Employee benefits theory and strategy behind them
|✅ Paper Type: Free Essay||✅ Subject: Business|
|✅ Wordcount: 1160 words||✅ Published: 8th May 2017|
Employee benefits are essentially welfare programs implemented by many organizations to take care of the basic needs of their employees. Employee benefit programs include group insurance for health, dental and life, income protection, retirement benefits, daycare, tuition reimbursement, sick leave, paid vacation, social security, and other specialized benefits. Employee benefit providers are the companies that provide such benefits to different organizations. A lot of insurance companies are employee benefit providers as insurance is a major part of employee benefit.
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Employee benefits providers continuously update themselves on the factors affecting employee benefits program. They research and implement new ideas based on new benefit schemes being implemented by progressive companies. They provide need-based solutions to their clients. These needs depend on a number of factors such as the job function and responsibility of an employee, company type and the number of employees.
Employee benefit providers play an important role in the marketing strategy of a company in the job market. Every company looks at recruiting new employees and takes steps to retain them. If they do not provide them adequate benefits, the employees might leave the company and join one with a better benefits structure.
On an average, companies spend around 20 to 40% of payroll costs for providing benefits to their staff. Employee benefit providers provide accurate and extensive information regarding the work practices and the types of benefits provided by various companies that have retained their services.
A company’s human resource personnel can visit the website of employee benefit providers and choose a program that suits theirs as well as their employees needs. Employee benefit programs are beneficial for employers as it helps them get tax-benefits. Employers are eligible for tax deductions based on their contribution to an employee benefit program whereas the employees are not levied any tax on these benefits.
Employee strategic benefits philosophy
In the current business environment, it has become extremely difficult for many companies to find employees that suit a particular job profile. Therefore, it has become very important to retain existing good employees. There is so much competition around in the marketplace that every company is looking to source out top performers from rival companies with the lure of higher salaries and better perks. In such an environment, prospective employees have become more demanding in their compensation expectations. They typically look for more than just a basic salary in return for their commitment to the company.
Employee strategic benefits philosophy is thus based on providing the best benefits programs possible to the employees so as to ensure that they continue working for their company. A good benefits program is essential to attract and retains top performers in any company. Employee benefit programs provide human resource solutions that keep the company competitive.
Human resource directors often come face to face with challenges where they are required to offer and manage benefits that are beneficial for both the employee as well as the employer. The principal objective behind benefit programs is that they should be able to foster loyalty from employees and thereby spur the growth of an organization.
To maximize the benefits, a strong relationship with the consultant who can provide the right solutions according to a company’s unique needs is absolutely essential. These consultants design a package that meets the goals of the organization while maximizing its benefit dollars.
These strategies also provide a company with a variety of resources to communicate efficiently with its employees. With a strategic implementation of a benefit program, an organization can expect decreased absenteeism, lower health care costs, fewer workplace accidents, and improved productivity.
In the business environment of today, risk management is not limited to securing an organization from criminal acts. Operation methods, management-related risks and employee safety are also included as a part of a holistic risk management strategy. Employee benefits help cover the cost for all these and more. These benefits also help provide for better training for the employees, which, in turn insures better and increased productivity.
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Employee benefits strategy
An employee benefits strategy is devised after an organization conducts research to understand what benefits it must offer based on federal employee benefits laws. Subsequently, the human resource directors of an organization select employee benefits programs by using employee benefits surveys. It is important for HR directors to know of methods to control per employee health care costs. The basic plans that are offered by major organizations are employee health insurance, employee vacation benefits, defined benefit pension plans, defined contribution plans, dental insurance, life insurance, disability insurance, and workers’ compensation. Employee benefit communications program are also a part of employee benefits strategy.
It is necessary to understand the intricacies of US federal employment laws that lay the guidelines for compensation and benefits administration. This is important as employees can take their employers to court for not following these federal guidelines. Therefore, employers and human resources professionals must have precise information regarding the requirements of federal law towards employee compensation and benefits administration as well as the requirements for record keeping, hiring, and firing. They have to ensure their organization complies with employment law, labor laws, and compensation and benefits management regulations.
The major categories of employee benefits are voluntary benefits, mandatory benefits and individual programs. Voluntary benefits are mostly employment-based benefits such as retirement plans and health insurance that are provided voluntarily by businesses. The government grants tax benefits to both the employers that provide them and to the workers who receive them.
Mandatory benefits include social security, unemployment insurance, workers’ compensation, and family and medical leave. These are usually mandatory under federal or state law. Individual programs are government-supported individual financial security programs such as individual retirement accounts (IRAs), tax benefits on life insurance contracts, and tax-free death benefits.
It is advisable that employee benefits strategies are devised and implemented right at the time of commencement of a new business and reviewed at regular intervals. This ensures compliance with federal and state laws and also helps retain employees.
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