When applying for a job, the salary is often the first thing people look for. After that, many potential candidates will check out the listed benefits to see what else the company can offer in exchange for their skills and time. The compensation and benefits you provide can either motivate your employees or hinder your hiring process.
Understanding the importance of a well-designed compensation and benefits strategy helps you boost your company’s reputation among potential employees, positively impact your business performance, and help your employees feel respected.
What Are Compensation and Benefits?
Employee compensation and benefits are the rewards and advantages offered to team members to help attract top talent, boost staff morale, and improve retention rates while building positive workplace environments.
Compensation and benefits can have a financial value attached, like salary or insurance, or they can have no monetary value, like training and development classes and paid time off. Common examples of compensation and benefits include:
- Salary
- Bonuses and commissions
- Overtime pay
- PTO
- Vacation time
- Family leave
- Flexibility schedules
- Remote work options
- Healthcare plans
- Retirement plans
- Stock options
- Training and development
- Profit sharing
- Housing, technology, or meal reimbursements
- Gym memberships
- Merit pay
- Sign-on bonuses
- Referral bonuses
- Relocation bonuses
Benefits of Compensation and Benefits Packages
There are many reasons why companies should offer a robust compensation and benefits package to employees. Foremost, it’s the right thing to do in order to reward your team's hard work and dedication. It also has an impact on you as another employee of the company. Here are some other benefits that you should consider:
Attract and Retain Top Talent
When top talent is looking for companies to apply to, they automatically look at the compensation range and the benefits packages that are offered. People want to work for companies that respect their time and dedication and go above and beyond in their benefits packages. If your benefits aren’t that great, then the best candidates will likely look elsewhere for employment.
Improved Employee Satisfaction
The more well-rounded your benefits plan is, the happier your employees will be. Benefits and compensation packages are ways of telling employees that you respect them, appreciate their efforts, and want them to stick around. By providing great benefits to your team, you can increase employee morale and satisfaction.
Increased Company Loyalty
Another great reason to have a robust benefit and compensation program is that it increases loyalty to the company. People are less likely to look for other employment opportunities if they feel as though their current company is taking care of them. By helping employees get the benefits they need, they will become long-term assets to the business.
Better Business Performance
Following the same logic, employees are also more likely to be productive and motivated to work if they can receive excellent compensation and benefits. The more excited your team members are to come to work, the better performance they will give. That has an impact on your output and your bottom line.
Steps to Design a Compensation and Benefits Program
Now that you know why having a robust and well-rounded compensation and benefits program is so important, let’s walk through the steps you need to take in order to create one for your business.
1. Figure Out Your Goals
The first step is to determine what your goals are. What is a priority to provide, and what benefits make the most sense for you to offer? Think about what would make your employees happy, your budget, and what your competitors offer.
2. Perform a Needs Assessment
A needs assessment helps you gather information that determines what benefits you should offer. By taking stock of your current program and finding the gaps in coverage or benefits, you can learn the best way to improve your packages to fit your goals.
3. Determine the Level of Benefits You Will Offer
The structure of providing benefits varies from company to company. You should consider what type of strategy will best suit your company and determine which type of benefits package you want to implement to ensure your needs and goals are addressed.
4. Share Your Plan with Your Team
Next, you need to share your new plan with your employees. By effectively explaining the changes and benefits they are now eligible for, you help create awareness around the program and ensure that your employees understand their options.
5. Evaluate and Improve Your Plan
Finally, you should continually evaluate your benefits plan and see if there is any room for improvement. You can run audits on how often benefits are used, gather feedback from employees, and explore other options to see if a better-priced package you can use comes along.
Streamline Compensation and Benefits Administration
Do you want to improve your compensation and benefits system? Or do you want help managing other aspects of your HR department? Having the right tools by your side can make all the difference to your teams. Contact Workforce PayHub today to learn how our integrated payroll and HR solutions can help you streamline your compensation and benefits administration.
