Why it is important for you to focus on your employees’ benefits
From big organisations to small, all companies are facing one common question: how to keep our employees happy? The answer to this is not simple, but it is all about understanding the needs and expectations of the employees.
Charles Darwin brought forth the theory of biological evolution, which stated that all species arise and then develop through the natural selection of small, inherited variations increasing the individual's ability to compete, survive, and reproduce. The mechanism of this natural selection is termed as ‘Survival of the Fittest’.
When I first thought of growth and evolution of employee benefits, survival of the fittest is what came to my mind. It has two connotations to it - survival of the best employees as well as long-term sustainability and evolution of the of the fittest company.
We might look at these two aspects being independent, but today, companies are the fittest when they can not only retain their best employees but also make the other employees fit by training and nurturing them and aligning them to the larger picture, the vision of the company.
Initially, wages were the only benefit that was offered to the employee. Gradually, rewards and recognition became critical and, now, as the companies have realised the value that an employee brings in, this field has evolved manifold. Now employee benefits consist of many statutory benefits like gratuity, pension, PF, leaves as well as other benefits given by the employer, which extends upto flexible working hours, medical and health insurance, wellness sessions, recreational facilities etc.
Organisations have realised the importance of nurturing talent. They are now more aware that their show can go on only as long as the people (employees) are there to run it and even one erroneous employee benefits strategy could rattle their ship into troubled waters. Hence, taking care of employees is an important part of business plan and strategy.
Digitisation and the growth in employee benefits
We are in the midst of a digital transformation and employees are exposed to more and more information. With the innovation and increasing complexity in the employee benefits space, each organisation is competing to be the best work master in its domain.
Employees are also bombarded with information on media about ‘the best companies to work for and why?’, and companies to share their employees’ achievements on social platforms like LinkedIn and Facebook. Employees are sharing their achievements on social media as well, boasting about their job benefits. This leads to a sense of insecurity and dissatisfaction with the employees, especially when their expectations are not met. And not to forget, employee needs are fast changing and they are constantly looking for more.
Digitisation also has made job hunting easier. Finding a new job is now a matter of few clicks. Also, given the close-knit world and communication, it is easier for the companies to hunt good talent and acquire them.
So how does the company ensure that their employees are safeguarded? The answer is simple, understand the expectations of your employees, and align their expectations with the vision of the company.
Future employee benefits trends
- ESOPs - giving your key employees an option to be stakeholders in the company: ESOPs are options offered to the employee to buy the shares of a company at a discounted price on meeting some eligibility conditions. The major advantage of giving ESOPs to key employees of the company is that it aligns them to the vision of the company and they take on ownership.
- Group term insurance: Employees are given a life and accident cover with a fixed sum assured or a CTC-linked sum assurance taking care of their families.
- Group medical insurance: Employees and/or their dependents are covered with a fixed medical cover without any medical underwriting. In India, many employers offer an indemnity-based hospitalisation cover without analysing the needs of the employees being covered. Disease management is the last thing on the mind of a young employee in his twenties, whereas an employee in his mid-forties would be much interested in indemnity-based insurance. Employers should develop this kind of understanding of the employee demographics and the need for communicating this difference.
- Long-term incentive scheme: Companies can give their employees a deferred bonus if some criteria relating to sales, profitability, employee rating and/or continuity of service are fulfilled.
- Employee training & development: Employees are more engaged with a company that invests in their growth and development. Organising leadership, productivity, and other such training motivate them to not only improve themselves but to be more connected and contribute to the growth of one another. It breeds the culture of learning, support, and transparency in an organisation.
- Health & wellness sessions: Employees are deeply connected with companies that take care of their concerns and well-being. One of the ways of accomplishing that is by conducting training to help the employees on their health and wealth journey. This can include having regular health-camps/check-ups, yoga sessions, wellness therapy sessions etc.
- Financial planning sessions: Companies can also support their employees in financial management and planning by not only organising financial planning awareness seminars but also by hiring an independent financial advisor who can support them in meeting their long-term financial goals like marriage, child education, home, retirement and many more. Currently, there are not many employer-sponsored retirement plans. Hence, employees are left on their own for planning their retirement financial needs. Offering this benefit would be extremely beneficial to all employees, from a new graduate who can learn the benefit of saving early to a 40-plus-year-old mid-career manager who can plan for retirement and his family needs, to an employee who is nearing retirement and must start planning immediately.
Employers who provide retirement benefits should develop a communication strategy to raise awareness of the benefits and their values.
Giving flexibility to the employees
Flexi-benefits allows employees to choose the benefits they want or need from the various benefits offered by an employer. These plans may include health insurance, retirement benefits, and reimbursements that employees can use to pay for out-of-pocket health or dependent care expenses. In a flexible benefit plan, employees contribute to the cost of these benefits through a deduction in their salary before-tax, thus reducing the employer's contribution. In the short term, companies obviously benefit from sharing costs with employees. But a business may also choose to cap its future contributions to benefits by passing along increased costs to employees through these plans.
So what is the way ahead?
In a nutshell, there is no one key mantra of creating a best-suited employee benefits scheme. Companies and their decision-makers need to understand that there is no single solution-- the concept of one-size-fits-all cannot work. Employers need to be flexible enough to adapt their policies as per the employee’s needs depending on various factors like age, location, and understanding of issues. Else, the employees might not prefer or assign the same value to certain benefits. Strategic reviews and analysis of benefits can be used to help confirm the appropriateness of a particular initiative or indicate the need for an adjustment before any decision is taken.
Also, it is a myth to fulfill all the expectations of the employees. Then how can a company still ensure that the employees are productive, satisfied and happy? Well, the success lies in bridging the communication gap between the management and employees and being open and innovative in the approach. The organisation needs to be flexible with their benefit plans and probably even customise it as per the requirement of the employees. Flexi benefits, by and large, are being accepted well by both the employees and the employers, and it will evolve further.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)