23 February 2023
In the modern employment landscape, financial and emotional wellness has become a priority in most workplaces. In fact, company management is and must take these practices seriously if they want to retain their employees. One of the ways to go about it is by offering financial benefits that work toward empowering employees and minimising their financial stress. These benefits play a vital role when employees are seeking new growth opportunities. Understanding the benefits of the company has encouraged most multinational corporations and stabilised start-ups to provide financial incentives to their employees.
Usually, companies focus on non-financial benefits simply because of their long-lasting and stronger destressing effects. However, many fail to recognise the importance of these benefits for their employees. These advantages help employees with the tools to manage money wisely both — short-term and long-term. While providing financial benefits for employees is relatively simple, employees also need to understand that these benefits depend on their position in a company. It depends on the role and position they hold in the organisation, accordingly they can see what benefits are applicable.
For a better understanding, below are the 5 effective financial benefits provided by most organisations:
As per the National Commission of Labour, wage incentives provide added motivation for employees who have achieved something beyond a specific target. Such perks reward hard-working and ambitious employees, encouraging them to be more innovative and productive at the workplace, thereby increasing their efficiency. These incentives are mostly found in departments where immediate results can be measured.
For example, most companies implement such programs for the sales department of their organisation. Hence, apart from the current base salary, the worker also gets a certain amount for every ‘n’ number of sales.
There are several efficient wage plans to provide financial benefits for employees. For instance, the Halsey Plan ensures that every worker gets a minimum wage and a bonus is ensured if the work gets completed within a stipulated time. However, the bonus is set at a specific proportion which is 50% according to the time saved.
Holiday bonuses are provided to top-tier professionals and entry-level employees alike and vary depending on the position in the company. Bonuses are commonly given once a year and most companies choose festivals or the holiday season since these are the times when there is a significant outflow of money.
The Payment of Bonus Act, 1965 has made it mandatory for establishments employing 20 or more workers to provide a bonus of 8.33% as a minimum for those earning ₹10,000 or less as their monthly income. Getting such financial benefits from the company is important to employees, even if only positioned as an incentive.
This option allow employees to buy company shares at a lower price than the market price. Purchasing company stocks at a lower rate allows employees to be proactive components in company ownership.
No wonder such financial benefits help extract the maximum productivity as employees strive to put in their best efforts. Some reputed companies including Infosys, Microsoft and Amazon have granted stock options to their employees. Company stocks also help the employee to save tax as it acts as a tax relief. However, considering the fluctuating market conditions, keeping too many stock options can be risky.
Financial security after retirement is of utmost importance, especially to people are in service line. While not all organisations offer a pension after retirement, the concept of a provident fund has become a must for all employees.
It’s a retirement savings plan managed by the government. Provident funds are also applicable to differently-abled workers who cannot continue service due to unexpected reasons. Moreover, some provident funds also allow an early payout in unforeseen emergencies.
This option enables employees to take leaves for up to 30 days without any loss in their pay. It not only eases the pressure on employees but also allows them to devote time to other aspects of life and keep a professional-personal life balance. Be it family vacations, R&R activities or even in urgencies, these leave benefits permit employees to allot time to important life events without the fear of a pay cut.
These financial benefits are a few that companies ought to consider while preparing company policy. While holiday bonuses are great for boosting morale and keeping the workforce happy, paid leaves ensure that the workforce can balance life and work seamlessly. In addition, health coverage and retirement benefits are great at letting employees know that the company cares.
For strategies designed to offer holistic financial benefits to employees, partner with Fibe. We offer financial wellness programs that are easy to integrate and completely customisable. Trusted by over 800 corporations, our financial wellness programs can help you deliver a suite of financial benefits for employees.
Why are financial benefits important?
Financial benefits help increase employee productivity while equipping them with the tools to minimise financial stress.
What are the examples of financial benefits?
What are the various types of employee financial benefits?
How important are these benefits to employees?
Providing benefits ensures employees that the firm is invested not only in their financial wellness but also in their future. This helps any organisation retain its workforce and attract new talent.
How do employee benefits affect the organisation?
With better benefits, a company can recruit talented professionals. Furthermore, this can help any organisation decrease its attrition rate while enhancing retention.