Convincing employees of the “benefits” of employee benefits

Disclaimer: Please note that this article is at least 12 months old.
Any information herein was accurate when published on 5 January 2009

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The next generation of employees is proving a handful for many companies. Fiercely independent and accustomed to making their own financial decisions, their focus is on the bottom line – instant gratification – as opposed to planning for the long-term. Cindy Wilson, director of BDO Spencer Steward Employee Benefits (Gauteng), explains that proving the “benefit” and necessity of employee benefits is therefore requiring far more “selling” than it used to…

The global skills shortage is putting companies under that much more pressure when it comes to both attracting and retaining quality staff. Employee benefits, including everything from comprehensive medical aid to cell phone allowances and group life benefits, are not however, proving as attractive to the Y generation of employees as they did to the generation before. Growing up during a period of extreme consumerism and instant gratification means that many of them view tomorrow as exceptionally far away. As such, offers of a reliable pension fund and group life benefits are often seen to impact negatively on their bottom line – using valuable take home pay.

This belief is being exacerbated by many people's experiences in smaller companies where they became accustomed to taking personal financial responsibility because employee benefits were not included in their contract of employment. As such, they view larger companies' employee benefits policies as a burden rather than as a value-add.

The implications for companies in this regard are significant. While many believe that continuing to give unwilling and often ungrateful employees benefits is both impractical and time-consuming, employers have to remember that they have a duty to look after their staff. Employee benefits are a crucial means of proving one's commitment to staff and their overall wellbeing. The solution in this instance is ongoing employee education. Simply put, staff need to be taught to appreciate the benefits they are being offered.

Both education and communication about employee benefits are critical and have to be sustained – something that most companies don't realise. Employee benefits have to be explained in the context of rands and cents; demonstrating exactly what one's 10% contribution to the provident fund will equate to upon retirement, for example. Employees also need to understand the value in allowing the company to look after them: what the company's collective investment power means in terms of returns on their investment and reduced administration fees. It's also very important that staff are able to ask questions and compare the company's offering with what they would be able to achieve in their individual capacity.

When it comes to making employee benefits attractive to younger employees then, one needs to start at the very beginning – from their initial job interview, in fact – and make employee education a priority. By demonstrating exactly what your company is offering, and how committed you are to this prospective employee's well-being and future, you will be in a position to leverage these benefits appropriately, and build a foundation to attract and retain quality staff.

Disclaimer: Please note that this article is at least 12 months old.
Any information herein was accurate when published on 5 January 2009