://www.betterup.com/blog/employee-benefits (Accessed: November 20, 2022).

Choudhury, K. D., 2022. The Importance of Employee Benefits: Modern Employer's Guide. [Online]

Available at: https://www.loophealth.com/post/importance-of-employee-benefits
[Accessed 21 11 2022].

Indeed Editorial Team, 2021. indeed. [Online]
Available at: https://www.indeed.com/career-advice/career-development/why-are-employee-benefits-important
[Accessed 20 11 2022].

Baah, K. D. & Amoako , G. K., 2011. Application of Frederick Herzberg’s Two-Factor theory in. European Journal of Business and Management , 3(9), pp. 02-03.

Doyle, A., 2022. Types of Employee Benefits and Perks. [Online]
Available at: https://www.thebalancemoney.com/types-of-employee-benefits-and-perks-2060433
[Accessed 23 11 2022].

Eden Health Team, 2011. Why Are Employee Benefits Important?. [Online]
Available at: https://www.edenhealth.com/blog/why-are-employee-benefits-important/#:~:text=A%20good%20benefits%20package%20can,attract%20and%20retain%20top%20talent.
[Accessed 20 11 2022].

Goodshore, C., 2022. Top 5 Reasons to Offer Employee Benefits. [Online]
Available at: https://www.business.org/hr/benefits/top-reasons-to-offer-employee-benefits/
[Accessed 21 11 2022].

Holliday, . M., 2021. 10 Benefits of Employee Retention for Businesses. [Online]
Available at: https://www.netsuite.com/portal/resource/articles/human-resources/employee-retention-benefits.shtml
[Accessed 23 11 2022].

Ju, S., Kong , L., Hussin , Z. H. & Jusoff , K., 2008. The Influence of Employee Benefits. ccsenet.org, 4(8), p. 147.

Richard, M., 2019. Investing in Your Staff: The Importance of Employee Benefits. [Online]
Available at: https://www.customhealthplans.com/blog/2019/04/investing-in-uour-staff-the-importance-of-employee-benefits/
[Accessed 21 11 2022].