As a business grows and begins to hire more people, one question would eventually arise among the employer: "Are employee benefits really necessary? Must we do it?"
Without a doubt — for businesses that want to stay competitive — the answer, in my opinion, is a firm yes.
I believe benefits are a must-have today for any company that is serious about attracting, keeping and motivating their top talent.
I'll get into my exact rationale.
In my role, I work with both sides: the employers who are designing employee benefits and the talented employees who receive them. I hope that my experiences, while unique, can provide a fresh perspective that may be of value to you.
Wei Chong, CFP
Why benefits are more important than salary
When it comes to compensation, many people immediately only think of salary.
However, a growing body of research (though they were not done on Malaysians) suggests that benefits can be even more important than salary in the eyes of employees.
That said, I actually have encountered similar sentiments in Malaysia.
For instance, I personally have come across individual financial planning clients (who are valuable assets to their companies) who won't leave their employer due to specific employee benefits.
The reason could be a higher-than-usual EPF contribution percentage, or a comprehensive insurance plan, or a month's worth of guaranteed bonus, etc.
Helpful benefits such as medical insurance, life insurance, and retirement benefits (e.g. additional EPF or PRS contribution) provide a sense of security that a salary alone cannot offer.
They show employees that their employer cares about their well-being, not just their output.
Financial values of benefits
Moreover, benefits can also have a significant financial value.
For example, a comprehensive health insurance plan could potentially save an employee thousands of Ringgit in a single year, particularly during a period of poor health.
The hidden value of group insurance
Also worth noting — some employees can't get personal medical insurance for various reasons. Hence, they will only consider companies that provide the coverage for them.
(This is more common than you might think!
For instance, a past injury that has healed could still cause insurers to reject an individual's insurance application.)
Some employees know that group insurance through their company is less expensive than individual policies.
They also get to avoid medical check-ups this way. So they highly value these company-provided benefits.
Beyond insurance: Other benefits
The economies-of-scale principle also applies to other non-insurance benefits.
Companies can negotiate lower rates for services like gym memberships or educational courses when buying for a group.
When you factor all these in, the total compensation package often exceed the value of the salary alone.
But there's more to it than just the financial aspect.
A smaller firm's secret weapon for talent
In the wake of the pandemic, many professionals are rethinking their work-life balance.
Burnout and stress have taken a toll...
Health, rest, and family time have become priorities!
Yet, the thought of losing corporate benefits often puts a stop to their plans to move to smaller, less stressful workplaces.
But here lies an opportunity for your company!
While you may not be able to match the full range of big corporate benefits, the beauty of it is you don't even need to...!
By offering key benefits, such as life and medical insurances, you can attract those seeking change.
Flexible work hours, remote work options and other valuable benefits can also sweeten the deal.
In this new era, smaller firms can redefine competitive benefits. They can focus on what matters most to employees.
This strategy can draw in experienced individuals seeking better work-life balance. Benefits can become your secret weapon this way, allowing your company to also compete for top-tier talent.
An impactful statement of your company culture
Benefits have the power to shape the company culture in a way that salary cannot.
Think about it — they communicate:
- what values are important to an employer,
- the specific areas of life an employer is happy to support their employees in,
- and the kind of individuals they wish to welcome into their workplace.
There's an awful lot your employee benefits package can say!
Even if your competitors are not doing much on the employee benefits front (and you feel like you might as well follow suit), think about how shaping and communicating clearly your culture can help you attract and keep people who are the right fit.
Why employee is important for organisations
You did not need me to tell you why, but in case you needed a refresher:
Employees are the lifeblood of any business. They are the ones who interact with customers, create products, provide services, and drive innovation.
Without employees, a company simply cannot function.
But employees are not just cogs in a machine. They are individuals with their own needs, desires, and aspirations.
By providing benefits, you can show your people that they are valued and appreciated.
This, in turn, can lead to increased job satisfaction, loyalty, and productivity.
The impact of employee benefits on performance
So, why is employee performance important? The answer is simple: the performance of your employees directly impacts the success of your business.
High-performing employees can help your company achieve its goals, stay ahead of the competition, and drive growth.
Employee benefits play a crucial role in enhancing performance.
Benefits such as flexible working hours, professional training opportunities, and even wellness programs can help your employees maintain a healthy work-life balance, improve their skills, and stay motivated.
When employees feel that their employer cares about their well-being and professional growth, they are more likely to be engaged and committed to their work.
This, naturally, results in higher productivity, better customer service, and ultimately, improved business outcomes for your company!
Conclusion: The Necessity of Employee Benefits
Employee benefits are not just a nice-to-have; they are a necessity in today's competitive business environment.
They are more important and "useful" than salary in many respects.
They tangibly show your employees that they are valued, and they can significantly enhance employee performance.
They are also a reflection of your company's culture and values so, in a sense, they can define who you are as an employer.
If you need help designing an employee benefits insurance package that meets the needs of your workforce and aligns with your business goals, don't hesitate to get in touch with my team.
Your employees — and your bottom line — will thank you.