Changing Face of Employee Benefits
As the workplace and employees have changed and evolved over the years, so too have employee benefits. Where as in the past benefits were strictly aligned to your job, modern benefits are more aligned to the modern lifestyle and the evolving economy.
Pay and set working hours were the core benefits for most working people when Queen Elizabeth II ascended the throne in 1952. The rise of employee benefits stems partly from employers' attempts to bypass pay increase demands from unions.
"In the early 1950's, most employees were given their pay at the end of the week with no real benefits except a holiday at some point in the year. Those working for certain organisations may have been given some sort of pension fund, but even that was a rare occurrence,” explains Lyndy van den Barselaar, Managing Director of human capital solutions provider Manpower South Africa.
"As the economy and the way in which we live has changed, employees began to demand higher salaries and more benefits. As a result, benefits have improved and become centred around employees and their lifestyles,” she notes.
"Benefits in the modern world are centred around improving an employee's quality of life. With the cost of healthcare, fuel, products and services rising steadily, it becomes increasingly important for employees to receive benefits such as medical aid, pension funds or retirement annuities, and fuel allowances,” she says.
In Prudential's sixth annual study of employee benefits it was stated that there has been a fundamental shift in the way employers think about and deliver benefits.
The report saw the following trends in 2011:
• Employees are obtaining personal insurance and savings products on the job in greater volume.
• Technology has grown in importance, even if it produces uneven results.
• Benefits decisions are being made differently, not just to save money but to attract and retain employees.
• Brokers/consultants are changing the way they service their clients and do business.
• Employers are happy with their voluntary benefits programmes but are looking for ways to better measure success.
In a recent study on rewards and benefits, it was found that the top five rated benefits by Sub-Saharan African employees are salary, provident or pension fund, medical aid or healthcare, performance bonuses or incentives, and maternity leave, with 65%, 63%, 63%, 62% and 52% respectively.
"This reflects that looking after their health, their families and their future are the most important factors for most employees. This is something that employers must keep in mind,” says van den Barselaar.
She explains that many employees do not fully understand and/or appreciate the benefits they receive.
"Employers should revise employee benefits, from medical scheme subsidies to retirement funds. It is important, in this day and age to provide an integrated package of benefits that meet the needs of the employee,” states van den Barselaar.
"However, benefits should not be limited to providing a retirement fund, death and disability assurance and a medical scheme subsidy; a properly integrated package of employee benefits should include teaching employees how to manage debt, budget and save,” she says.
"These skills are increasingly important in today's economy. If an employee is comfortable with their financial situation and is able to budget and plan well, they are likely to be more productive,” says van den Barselaar.
She says employees who are worrying about debt are more likely to be stressed and therefore less productive. "Reports also suggest they may have a high level of absenteeism and suffer from poor health brought on by the worry of being financially troubled,” she explains.
Thus, van den Barselaar suggests that if employees introduce integrated packages of proper employee benefits, it will have a positive effect not only on their companies but also on the economy.
"Employers need to realise that a one-size-fits-all approach does not really apply to employee benefits, and that it is important to match the needs of each employee with their benefits. These also need to be reviewed on a regular basis, to make sure that they are changing if and when the employees life is changing,” explains van den Barselaar.
Reports have also indicated that the employee benefits industry is set for significant change.
"The industry will undergo significant change over the next few years as the need to bring more people, including the lower income bracket, into the industry is likely to result in a reduction in the number of service providers and funds,” explains van den Barselaar.
Owing to this, she suggests employees speak to financial advisors to ascertain how they will be affected.
"Planning for the future is vital, and it is especially so in this day and age, where the cost of living is constantly increasing,” concludes van den Barselaar.
