Many companies provide benefits to their employees, and many employees take them for granted. Yet, if your company is small and your budget is low, you might question whether employee perks are actually worth the expense.
The quick response? Employee benefits are indeed important. The greatest employees are easier to find and maintain, and happier and more productive employees are ultimately better for business growth.
What are Employee Benefits?
The non-wage remuneration offered to employees by a company in addition to their regular pay or wages is known as employee benefits.
Group insurance (health, dental, life, etc.), retirement benefits, student loans, other loans (home loan, car loan, etc.), sick days, vacation days, and flexible alternative arrangements are a few examples of these perks.
The most significant asset in a company is its employees, thus it’s crucial for it to comprehend their wants and enhance their engagement and satisfaction. Employee benefits can improve performance and show your employees that you value them when you offer them.
A crucial signal for allowing employees the flexibility to work at the hours most suitable to them is the rapid globalization and firms’ tremendous expansion not only in the countries where they are established but also throughout the globe.
Why are employee benefits important?
The value of employee perks to a company cannot be overstated. Providing your benefits demonstrates to your staff your concern for their wellbeing and future. They are important for employee happiness and general wellbeing. Employee benefits are important for the following reasons:
Attracting and retaining talent:
Benefits such as health insurance, retirement plans, and paid time off can make a company more attractive to job seekers and help retain current employees. Offering a competitive benefits package can also give a company an edge over competitors when it comes to recruiting top talent.
Improving employee morale and motivation:
Benefits can improve employee satisfaction and motivation by showing that the company values its employees and cares about their well-being. This can lead to increased loyalty, productivity, and job satisfaction.
Promoting work-life balance:
Benefits such as flexible work schedules, remote work options, and paid time off can help employees balance their work and personal lives, leading to less stress and burnout.
Supporting employee health and wellness:
Benefits such as health insurance, wellness programs, and gym memberships can promote healthy lifestyles and reduce healthcare costs for both employees and the company.
Employee benefits are an important investment for companies to make in their employees, as they can lead to a happier and more productive workforce.
9 Employee Benefits in India
Insurance plans (health, accidental, disability)
Every non-seasonal factory that employs ten or more people is subject to the ESI Act. The ESI Act has expanded its scope of application to include hotels, restaurants, movie theatres, educational institutions, private medical facilities, and other establishments where the state and federal governments are the proper authorities. Every employee who earns less than Rs. 21,000 is covered by the ESI Act (Indian Rupees Twenty-One Thousand only). According to the ESI Act, employers are required to contribute 4.75% of each employee’s payable earnings, while each employee is required to contribute 1.75%.
The funds will be put into a fund for employees called the Workers’ State Insurance Fund, which will be used to pay medical bills and other benefits to workers and, in some cases, their families in the event of an accident, illness, or maternity.
Holiday and leave-related provisions are primarily outlined in the FA Act and State-specific S&E Acts (for businesses and retail outlets) (for factories).
The S&E Acts specify various standards for privilege leave and earned leave, and in some States, employees may only take privilege leave after working for a specific amount of time (such as 3 months or 1 year). The S&E Statutes further envision that any unused leave may be redeemed at the time of separation from employment and for unutilized privilege/earned leave to be carried over at the end of the year (subject to a cap).
Paid Sick Leave
Normally, sick leave is not redeemable, cannot be carried forward, and has no minimum service requirements. However, in several States, like Gujarat, Andhra Pradesh, and Telangana, employees may be qualified to use their unused sick time when they are let go from their jobs.
Paid Paternity and Maternity Leave
The Maternity Benefit Amendment Act, 2017 (the Amendment Act) significantly updated antiquated maternity rules defining the necessary benefits for expectant mothers and elevated India above many developing nations.
Any business with ten or more employees must comply with the Amendment Act’s provisions. Advantages include maternity leave and facilities for working from home for nursing mothers, as well as required maternity payments for women regardless of income. New mothers have a right to 26 weeks of maternity leave after giving birth. 12 weeks of maternity benefits are available to commissioning moms (those who employed a surrogate) and adoptive mothers.
The Amendment Act does not include paternity leave; thus, it is not regarded as a required benefit. Yet, as a non-statutory benefit, certain companies may choose to offer paternity leave.
ESOPs (Employee Stock Ownership Plans) are employee benefit plans that allow employees to own a portion of the company they work for through stock ownership. ESOPs are typically used as a tool to encourage employee ownership and participation in the company’s financial success.
Under an ESOP, the company contributes shares of its stock to a trust, which holds the shares on behalf of the employees. The shares are allocated to individual employee accounts based on a formula determined by the plan. The shares in the accounts of the employees’ vest overtime and are subject to certain rules regarding their sale or transfer.
If IT and other white-collar workers work from home or use their phone for business calls, they may be eligible for a specific internet or mobile phone reimbursement. Approximately two-thirds of firms offer mobile service, and about half cover the cost of a phone.
Flexible Working Hours
Working hours, location of the job, the type of labor, and intensity (the amount of work to be done) are all new experiments to accommodate a workforce that wants and requires the flexibility to meet other obligations, like child and parental care.
A bonus is a monetary payment made to an employee in recognition of his contributions to the company. Bonuses are frequently given by employers to their employees in an effort to boost morale and raise pay. The Payment of Bonus Act requires companies to pay bonuses in addition to discretionary bonuses (“PB Act”). Every factory and establishment with 20 or more employees is subject to the PB Act. A bonus of 8.33% of the income or salary that the employee earns in an accounting year, or Rs. 100 (Indian Rupees One Hundred), whichever is higher, is due to every employee whose salary is less than Rs. 21,000 (Indian Rupees Twenty-One Thousand Only).
Due to the employee tax benefits, meal allowance is a common benefit. If the employee choose to keep receiving allowances under the previous tax system, the current tax-free ceiling is up to INR 50 per day. If an employee selects a flat deduction under the new tax law, there is no meal allowance available. Meal vouchers might be less popular in situations when an employee can offer a free cafeteria.
What type of Employee Benefits are most appreciated?
There are a variety of employee benefits that are highly appreciated by employees. Some of the most appreciated employee benefits include:
Employees highly value health insurance benefits, including medical, dental, and vision coverage, which can help them and their families access quality healthcare.
Retirement benefits, such as 401(k) plans or pensions, can help employees save for their future and provide financial security in their retirement years.
Flexible work arrangements:
Flexible work arrangements, such as remote work or flexible scheduling, can help employees maintain a better work-life balance and reduce stress.
Paid time off:
Employees appreciate having paid time off, including vacation days, sick leave, and holidays, which allows them to take time off work without sacrificing pay.
Professional development opportunities:
Many employees value professional development opportunities, such as training programs or tuition reimbursement, which can help them improve their skills and advance their careers.
Employee assistance programs:
Employee assistance programs, such as counseling services or mental health support, can help employees deal with personal or work-related issues and improve their overall well-being.
Over to You!
There are numerous other employee advantages that companies can provide. It’s important to remember, however, that the availability of these perks may vary depending on the size, location, industry, and financial constraints of the firm. They are typical throughout most companies.
You may foster a positive work environment at your firm and lower the costs associated with employee retention by providing the appropriate benefits.