A substantial employee benefits package will be a brilliant way to keep the most qualified and talented employees and recruits. Reddick & Coggburn (2008) affirms that there exist multiple methods of determining the success of a company, including the profits made in a financial year, the excellent ideas launched, and the corporate social responsibility or service to the industry. But possibly the ultimate among these is the effect the company has on the lives of personnel. Outside tangible prizes like salary, and intangibles like mentoring, a company can influence an employee’s life by offering a substantial package of workers benefits (Reddick & Coggburn, 2008). Many companies recognize the influence they have on the employees experience and lives is one of the best fulfilling features of the company. Some of the standard employee benefits include life insurance cover, health insurance, disability insurance, educational assistance, maternity leave, and retirement benefits, paid days off, sick pay, holidays and vacations. With the designing of employee’s benefits plan, the company might decide to either offer a general package to all employees or allow employees to choose inside established benefits. This paper tries to explain the internal and external considerations that a company must make while planning for employee benefits package.
Internal factors or considerations and the company’s needs or requirements are either envisaged as strengths or weaknesses. According to (McCaffery, 1988) these factors include finances as the major factor, educational background of the workers, skills, physical abilities (relevant to the job) and finally the experience.
To start with, for a company to offer the best employee benefits package, cautious planning on finances must be done. Most employee benefits are expensive to manage, and the costs would even be higher with the growth and expansion of a company as an internal factor (McCaffery, 1988). Moreover, it is hard to take away the benefits package in case of an economic crisis. Therefore, the financial position of a company will determine the outcome of the employee’s benefits package. While designing a benefits plan, the company ought to consider retaining its employees and also create a fairness image to its workers.
In regards to the educational background of an employee, some workers have a more robust educational background compared to others. Educational background is an important factor to consider when planning for the workers benefits as they are not equal, and some might deserve more than others. However, it is critical for the company to be care while giving these benefits as some workers would feel demoralized upon realizing that they are not equally rewarded.
It is true that some workers are more skilled and talented than others. When designing the employee benefits package, it is important to consider this fact. The skilled employees translate to more quality output and profits for the company and hence their efforts must be equal appreciated. Moreover, the skilled workers are the face and the engine running the company. Therefore, it is equally important to reward them accordingly so as to maintain the company’s brand and if anything improves it.
Some employees are more endowed with some physical abilities like height and might that are relevant to some jobs. For example, in the security industry, people with good height and stamina are considered more than the short and weak. Therefore, it is important to consider such physical abilities and their advantage to the company when designing the employee’s benefits. A bouncer in a club, for example, must be strong enough to handle loudly and violent clients.
These are the factors which the company has no control of but could impact the benefits package. In business strategy, they are viewed as the outside threats and opportunities. They include the government policies and regulations, labour markets and the competitive economic environment (McCaffery, 1988).
Similar companies must be considered when designing the employee’s benefits package because competition is for the parallel labour market. Same companies a very critical consideration as the employees are always looking for greener pastures, and similar companies could be a big threat to the skilled labour. Therefore, the company must always stay ahead of the competition at all times. Companies must strive towards providing the best employee benefits, there is in the job market to maintain the skilled workers and recruit the top cream in the industry (McCaffery, 1988). That said when a company is famous for giving good benefits to its workers; it is normally easier to recruit brilliant employees and the marketing and sales side gives positive results.
Government policies on employee benefits must also be deliberated as they set recommendations for essential or forbidden business practices. According to Reddick and Coggburn (2008), for a company to be in good terms with the government and the society, in general, it must remain within confides of the law. Most United States laws on business and employment originated from the economic environments that triumphed before the 1930s. These laws have several devotions like the provision of income upkeep during times of joblessness, expansion of employment, the reasonable compensation of workers in regards to economic times and promotion of workers collective bargaining. Examples of United States federal wage and hour laws include; social security act, Civil Rights and Equal Pay Act, Fair Labour Standards, Federal Unemployment Act, Workers Compensation and Employment Retirement Income Security Act (ERISA) (Reddick and Coggburn, 2008). The federal government acts are highpoints rules that companies must follow when designing compensation package for their workers. Moreover, many other policies by the government ensure fair competition by companies and favourable working conditions for the employees.
Finally, a company’s overall compensation strategy must assist to entice, retain and inspire the workers (Beam and McFadden, 1998). Although the salary remains the biggest component, employee benefits are equally important for the survival of a business. The companies working environment and its employee benefits package may be the change amid having an active and robust workforce of discontented staff that you are always switching. Above all, the employees are usually regarded as the ultimate resource a company has. Beam and McFadden (1998) argue that the company’s executive should prioritise the satisfaction of the staff within the working environment, pay and other benefits. Moreover, there exist benefits that will not cost the company a single cent. They include; involving the employees in decision making, offering meaningful work, facilitating study leaves, complimenting workers when they have done an excellent job and providing some flexibility to workers in case they want to attend to something important or emergencies. That said, the ultimate objective of a company is to achieve success with the help of its workers. Therefore, it would be significant to consider the general welfare of the employees.
Beam, B. T., & McFadden, J. J. (1998). Employee benefits. Chicago, Ill: Dearborn Financial Pub.
McCaffery, R. M. (1988). Employee benefit programs: A total compensation perspective. Boston, Mass: PWS-KENT Pub. Co.
Reddick, C. G., & Coggburn, J. D. (2008). Handbook of employee benefits and administration. Boca Raton: CRC Press.