In today’s competitive talent marketplace, employee benefits provide a great competitive advantage for talent attraction and retention. Only Compensation is no longer an attractive driver for talent attraction, and the recent pandemic has reinforced the importance of benefits further.
A well-curated benefits strategy goes a long way in navigating through the ever-evolving candidate market and also helps in creating a distinct brand positioning for the employer. HR professionals need to be well versed in the possibilities that a good benefits package offers in winning the talent game.
But before setting up a new benefits program it’s important to understand what are employee benefits and their different types.
Employee benefits are a form of indirect compensation that is extended to employees by the employer in the form of programs, policies, services, or discounts. It may vary from health, lifestyle, time off, insurance, and retirement benefits.
Benefits can broadly categorised into three types:
Legally Required Benefits
These are statutory requirements mandated by the labour law of the country/ region of a particular jurisdiction e.g. FMLA protections, social security, workmen compensation, etc.
Discretionary Benefits
These are not mandated by law and are provided by employers at discretion to attract and retain talent. Some of these discretionary benefits are so prevalent in a country that it becomes an unsaid norm for employers to provide these benefits. E.g., Health insurance in India, Salary advances, and loans in the Philippines.
Some of these discretionary benefits are custom-curated to align with the organization’s culture and values and they position the employer as a forward-looking and caring employer who provides best-in-class and distinctive benefits. Hence the discretionary benefits are divided into two categories as below:
- Commonly Offered benefits
- New age distinctive benefits
Employee Perks
The third category is the employee perks which come in the form of discounted merchandise, food, gym memberships, movie tickets, sporting event tickets, etc. Perks are distinct from benefits because while benefits can be factored into total pay perks cannot. Perks are a form of incentive or extra reward that makes employment with a particular organization more attractive and appealing.
For designing a strategic benefits plan: Remember the three C’s. Customization, Cost, and Communication
Customization of Benefits with Talent Attraction Strategy
The first step is to understand your talent demography and work arrangements. Do you employ more feet on-street deskless workers, or work-from-home or office goers.
Deskless workers will appreciate benefits like earned wage access, remote employees will profit from work-from-home setup budget, and access to co-working spaces. While office goers would prefer subsidised or free transport to work. Also, are you employing a mixed generational workforce or more of Gen Z and Millennials? Assess the average age of your workforce and curate the benefits that appeal to your talent mix.
One size doesn’t fit all. Diverse people value different things when it comes to employee benefits. Consider creating a broad benefits offering while the employees can be given the flexibility to mix and match and opt for benefit options that suit them most. For example, medical insurance can be provided by the company for all employees but based on needs, employee can augment the coverages and opt for selective add-on plans or OPD coverages, etc on a self-paid or co-share basis.
An option like that will go well with a multi-generational workforce without hitting your budget. Effective use of technology in benefits selection and administration will help in increasing benefits utilization as this provides on-time benefit information to a multi-generational employee base working in diverse work arrangements.
Plan Your Cost and Budget for Benefits
The employee strength may be small or large, benefits cost form a significant percentage of the overall employee cost. These cost also vary by country. Understand the prevailing benefits costs in a country and industry by participating in benefits surveys, referring to published reports, and having a pulse of competitive benefits.
While introducing new benefits, consider evaluating proposals from all leading service providers, doing a thorough vendor evaluation, and exploring multi-year contracts that can provide a better cost advantage for the fixed implementation and benefit administration costs.
Make sure the proposed benefits costs are baked into the budgets by securing leadership alignment and sponsorship of benefit programs.
Communicate Your Benefits in A Consistent And Transparent Manner
Whether it is an existing benefit or a newly introduced benefit, the litmus test of a successful benefit lies in how well it’s understood at the employee level and first-line manager level. Try to leverage all sorts of communication channels like new hire onboarding communications, manager training, flyers, teasers, corporate mailers, company benefits page, policies, and employee handbooks.
For optimum utilization of a newly introduced benefit, explain the benefits through webinars, roadshows, and launch communications. Make sure employee queries are properly handled and HR Partners, managers, and recruiters understand the benefits clearly.
Another important consideration is the accessibility of benefit communication materials to employees at a place that’s easy to navigate. Make benefits resources accessible at employees’ fingertips as and when needed. Seeking employee feedback on benefits through regular pulse surveys is a good approach to assess and re-align the benefits program to keep them relevant.
Final Words
To summarise, a solid benefits program serves as a brand ambassador for your talent strategy. It is not only instrumental in talent attraction but also makes sure that the employees are happy, productive, and retained for longer periods.
Understanding the benefits landscape and customizing the benefit offerings based on the company’s talent needs and budget availability are key considerations for the design of benefits while communication, administration, and accessibility of benefits are critical for the successful implementation and utilization of your employee benefits.
Overall benefits support the realization of the company’s long-term objectives and gain a competitive advantage in an ever-evolving talent market.
