I. IntroductionMost benefits are a form of non-taxable income to employees, providing them with such advantages as retirement provisions, paid personal time, insurance and health protection and various other employee services. Benefits are to increase an employee's feeling of security, happiness and wellbeing. The aim of benefits is to attract better, more skilled employees and be competitive in local market for most positions.
The benefits provided can range from bonuses for performance to different insurances to discounts or even material gifts. It depends on the company, market and employee structure and needs which benefits will provide the best effects on performance and company culture. Benefits can also be used to increase employee loyalty, by providing more than do others, thus relieving their company of costs associated with finding a replacement.
Some benefits may seem inadequately expensive while others might be more effective in achieving the objective with less cost. However, it is important not to look at just the obvious price, but also at the other costs associated with providing or not providing a benefit.
Health Insurance Does Not Insure Health
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insurance brokerThe hidden cost of not providing a benefit is the cost of high turnover, the cost of lost productivity or the costs of providing other substitute benefits.
The workforce quality goes up with the quality of benefits provided. The more and the better benefits an organization provides, the more skilled workforce it can attract and retain. If education is provided as a form of benefit, it can be the means of having higher skilled workforce without the need for recruitment (4).
I. What are benefitsBenefits are extra services provided by an employer to his employees, they are an indirect form of the total compensation to an employee (5). Benefits include mostly health insurance, paid time from work and retirement income, but they can vary into...