Employee Benefits: 9 Policies to Retain Talent

Along with societal development, employee benefit schemes have become a “survival” problem that businesses must solve if they want to retain their talented workforce. Changes in human resource management trends require businesses to build professional compensation and benefits packages that truly “touch” upon the needs of employees. To help HR managers fully and correctly understand benefit schemes, 1Office provides a standard process for building employee benefit schemes and a sample benefits policy for reference in the following article.

1. What is an employee benefit scheme?

An employee benefit scheme consists of compensation policies in addition to salary and bonuses. The purpose of a benefit scheme is to provide necessary amenities to ensure the comfort and convenience of employees, thereby boosting morale and increasing productivity. Benefit policies can be financial perks like insurance and allowances, or non-financial perks related to the health and safety of employees.

2. Employee benefit schemes in a business

Mandatory benefits

Mandatory benefit schemes are the legitimate rights of employees, protected by law and specifically stipulated in the Labor Code. Accordingly, businesses must provide the minimum benefits for employees, including:

• Sickness allowance
• Maternity benefits
• Retirement benefits
• Workplace accident or occupational disease benefits
• Survivorship benefits
• Types of insurance: Social Insurance, Health Insurance, Unemployment Insurance

Voluntary benefits

In addition, businesses can implement voluntary benefit schemes depending on their capabilities and suitability to employee needs. Voluntary benefits are very diverse and are implemented in many different forms, such as:

• Travel, vacations, team building trips
• Professional skills training programs
• Periodic health check-ups
• Types of allowances: Overtime allowance, Holiday allowance, Lunch allowance, Phone allowance, Travel allowance, Housing allowance

3. Benefits of building an employee welfare program

Retain employees, reduce turnover rate

An employee welfare program is one of the best methods to enhance employee engagement. When employees receive thoughtful care and compensation, they will feel more connected to the organization. This allows the business to effectively build strategies to retain talented employees.

Increase labor productivity

The purpose of employee benefit policies is to increase job satisfaction among workers, thereby motivating them to work more productively. When provided with all necessary conditions, employees will not be distracted by personal issues like financial worries and can fully focus on their work.

Gain a competitive edge in recruitment

Compensation and benefits are an effective tool for recruiters to attract talent. The primary concerns for candidates when considering applying to a company are always salary and benefit policies, as they directly affect their interests. Therefore, if well-structured, a compensation and benefits package can be considered a competitive “weapon” for the business in the human resources market.

Read more: Important HR policies in a business and how to build them effectively

4. The A-to-Z process of building an employee welfare program

Step 1. Survey & assess employee needs

To build an effective corporate welfare program that truly meets employee needs, you first need to understand what your employees need, what problems they face, and what solutions they desire.

Employee surveys will help the business identify and assess the urgency of existing needs within the workforce. You can use various survey methods such as questionnaires, interviews, focus groups, and observing employee behavior.

Step 2. Define objectives

After identifying employee needs, you need to develop them into objectives for the welfare policy. These objectives must help the business solve employee problems and meet their needs.

For example, if employees are struggling with work-life balance, the objective of the welfare program would be: to improve the mental health of employees, helping them feel comfortable at work.

Step 3. Plan the budget

The next step is to create a detailed plan for the employee welfare programs. The key factor to consider here is the cost the business will incur to provide benefits to employees. Expenses need to be carefully calculated and considered to both meet employee needs and fit within the company’s budget.

Step 4. Implement & internally communicate the benefits

After completing the welfare policy plan, the next step is to implement it by announcing it to all employees. The business needs to provide complete information about the welfare program, including eligibility conditions, applicable subjects, and implementation methods, to ensure employees clearly understand their entitlements.

Additionally, the business should widely communicate the policy to all employees and be open to feedback and amendments if necessary. This will help the policy gain more attention and support from employees, thereby enhancing the company’s image.

Step 5. Evaluate effectiveness

To know whether the benefits policy meets the organization’s goals and is suitable for employees, you need to monitor and evaluate the policy’s effectiveness. The metrics that businesses can use to measure effectiveness include: employee satisfaction levels, labor productivity, engagement index,…

5. Company employee benefits policy template

With the desire to help businesses diversify their benefits policies and build a standard benefits framework for employees, 1Office provides you with a sample employee benefits policy file.

Download the Company Employee Benefits Policy Template HERE

5. The latest trends in building employee compensation and benefits policies

The changes in society during the 4.0 era have caused a significant shift in the needs of employees, both in life and at work. A survey conducted by McKinsey & Company has shown that:

• 51% of employees surveyed want to achieve a work-life balance
• 49% value a flexible work environment
• 56% want financial support policies
• 47% are concerned about ensuring mental health at work

Therefore, building an employee benefits policy is not a race for quantity, aiming to fill it with impractical allowances or policies. Instead, the benefits challenge in the new era focuses on quality — specifically, personalizing the employee experience with flexible compensation and benefits.

Protecting employees’ financial health

Financial health refers to an individual’s financial situation, related to income, savings, and expenses to cover living costs. For employees, financial pressure can have a significant impact on work productivity, especially during periods of social and economic volatility. Worries about “making ends meet” and monthly recurring expenses keep them in a constant state of stress and unable to focus on their work.

Therefore, the timely implementation of benefits policies plays a crucial role in improving employees’ quality of life. Practical support policies will provide employees with a stable financial “anchor” and help them alleviate worries about “making ends meet,” thereby allowing them to fully concentrate on their work, which in turn enhances labor productivity.

Some employee benefits policies that businesses can implement to improve employees’ financial health include:

• Implement a flexible salary advance policy: Allow employees to receive a salary advance on any day of the month. The advance amount will be calculated based on the number of days the employee has worked. This salary advance policy for employees not only helps meet the emerging financial needs of employees but also creates a sense of comfort as they don’t have to borrow money but can receive an advance on the money they have rightfully earned.
• Establish emergency support funds: These support funds are a benefit that provides employees with the necessary money to cope with emergencies and difficult situations, such as: a COVID-19 support fund, an accident support fund, etc.
• Organize financial counseling programs: These programs will advise employees on how to use their money effectively. The program content will provide knowledge on how to create a budget, use financial tracking and measurement tools, reputable savings funds, etc.

Building a flexible work environment

The work environment has gradually become a necessary condition for employees to work productively and effectively. A comfortable, flexible environment allows employees to be more creative and enthusiastic in their work, thereby ensuring their mental well-being.

To build a flexible and friendly work environment, you can consider the following methods

• Remote work: Provide flexibility in employees’ working methods. With this policy, employees only need to come to the office for important meetings. On other days, they can choose to work from home or other locations.

• Relax the dress code: overly restrictive rules can make employees feel constrained and uncomfortable. Therefore, relax the dress code, specifically requiring company uniforms only on certain days. On other days, employees can freely wear attire according to their personal preferences. This also implicitly shows that the company respects the individuality and unique character of each person.

Caring for mental health

• Psychological care and counseling programs: These programs aim to provide employees with the necessary knowledge so they can learn how to balance life and work. Additionally, this policy provides counseling services from psychological experts to help employees who are facing mental health issues.
• Activities to enhance mental health: Only with a healthy mind and stable psychology will employees have enough energy to work. Activities such as yoga and meditation are necessary methods to release stress and fatigue and recharge employees’ energy.
• Relaxation amenities: This is an effective “mental healing” therapy for employees after stressful working hours. Amenities the company can provide include forms of entertainment (game consoles), a spa, a swimming pool, etc.

6. Develop professional employee benefit policies with HRM software

To effectively implement employee benefit policies in a business, applying strategies alone is not enough; it’s necessary to use advanced technology to standardize and optimize this process.

With the desire to create the best experience for employees and managers, 1Office has developed the HRM module – a solution that helps businesses solve the human resource management puzzle.

1Office software will help businesses build a systematic employee retention strategy supported by outstanding features such as:

• Transparent and fair employee performance evaluation through a set of KPIs and OKRs built to fit the business’s standards
• Automated and fast payroll generation, with direct salary payment on the software linked to MB Bank
• Building corporate culture with an internal network – a bridge between employees and managers

The above article from 1Office has provided readers with necessary information on building employee benefit policies. For a free consultation and a trial of the 1Office sales management software, please contact us using the information below.