“The Decade of the Pandemic” is how this decade would be described.
We saw three pandemics heading our way – from the Covid-19 pandemic to the Great Resignation and now the wave of layoffs. These have brought a new change to the business environment. HR managers and recruiters were the worst affected.
First, they had to develop new strategies to hire fresh talent and then improve employee engagement.
But is there a more effective way to do so? The answer lies in a simple employee benefit plan serving the needs of every employee group.
Around 51% of employees believe benefits are crucial to talent retention. So, this depicts the positive impact it brings along.
But what is an employee benefits package?
An employee benefits package refers to the collection of non-wage compensation and benefits that an employer offers to employees in addition to their salaries. It includes benefits like health insurance, retirement plans, paid time off, sick leave, etc.
Let us dive deeper to know how HRs can design benefits packages that stand true to the test of time!
Why offer Employee Benefits Program?
A good employee benefits package and a positive employee experience are related. They serve many purposes few of which are,
- Attracting and retaining talent: Offering a competitive package helps attract and retain talent, and candidates may choose to work for companies that offer more comprehensive benefits packages.
- Boosting employee morale: Employees who feel valued and appreciated by their employer are more likely to be motivated, productive, and engaged. It is a beautiful way to show that the company cares about the well-being of its employees.
- Reducing turnover: A comprehensive benefits package can help reduce turnover by providing employees with financial security and benefits like paid time off and flexible work arrangements.
- Improving employee health and wellness: These benefits can help employees stay healthy and lower healthcare costs for both employer and employee.
- Legal Compliance: Indian law mandates certain benefits employers must offer, such as employee insurance, leave entitlements, etc. Failing to comply with these requirements can result in legal penalties and damage to the company’s reputation.
HR’s Contribution to Benefits Plan
Employee benefits packages offer many advantages, but creating a package that satisfies the needs of both the employer and employees is challenging.
Then who takes up this challenging task and aces it?
The answer is HR professionals. Unsurprisingly, an HR professional spends an average of 20 hours per month managing benefits-related tasks like designing and administering the packages, states an SHRM (Society for Human Resource Management) study.
So, they are critical in creating employee benefits packages that attract and retain talent. They help in:
- Conducting Needs Assessment: HR managers collect and analyze data on demographics, lifestyle, and workforce trends. With the help of this data, they can understand employees’ needs, which makes it easier to design a comprehensive benefits package for every employee’s needs.
- Market and Industry Research: HR professionals thoroughly research industry trends to develop the most attractive, cost-effective, and competitive benefits package.
- Cost Analysis: They conduct a cost-benefit analysis to determine the benefits package’s return on investment (ROI). This helps in evaluating the cost of each benefit and assessing its impact on the organization’s bottom line.
- Communication and Enrollment: They communicate the benefits packages to employees, also providing enrollment assistance. They also educate employees on the benefits available and how to access them.
- Administration and Compliance: HR managers manage the day-to-day administration of the package, along with compliance with regulatory requirements like Employee Retirement Income Security Act (ERISA), Consolidated Omnibus Budget Reconciliation Act (COBRA), and Health Insurance Portability and Accountability Act of 1996 (HIPAA).
- Evaluation and Feedback: They monitor employee satisfaction with the benefits package and make necessary changes when needed.
HRs are an indispensable part of compensation and benefits management and one of the key drivers, but does their work end with creating an efficient package, or is there more?
Implementation and Communication of Benefits Packages
HR executives of Seattle Inc. designed one of the best employee benefits packages personalized for every group, and as per the current market needs. HRs were pleased and satisfied.
But things took a turn when they started losing many of the top performers to their competitors. So, the HRs began to ramp up recruiting. Even then, they could not compensate for the lost talent.
Alarmed, the HR head gathered a team and analyzed the situation. The results shed light on a very shocking problem.
Most of the top talent left the organization owing to the promising benefits package of the competitor. But in theory, Seattle Inc. had a better package. So then, what was the problem?
The answer is a weak communication system and a bad implementation plan. So, creating an employee benefits package will give you the desired results only when you communicate them effectively, backed by an efficient implementation plan.
How does it help?
- Employee Awareness: Clear communication helps employees understand the value of their total compensation package and enables them to make informed decisions regarding their benefits.
- Employee Engagement: This can play a significant role in engaging employees and fostering a sense of loyalty and commitment to the organization.
- Resource Optimization: Efficient implementation of employee benefits ensures that the organization optimizes its resources by avoiding duplication of efforts and minimizing administrative costs.
- Competitive Advantage: It can also provide an organization with a competitive advantage by differentiating it from other employers in the job market.
Is it a smooth sail?
No, this process is not a smooth sail as there are many roadblocks to it, like:
- Lack of awareness: Many employees do not understand the benefits packages offered by their employers or are unaware of the benefits available. This lack of awareness is due to inadequate communication and education about the package.
- Limited access to information: Many employees does not have access to information about the packages, especially blue-collar workers. And most of the time, the information is provided in English, which is another barrier.
- Limited Customization: Indian industries often follow the one-size-fits-all approach; this may not work for all employees and may not meet their needs.
- Lack of trust: In India, there is often a need for more trust between employers and employees. Employees are skeptical of the benefits and consider them ploys to attract new employees without actual implementation.
- Inadequate communication channels: The communication channels may only reach some employees, requiring others to be made aware. For this, employers need a variety of media to communicate with all employees.
- Lack of Government support: According to a survey by Ekincare, 40% of employers do not provide a benefits package to their non-traditional employees, like the part-time workers. This is often due to the lack of a comprehensive benefits policy designed by the government.
Is there a way out
Communicating and implementing employee benefits packages effectively can be challenging due to the country’s cultural, linguistic, and geographical diversity. The following ways can help overcome the challenges discussed above:
- Personalized communication: Email or one-on-one meetings ensure employees feel valued and their questions and concerns are addressed.
- Offering education and training: This will help employees understand the benefits package and how to use it effectively. This could include seminars or workshops on financial planning or mental health.
- Be transparent: About the cost of the benefits and how they are funded. This can help build trust with employees and reduce confusion about their benefits package.
- Leverage technology: Use technology to make information accessible to employees. This could include an online portal or mobile app where employees can access their benefits information, check their balances, and submit claims.
- Feedback system: Regularly solicit employee feedback about their benefits package to ensure it meets their needs and expectations. Use this to make necessary changes.
Making a Case for Employee Benefits to CEO
An HR manager might think that just designing an effective benefits plan, preparing a roadmap for its proper implementation, and communicating it to employees will be enough. But it is not the case, as all this challenging work will only reap positive benefits if the top management sees its impact on the organization.
So how do you convince the CEO to implement the proposed plan?
Is it through the financial benefits the plan brings or the profitability it offers? The answer is a perfect blend of all these factors. To prepare the perfect presentation, follow these steps:
- Research the company’s needs: Before pitching the plan, research. First, analyze the business landscape, the key challenges, and the measures taken to address them. Then understand the current needs and predict the future needs. Finally, design the benefits package.
- Know the C-suite Executive: Understand the CEO’s priorities, goals, and concerns regarding employee benefits. This helps create a plan that satisfies the CEO’s needs and gets easy approval. Pitching a strategy that appeals to the company’s values and employees’ needs can be a way.
- Provide cost estimates: Support your argument with financial data, the budget needed and its impact on the organization. Show the profitable result of increased employee productivity to the organization.
- Anticipate objections: Mentally preparing oneself for the potential objectives due to budget constraints or employee dissatisfaction. Preparing a counterargument for the objections beforehand makes the case stronger.
- Provide data to support your proposal: Using data and analytics to support the proposal. With this, the practical results of the plan can be shown to the CEO. In addition, taking the help of ROI data and employee engagement metrics will provide additional support to the case.
- Use real-life examples: Provide additional examples of how the proposed employee benefits package has worked for other companies. They can include case studies, testimonials, or benchmarking data.
- Offer a pilot program: If the CEO still needs to be convinced, propose a pilot plan, and run it while recording the results. If the plan yields positive results, make it permanent, and if it does not deliver desired results, then learn from the mistakes.
Employee Benefits Packages
An employee benefits package in India typically includes countless benefits, a few of which are mandated by law. At the same time, others are optional and provided to attract and retain top talent. They also vary depending on the industry, company size, and location.
A few examples of the employee benefits packages offered, and their tax benefits are:
- Provident Fund (PF): Contributions to Provident Fund by the employer and employee are eligible for tax deductions under Section 80C of Income Tax Act, 1961.
- Insurance: Employers offer medical insurance to employees, and the employer can claim tax deductions under Section 80D of the Income Tax Act, 1961.
- Gratuity: It is a lump sum amount paid to an employee as a token of gratitude. It is tax-exempt up to a certain amount.
- Employee Stock Options (ESOPs): They are a reward to employees and their tax treatment depends on the type and duration of the shares.
- Leave Travel Allowance (LTA): Employers cover the cost of travel expenses incurred during the employees’ leave period. It is tax-exempt in a block of four years as stated under Section 10(5) of the Income Tax Act, 1961.
But do these stand true to the changing times? Well, the answer may be a ‘NO.’
So, why is there a shift in the narrative?
The covid-19 pandemic has transformed how we work and undoubtedly accelerated the adoption of remote work and digital technologies. As a result, the future of work will require an innovative approach to the employee benefits package.
As the world changes, is there a better way to transform how companies offer employee benefit packages? Yes, there is.
Here are a few benefits packages designed for the future of work:
- Investing in Employee Wellness In addition to traditional health insurance, employers could offer telemedicine services, mental health counseling, wellness programs and fitness memberships. These benefits can help employees manage their physical and psychological health, reduce stress, and improve overall well-being.
- Breaking 9-to-5 Mold Employers could continue offering flexible work arrangements such as hybrid, part-time, and job sharing. These can help employees achieve a better work-life balance, reduce commute time, and increase productivity.
- Climbing Career Ladder Including tuition reimbursement, professional development courses, and mentorship programs as a part of the employee benefits program. This can help employees acquire new skills, stay competitive in their field, and feel valued by their employers.
- Supporting Working Parents Employers could provide childcare benefits such as on-site daycare, subsidies for daycare or babysitting services, and flexible work arrangements that accommodate childcare needs. These can help employees feel supported in their role as a parent, reduce stress, and improve work productivity.
- Celebrating Diversity, Equity, and Inclusion Employers could implement diversity, equity, and inclusion initiatives such as training programs, recruitment, and employee resource groups. These initiatives can help employees feel valued and supported, increase workplace diversity, and improve company culture.
- Top-of-the-Line Technology and Equipment Remote employees require access to technology and equipment, such as laptops, monitors, and high-speed internet. This can help employees feel supported in their remote work, increase productivity, and reduce the burden on employees to provide their equipment.
Wrapping it Up
A comprehensive benefits package is a win-win for the company and its employees. A well-designed benefits plan can positively impact the company’s workforce by attracting and retaining top talent, improving productivity, and providing tax benefits.
We at Keka take this very seriously, as our value proposition centers on providing a user-friendly, intuitive platform that streamlines HR processes for employees.
We offer a wide range of features like remote clock-in, making it easier for remote and on-site workers to clock in with ease.
In addition, we have seamless integration with PF and income tax portals, making tax declarations easier and less burdensome. Keka is designed to be user-friendly and intuitive, making it easy for employees to navigate and use, contributing to a positive employee experience (EX).
With all these and many other features, Keka aces the employee benefits strategy. It not only has an amazing set of employee benefits packages, but also effectively communicates it to the employees, along with offering similar technological support to other businesses.
So, try it, and witness all these in live action with a free demo