Way, way back in the day, all a worker cared about was whether a company was offering him a decent salary or not. In the modern world however, a respectable salary isn’t enough to retain valuable employees over the long term. And that is why companies began offering benefits. We investigate why companies are keen on offering benefits.
It ensures employee’s loyalty
Most companies offer their employees’ salaries that are at par with the industry standard. What this essentially means is that an employee gets basically the same pay whether he works for your company or someone else’s. However, most companies spend quite a bit of time and resources on training employees, sometimes even entrusting with trade secrets. To ensure that an employee doesn’t simply join another company, or heaven forbid a rival, companies offer benefits like health insurance, group life insurance, paid vacations etc.
It is an added incentive
Incentive programs for employees are an important part of running a business. Benefits allow companies to tell their employees that they value them even if they aren’t able to pay them the most competitive salary. This is where a lucrative benefits package is able to ensure that employees feel taken care of by their employers.
To stay competitive
Even if job market in a country is marred by high unemployment, every company is always on the lookout for good employees that can add value to their firm. These high value workers are the prime target for poachers and scouts since their particular skill set can earn their employers a lot of money. To retain prized employees and to make an open position more lucrative, companies offer benefits in addition to a lucrative salary package.
In some parts of the world, the law requires companies to offer its employees benefits like pension, maternity leave and even family and group insurance to ensure that workers aren’t exploited.