A great employee is a valuable asset, and can be worth every penny if their talent and ethics stand out. On the other hand, some benefits can be a great waste with inferior employees. It is wise to let go of those weak employees, and it is vital to keep the great employees happy. Job satisfaction leads to increased productivity and pride in the company.
Would it improve morale and keep employee satisfaction higher to just increase salary instead of various perks and benefits? Maybe. However an employer will save money by not being taxed twice on pay, in comparison to benefits.
Employee Perks Pros and Cons
· Sign on Bonus Finding the best employee with attributes that are in demand can be difficult, even when there are plenty of applicants. When a person is talented and stands out among the other well qualified applicants, they have likely been noticed at the other places they applied in their job search. Offering a sign on bonus can sway an in demand applicant to your company. If the employee is a talented as they seem, this will likely pay off. When it comes to a sign on bonus, it is a good idea to offer it as a base incentive. It may also be a good idea to offer an additional amount to sway in demand applicants your way, with a non-disclosure agreement on the amount. This can start an employee off with a great attitude towards your company, and you can really see if the investment is worth it right off.
· Retention Bonus This bonus is offered to an employee after staying with the same company for a set amount of time. The upside? It helps insure that the sign on bonus is not wasted by giving employees and incentive for staying with one company. The downside? It is essentially rewarding employees regardless of performance simply basing the raise or bonus on time spent. This particular perk may not pay off for your company in the end, unless it can be a retention bonus that is also performance based with clear standards so there is a goal to achieve. It should also not be the only thing that is motivating employees to stay on and work hard.
· Company Car This benefit may be worth it if the employee actually uses a vehicle to do their job. It is unlikely that this benefit is financially sound otherwise. Although it can be a way to pay employees more with less tax repercussions, and to stand out as a company that offers lavish perks.
· Education Some employee investments are unavoidable, and directly benefit your company such as paid training and educational perks to update knowledge. These are typically worthwhile but carry risk if the employee does not stay on to use this knowledge within your company. The way to offset this risk is by requiring employees to sign a contract that will leave them owing for their education expenses if they do not stay on for a set time.
Is there a way to really tell if your employee investment is worth the expense in a clear black/white yes/no fashion? No, not really because each perk comes at a cost to the company. But when it comes to valuable employee retention it may be worth every penny. Measures should be taken to monitor employee performance to insure that no one is enjoying those great benefits you offer while resting on their laurels. It should be a balance between great employee benefits and employees who are a catch and bring their own unique brand to the table.
Bottom line? Are they bringing in more than the cost of investment? Is it likely that these numbers will grow? What other assets do they bring to the table? The whole picture must be studied to get a full grasp on the worth of a single employee. Make sure that your company is receiving increased employee motivation/inspiration and of course increased profits in return for each bonus or perk. Communicating with employees about which perks mean the most can make employees feel more values and make sure that employees understand the weight of the offered perks and benefits as well.