A large part of a business depends on employees. For one, employees determine the productivity and profitability of a business.
While creating or modifying your benefits package, you may want to consider which benefits are more attractive to new employees.
Why Invest in Benefits?
Benefits refer to additional compensation in the form of services, allowances, or anything similar that companies give to employees as an added advantage. Common benefits packages include healthcare and life insurance, paid vacation and sick leaves, and flexible hours or work-from-home schemes.
According to a study by job search engine and company review site Glassdoor, almost two-thirds of job seekers would choose a lower-paying job if it means getting better benefits.
But What’s in It For the Employer?
Companies may use benefits as a way of taking care of employees’ well-being. It is not surprising that one of the more popular benefits on the market is healthcare.
With great benefits also come improved employee morale and lower employee turnover rates. Employees who are considering changing jobs often look for a position or company with better benefits.
Employees also become more productive when the company exerts effort in caring for them. And, well, great benefits make for a great company profile.
Some companies that are popular for their great benefits include (1) Google, which offers travel insurance, free lunches made by in-house chefs, and free legal advice, (2) Rubicon, which generously offers a six-month unpaid sabbatical, and (3) Taco Bell, which surprisingly offers great training programs and tuition assistance.
Building a comprehensive benefits package may become confusing as more and more options are now available on the market. Knowing which benefits matter to your employees and what kinds are available to you may be a good place to start.
A study showed that job seekers value benefits such as health insurance, flexible work arrangements, and vacation time the most, and would go for a lower-paying job with these benefits compared to a higher-paying one without them.
Taking care of employees’ health is a great way of showing that the company cares about them. There are many ways to make sure that employees have access to healthcare when they need it.
1. Health Maintenance Organization (HMO)
A common choice for health insurance is health maintenance organizations.
An HMO offers doctors, hospitals, and other medical care providers a contract and pays them a fixed fee in exchange for medical services for HMO subscribers.
HMOs allow employees to choose a primary care physician (PCP) in their network of doctors. The PCP will be the main healthcare provider for the employee and will be the one to make recommendations if ever the employee needs access to specialists.
For this type of benefit, employees may pay a small fee known as a copayment for a consultation, medical test, procedure, or confinement, then the HMO will cover the rest of the cost.
Some special cases such as emergency care from out-of-network doctors or hospitals may be covered as well.
Companies that choose this option must pay a premium every month or year. Employers may also offer to extend the HMO coverage to the employee’s immediate family for an additional fee.
2. Preferred Provider Organization (PPO)
A preferred provider organization allows employees to choose from a network of doctors, hospitals, and healthcare providers which PPOs refer to as preferred providers.
Doctors and hospitals charge a reduced rate based on their negotiations with the PPO. Employees have more options and may also choose to consult with specialists outside the network for a higher fee.
This type of plan may cost employees more, depending on the premium paid by the company. Premiums for PPOs are also very expensive since they’re harder to manage.
A point-of-service plan mixes the features of HMOs and PPOs. A primary physician attends to an employee and may recommend them to a specialist outside the network.
Most point-of-service plans reimburse part of the employee’s fees for out-of-network care. Many small businesses prefer this plan as it’s much cheaper than most options.
When choosing a healthcare plan, check your budget, and do some research. Some plans are better for certain kinds of employees.
If your employees tend to move around more, plans that provide more flexibility, such as PPOs, may fit your employees’ needs better. Otherwise, you may opt for cheaper options such as HMOs and point-of-service plans.
Flexible Work Arrangements
Companies may also opt to grant employees more control over their time. Flexible work arrangements allow employees to work outside of the more traditional nine-to-five schedule.
This type of work arrangement gives the employee the liberty to choose their own starting and quitting times within a limit set by the management. Flextime allows employees to manage their schedules and attend to personal commitments without worrying about work.
Flextime is best suited for employees whose work is mostly output-based and does not involve frequent team collaboration.
2. Compressed workweeks
In a compressed workweek, employees complete the required work hours in fewer days. A popular schedule is the 40-hour 4-day work week, which would mean that the employee needs to work for 10 hours every day for, say, Tuesday until Friday.
This may be attractive to people who have longer commutes and would prefer longer shifts to more workdays. Working parents can also save on childcare costs as the more days in the weekend would mean fewer days for their kids in daycare centers.
Work-from-home setups have become more popular lately, mainly due to the wider access to technology.
Telecommuting allows employees to work from the comforts of their home, provided that they have a good internet connection and the necessary devices to fulfill their tasks.
Employees with this benefit may come in one to two days a week to attend meetings and connect with colleagues.
For telecommuting to be successful, the employee should be self-driven and a high achiever with technological savvy, while their manager should have trust in their employee and comfortable with not having direct control over the employee’s work.
Paid and Unpaid Leaves
Another great benefit for employees of different levels is paid leaves. A company may provide leaves for different purposes and with different limits.
A few companies, such as Kronos and Netflix, go as far as establishing an unlimited vacation policy, in which employees can take an unlimited number of paid leaves in a year.
If your company can’t invest in such a high-risk benefit, there are other paid and unpaid leaves that you can still offer to your employees.
For most of the countries around the world, the law mandates that companies have to offer paid parental leaves to employees with children. Actually, only two countries in the world don’t require paid leaves for new parents, and they are Papua New Guinea and the U.S.
Offering maternal and paternal leaves may allow a company to get potential employees from pools of people who would rather focus on their family.
Another popular way that we can provide employees with vacation days is by offering accrued time off. This means that an employee’s paid leaves will increase together with the time they spend in the company.