Managing employee benefits
 

Benefits management is the specialist discipline of HR that plans and delivers employee benefits within an organisation. Employee benefits are extra compensation or perks given by an employer to a worker on top of their wages.

 

What are “Employee benefits”?

Employee benefits cover the indirect pay of your workforce. This can be health insurance, stock options, or any myriad of things offered to employees. While two jobs can offer the exact same salary, they can vary greatly in terms of benefits, hence making one offer a better financial proposition than the other. This highlights the importance of employee benefits in a job offer.

 

 

What are the four major types of employee benefits?

Usually, most benefits used to fall under one of the four major types of employee benefits;

·         Medical insurance

·         Life insurance

·         Retirement plans

·         Disability insurance

 

Nowadays, however, the list of employee benefits continues to grow. We’ll take a look at different examples of employee benefits below.

 

How to Manage Employees Benefits

            Choose the employee benefits you wish to provide. A number of different employee benefits exist, ranging from retirement plans to health benefits to setting up college funds for employees. The most popular employee benefit, according to the United States Bureau of Labor Statistics, is offering paid leave for employees. In order to make sure you are getting the best benefits for the employee and are paying the least amount of money, compare different plans and programs to find the plan best suited for your company.

 

Examine the finances of the business to determine how much money can be spent on employee benefits. Take at least one year’s worth of data to see where the business stands. Make sure any employee benefits can be absorbed by the business without it impacting operating expenses.

 

Set up a file for each employee, detailing any benefits being given to the employee, including monthly costs. In addition, have an overall master file prepared to chart monthly expenses for all employee benefits. Make sure all documentation is maintained, since the Internal Revenue Service taxes any employee benefits provided by an employer. The IRS typically expects the employee to pay taxes on the benefits, but the IRS requires proof of any benefits given by an employer.

Set up any automatic withdrawals needed for employees matching any employee benefit contributions, such as retirement funds. Most banks offer the necessary documentation for obtaining authorization for having the employee-matching contribution taken out of the account. If an employee does not want to do that, the deduction can be taken directly out of the paycheck.

 

Monitor financial data on a regular basis. In order for a business to remain successful, the cost of providing employee benefits cannot cut into the company profits. When profits fall due to employee benefits, the company ceases to grow. If the financial picture changes, employee benefits might need to be scaled back or even halted. The employee benefits can return to their previous level when business returns.

 

Steps to Successful Employee Benefits Management

v  Decide which benefits to offer

v  Manage benefit costs

v  Align benefits to your employees’ needs

v  Maintain compliance

 

References

·         Noe, R. A., Hollenbeck, J. R., Gerhart, B. A., & Wright, P. M. (2017). Fundamentals of human resource management (7th ed.). McGraw-Hill Education.

·         Sandage,S (2018) Employee Benefits Administration. Apcoro. https://arcoro.com/blog/employee-benefits-administration/

·         How Do You Manage Employee Benefits (2020). syncHR. https://www.synchr.com/resources/how-to-manage-employee-benefits