Whether a company compensates its employees appropriately and fairly is not just a matter of an employee's salary. Employee benefits are also part of the compensation discussion. Employees can have high salaries, yet still be undercompensated. Benefits are an area where the company can demonstrate its commitment to its employees by investing in them. While most people tend to think of employee benefits in terms of the health insurance that they obtain through their jobs, the truth is that benefits is a broad term that can encompass nearly everything that an employer can provide to an employee. Many of these benefits involve some sort of financial arrangement. However, some benefits can take on a non-financial form by making an employee's work experience easier or by providing more flexibility. In fact, the more creative and expansive that a company can be in terms of the benefits that it provides, the more likely it is to engender loyalty among its employees. This will improve a company's efforts in the critical areas of recruitment and retention.
This is the most common form of employee benefit that a company gives. In fact, the law requires companies with more than 50 employees to offer those employees health insurance. There are many different plan options that employers can offer. Typically, when employees have better health insurance, they are incentivized to take advantage of their medical care and pay more attention to their health. This increases worker productivity and minimizes time lost to sick days.
While the days of a generous corporate pension awaiting employees upon retirement are largely over, companies can still help fund their employees' retirement. While some companies still do offer some form of pensions, most companies today fund the employee's retirement through their individual retirement accounts. Employees can contribute their pre-tax dollars to their retirement accounts and many companies will offer to match the employee's contribution up to a certain amount. Having their own retirement account allows employees to take control of their retirement savings and financial planning.
There are many other different types of insurance that companies can give employees as a benefit. Many companies will either fully fund or subsidize their employees' life insurance policies. In addition, companies will offer both vision and dental insurance. One benefit that many companies will also offer is disability insurance if their employees have a long-term illness or injury that prevents them from working. If an employee has a long-term illness, they can receive a certain percentage of their salary as a disability insurance payment. There are both short and long-term disability insurance policies available that companies may offer their employees.
Any type of benefit or perk that is a non-cash payment can be considered to be a fringe benefit. These could take on a wide variety of forms and companies have been starting to get creative in the fringe benefits that they offer in order to attract employees. For example, companies can pay for employees' tuition should they wish to take further classes in their personal time. Alternatively, another fringe benefit could be providing employees with child care. Fringe benefits could be something as simple as offering the employee a flexible work arrangement. For example, alternate work schedules have been gaining popularity in recent years. This is where a company allows the employee to work a flexible schedule in order to have days off every so often. Another type of fringe benefit is the company either having a gym at work or subsidizing an employee's fitness membership.
Although it is something that is often accepted as a given, an employee's vacation time is considered to be an employee benefit. There are several different types of leave that employees receive as a benefit. The first, and most obvious is their vacation days, which generally range from two to four weeks each year as the employee earns it. Sick leave is also an employee benefit. Finally, a company may offer employee leave for various other types of occurrences such as bereavement, adoption and maternity or paternity. Companies that are more generous in this area help themselves in the key areas of recruitment and retention.
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