One is get used to think of rewards as tangible things, while a business owner can provide such intangible benefits as insurance cover, vacation leaves and etc. The more generous the employee benefits are, the more attractive the position is. A generous plan may also help in keeping talent that the company already has or invite cream of the crops. The employee benefits plan varies from a small company to the big one, however, represents the fundamental importance for both of them. The employee benefits plan often serves as one of the measures of the employer’s success, thus it makes it highly important for middle and big businesses. It is also vital that some employee benefits may be seen as a part of corporate social responsibility program. Many employers acknowledge the importance of considering a huge massive of internal and external information to compose such an employee benefits plan that can satisfy both sides and make the organization competitive in the labor market (“How to Build a Competitive Employee Benefits Package,” 2010).
The most fundamental information that is needed for the employee benefits planning process can be divided into internal and external one. They are very interrelated as one has a significant impact on another. The internal information may include the number of employees, the burden of taxes, the extent of their work and their profitability. Some employers believe that “there are certain benefits good employees feel they must have” (“The Basics of Employee Benefits,” n.d.), so such preferences should be also taken into account. In addition, the amount of days off and leaves offered to one employee may hinder the performance of the entire department, so such expenses should also be assessed. Moreover, with the rise of freelance services and outsourcing, the company may also analyze the degree to which a certain employee or a certain position is required for the successful performance of the company. With less people demanding benefits, their quality may improve. The company should consider the statutory information and the principles on which it works. It may have direct impact on the social construct of the organizational culture.
The external sources of information for the employee benefits planning process are more complex and vary by a few categories. As employees expect different kinds of benefits to be provided to them by the employer, the organization should refer to both legal and social practices of providing employees with benefits. The legal issues include special rules, laws and regulations that determine the rights of employees at work. The company should be aware of its responsibilities and obligations towards the labor force it hires. The social part may include insurance, health benefits, retirement plans, and public-sector benefits among others. They often are considered as required employee benefits and derogation from these well-established patterns may lead to a significant decline in motivation and even in the performance of the entire company.
Social security that the employer may offer can become a final deciding factor of a potential employee. The information regarding social security paid for every employee by the employer is available at the sites of the Social Security Administration. Other issues about unemployment insurance and working compensation are optional for certain groups of employers, but constitute a significant benefit to their image. Disability insurance that covers in part expenses which resulted from non-work related sickness or injury is also obligatory for certain states. Family and Medical Leave have been recently very popular subjects of discussion, with their minimum limits being legally established. However, the companies are encouraged to set their own standards with regard to family and health issues (“Required Employee Benefits,” n.d.). There are also other benefits that should be taken into account such as educational assistance benefits or another of similar character. They may be costly, but very effective for the improvement of the employee’s productivity. In this case, the company may opt for provision of such benefits to certain groups of employees (“EBRI’s Fundamentals of Employee Benefit Programs – 6th Edition,” 2009).
In my opinion, both internal and external factors that influence he employee benefits planning process are equally important. The company should estimate its costs and benefits from introducing one or another kind of benefit and offering it to its employees. At the same time, it should be aware of the commonly established practices of provision of employees with certain benefits. External sources of information and requirements may seem more crucial for the company as they are often related to legal issues and labor unions. Negligence or lack of attention to them may turn into a complete disaster for the company. However, the internal information provides necessary insight on the company’s financial situation and opportunities that it may offer to its employees. Its profitability may allow making conclusions about kinds of benefits its employees will get.
EBRI’s Fundamentals of Employee Benefit Programs – 6th Edition. (2009). EBRI. Retrieved from https://www.ebri.org/publications/books/?fa=fundamentals
How to Build a Competitive Employee Benefits Package. (2010). Inc. Retrieved from http://www.inc.com/guides/2010/04/offering-competitive-employee-benefits.html
The Basics of Employee Benefits. (n.d.). Entrepreneur. Retrieved from https://www.entrepreneur.com/article/80158