Whether you’re a small business owner or running a multinational, one key question to consider is what, if any, employee benefits you are going to offer. Potential staff will be on the lookout for strong benefits packages, which can act as a valuable incentive to attract the best talent. On the other hand, they can be costly to provide and may prove to be more effort for the company than they are really worth. If you’re thinking of offering benefits, the following are some factors to consider.
Are They Really Necessary?
Although offering benefits isn’t strictly necessary for the running of your business, it is nevertheless advisable. It may not be immediately beneficial cost-wise, but you should reap the rewards in the longer run. Appropriate benefits will not only attract the top talent, but will boost overall company morale. You will have team members who will produce better work and will want to stay with the business for longer.
By the time a new hire starts, they will have been through one or more interviews and may have been subject to psychometric assessments and even group exercises. Having worked hard to prove that they were the right candidate, they will feel entitled to something in return. It is important to remember that your work force is your greatest asset, so keeping them happy is key. If they feel that they may be at a disadvantage in comparison with peers in other firms or that they could get a better deal elsewhere, they will leave and the business will suffer as a result.
What Kind of Benefits Should I Offer?
In deciding upon what to offer, think of the age range and demographic of the majority of your employees. Individuals in their 20s and early 30s are more likely to be drawn in by company getaways, bonuses for performance and company cars. An older demographic might be more interested in private health insurance, disability insurance and pension plans. Offering training is always a good idea. It allows individuals to continue learning and demonstrates your commitment to their personal growth. In return, you benefit from more qualified and capable employees.
Where Should I Draw The Line?
It is important to remember that you should never commit to something that could be detrimental to the company. The first and perhaps most obvious rule is not to commit to benefits that you cannot genuinely afford. If you’re a startup, you are unlikely to be in a position to lavish expensive tangible benefits on your team. Happily, however, they will understand that the real rewards will be reaped at a later stage as the business grows. Many startups offer stock option schemes, which garner engagement and commitment based upon future performance. Some, however, overly dilute the business’ equity and pay the price at a later stage so it is important to balance your offer in line with candidate perceptions and market norms.
One final, yet surprisingly common mistake is to offer unwanted benefits. Once again, consider carefully the demographic of your workforce and use market intelligence or perhaps create an anonymous survey in order to gauge their views and align benefits packages accordingly.
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