Basic Employee Benefits: What Should Your Business Offer?
Introduction to Basic Employee Benefits
Basic employee benefits are critical to ensuring a conducive environment for employees to provide value. Apart from compensation,
organizations offer employee perks to retain talented employees and promote a secure and balanced life. The basic employee benefits explained in this article are a critical component of the overall human resources strategy of organizations. They enable higher employee retention, employee satisfaction, and employee development.
Your employee benefits strategy is critical to ensuring you attract and retain talented individuals. Hence, the employee benefits strategy is necessary for growth. Most highly successful organizations, such as Google, WalMart, and MIT, all have innovative basic employee perks.
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Basic Employee Benefits
Employee perks vary with type of employment, organization to organization, industry to industry and geography to geography. The
basic employee perks listed below are typically found for full-time employees:
Vacation time: This is one of the basic employee benefits that is found in all industries and geographies. It is usually fixed. Though in the recent past, some organizations have tied the vacation time earned to the tenure in the company. Typically, the vacation time earned is between 14 and 21 days in a calendar year for full-time employees.
Sick Leave: Varies with full time and part time employees. For full-time employees, sick leave is usually fixed as per the number of months of full-time employment. For example, it could be 1 day per month of full time employment. This figure also varies with geography. For part time employees, the sick leave earned may be based on the hours worked in the previous calendar year. For example, the current sick leave policy for Illinois Central College states that if a part time employee has worked 400 to 799 hours in the previous calendar year, the employee is entitled to 1 sick leave day.
Insurance: Insurance is another one of the basic employee benefits that varies substantially from organization to organization and from industry to industry. For example, at MIT all eligible employees automatically get $50,000 cover of a Basic Life Insurance Plan. Some employers have a fixed cover, such as MIT, while others may tie it with the employee’s annual salary. Either way, this is one of the more attractive employee perks.
Retirement (Pension) System: Some organizations offer mandatory retirement plans. Usually, enrollment to this system is automatic and there may be a clause for employees leaving the organization before a specific tenure. In some geographies, gratuity is also mandatory. Either way, this is one of the employee perks that provides security to the employee.
Health Plans: Automatic enrollment to medical or health insurance. This employee benefit is usually for full-time employees .
Recruitment (Joining) Bonus: This is one of the basic employee benefits that gives instant return to both the organization and the employee. In this case, the organization provides a new hire with a lump sum of money as a joining bonus. This lump sum can vary from organization to organization, industry to industry and geography to geography. Usually, the bonus is a variable of the employee’s basic pay.
Referral Bonus: Instead of hiring talent through expensive consultants, many organizations have taken to offering a referral bonus to its employees. In this system, an employee refers his/her friends for openings in the organization. In return, the employee gets a lump-sum of money. This is one of the employee perks used to high degree of success in software organizations.
Flexi-Timings and Work-From-Home Options: This is one of the basic employee benefits that is relatively new and is commonly found in the software industry. In this benefit, employees are provided with options of working from home and/or choosing their work hours. It is enables employee who have certain constraints to provide value to the organization. Without which, the employee would have to leave the company. For example, if an employee has toddlers to look after, that employee
would rather choose to work from home, than spend time commuting between work and home and leaving the toddler at a temporary care centre. In some organizations, such as Google, a child day care center is provided at their premises. This is useful for employees who hold responsibilities that can’t be fulfilled from home.
Career: Many organizations don’t advertise this as an employee benefit. However, it is one of the reasons why people join an organization in the first place. If you have an effective career growth system in place, which includes training, employee coaching, and a defined roadmap for all employees, then it is one of the most crucial basic employee benefits.
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Apart from the employee perks listed above, there are several others basic employee benefits, including Gym and Spa memberships, tuition waivers, tuition reimbursements and tenure bonuses.