Indirect Compensation
How to Attract, Recognise and Retain Workers?
Everybody likes focusing on the benefits of doing something. Even on a cold morning, when the alarm clock sounds and you are due for an exercise session, you probably weigh up the benefits of going through with it before getting out of bed.
In the land of employment, benefits work in a similar way.
While compensation exists to pay a person for their time, the benefits of doing their job, namely the financial ones, will be what attracts them and motivates them to do well for your company.
What is Indirect Compensation?
Indirect compensation is the name given to the more casual term “employee benefits”. Employee benefits refer to any number of “bonuses” a company provides an employee for joining, staying, and exceeding expectations with it.
The Advantages of Indirect Compensation
Go back several decades, and the idea of providing extra compensation to an employee would have been thought of as silly, even unnecessary. Nowadays though, as Human Resources teams begin to understand more and more about employee motivation, providing additional compensation seems to make more sense.
A company stands to benefit from the bonuses given to an employee as a happy employee is a productive one. An employee that feels less stress, feels appreciated, and feels valued is likely to stay at a company, and try their best for it. They’ll also become sick less, and enjoy an increase in productivity.
Examples of Employee Benefits
In Great Britain, there are several different types of employee benefit, but there’s one that is most common throughout all industries: extra financial incentive. This benefit does not necessarily mean a cash boost, but simply an improvement of the financial status of their worker.
Take sick pay, for example.
While most workers are legally entitled to less than £95 per week after their first 4 days off sick, a company may choose to pay more to release the pressure of ill health on their worker.
Another very popular employee benefit is life insurance. If your employee passes, the family will receive a lump sum to cover living expenses. The premiums will be paid by the company, but the employee and their family will receive the cover.
In fact, insurance in general is a very popular employee benefit. Private medical insurance and dental insurance are both frequently offered benefits.
Other Types of Benefit
Of course, simply improving an employee’s financial status isn’t the only way to attract them to your company and make their life easier. There are other types of employee benefit which will also be appreciated them, but that aren’t totally related to money.
Childcare vouchers, gym memberships and even company cars top the list of most common non-financial benefits given.
Any company that can afford to treat its staff well, should do.
The benefits of doing so are not just for its employees, either, but also for the company itself.
Those that provide better indirect compensation schemes, on average, attract the best workers and have better rates of employee retention.
People are complex, yet simple at the same time. Respect them, and your teams will usually respect you back!
© New To HR
