Gone are the days when employers just offered a salary to potential employees. Employee benefit packages are emerging as an incentive to attract and retain good staff without huge additional cost.
Internationally it is very much the norm to offer multiple benefits over and above the salary and that trend is starting to develop locally.
In tighter economic times, business owners often find it difficult to recruit experienced, well-trained staff, particularly in the large trading and manufacturing sector, as well as in the highly competitive corporate world. Recruitment costs are high, and employers also need to be mindful of what the competition is offering a potential employee.
The traditional employers of the ’80s and ’90s have become employers who are mindful of their staff’s welfare, long-term.
They’re putting together comprehensive and attractive employee benefits packages to protect their staff and their families. It is about providing a greater overall benefit than would be possible if it was just a cash remuneration package. It’s very much a win-win arrangement.
These benefits provide a significant incentive to remain in their current employment rather than opting to go to another employer who doesn’t provide these benefits. The employer is retaining staff and not having to face the high costs involved with recruitment. Essentially, an employee benefits package is a great tool to achieve favourable outcomes for everyone.
An Employee Benefits Package can include registering the employee in the KiwiSaver Scheme, making them a member of the business’s group life insurance plan, so they get life, trauma, income protection and medical insurance as part of their total remuneration package.
These packages are a great enticement for potential employees and their families, too. The benefits on offer are sometimes ones which an employee would not have normally considered arranging for themselves, simply because they’re unable to fund it. Benefits can be fully or partially subsidised by an employer. They provide family security and they foster respect for the employer who is taking care of their staff.
Many job-seekers don’t realise that under group insurance schemes, pre-existing conditions are normally covered. Cover may be available to staff who would not have been able to get personal cover.
While it is a cost for an employer to put Group Cover in place for their staff, they’re reducing the costs they incur from high staff turnover, such as paying a recruitment agency and other administrative costs associated with someone leaving and their having to rehire.
There’s usually a reduction in time taken off work by employees, because they can seek treatment more rapidly through the private health sector – they’re getting back to work sooner. Again, that’s saving money for the business owner.
Employee benefits packages attract new staff and noticeably boost staff retention. To be seen to be looking after one’s staff is a big plus in this day and age.
It also covers any moral obligation a business owner may have should a serious accident and injury – or death – happen in the course of a staff member’s work.
We had the unfortunate experience of the death of a young fitter-turner while employed at an engineering company. His wife had not known her husband’s employer had taken out a Group Life policy for all the staff – more than 50 people. The scheme was designed to provide for the cost of a funeral and to cover other final expenses, but more importantly, it was designed to provide the surviving family members with additional financial support at a very difficult time. This young man’s widow was left with three young children, so she was obviously immensely grateful for the financial support she received.
In this business, the Group Cover scheme is fully subsidised by the company. The other employees saw, firsthand, its benefits – in fact, there have been four cases in this one business when the Group Cover Scheme has been called on, and that naturally generates gratitude for a generous employer who is fully funding the scheme. In turn, the recruitment and staff retention benefits are the employer’s reward – in the long run, their financial losses are reduced.
