ROLE OF BENEFITS AND SERVICES TO ATTRACT AND RETAIN TALENT

Employee Benefits are the range of Non-Wage compensation provided to employees over and above their normal Salary. Examples include:

• Housing
• Group insurance (health, dental, life etc.)
• Disability income protection,
• Retirement benefits
• Daycare
• Tuition reimbursement or training cost reimbursement
• Sick leave
• Vacation (paid and non-paid)
• Social security
• Profit sharing

While these are some options there is no end to the possible creativity that firms may use to devise a novel Benefits plan that gives them competitive advantage!
One thing is certain in this day and age- Compensation alone will not retain and attract top talent. The emerging strategy is a combination of rewards including compensation, benefits, performance and recognition incentives, work-life and career development opportunities.

Of these the Benefits and services constitute the major chunk that enable the firm to differentiate itself from the others and to provide its employees the following advantages:
· Morale Boosting
· Peace of mind for employees as insurance cover for them and their family members may be included in the benefits package
· Increase the pride in the company

But the most important benefit albeit from the organization’s perspective is that it helps them attract and retain talent.

Emerging Trends:
The 2006/2007 U.S. Compensation Planning Survey from Mercer Human Resource Consulting — an all-industry review of 950 organizations — found that key emerging practices fell into the areas of retirement benefits and performance management.

The one-size-fits-all approach is no longer applicable in the development of these programs. This is because the multi generational workforce needs the companies to design programs that retain and motivate a diverse employee population such as:

· Provide more flexibility in work hours, compensation, benefits and attire
· Establish formal career paths
· Reward for learning new skills or competencies
· Provide multi-rater performance feedback

Programs effective for Retention:
Survey responses indicate the following incentives to be most effective in retaining employees:
· Cash bonuses
· Supplemental benefits such as dental insurance or a pharmaceutical plan
· Flex time
· Long-term incentives
· Tuition reimbursement

Short Term vs. Long Term planning of Benefits

Short Term focus:
Pay for performance such as bonuses and commissions. Short term incentives can provide a number of benefits, such as making a position more attractive for a potential employee.
Properly structured, they can help employees focus on activities that support the bank’s short-term goals.
They can also control your organization’s fixed costs, providing compensation only when the organization is doing well.
Short-term incentives also provide employee recognition.
The benefit can be delivered in a formal fashion or simply by personalized informal way like a CEO writing handwritten notes and personally handing over appreciation letters to employees along with the bonus in cash (Message: “This bonus is because you were exceptional at(insert task). Enjoy and spend it on yourself.”)

Long-term incentives
Examples include employee stock options and stock appreciation rights.
They can play a part in attracting employees, but they’re generally more valuable as retention tools.
These also provide the employee some recognition. But, the primary objective is to reward vital employees for long term success that enhances shareholder value.

P.N.: While this general idea of use of Benefits is essential to kickstart the discussion on the topic, it is vital to see specific Industry cases to gain in-depth understanding into the issue.
We invite executives to be a part of this endeavour by contributing to this blog about their own experiences about effectiveness of different Benefits and Services programs.
Happy Posting!