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The Benefit of Benefits

Source: http://bryansbizblog.com/

In a previous post titled, Paying More…Getting More I discussed how pay increases may not be as effective in productivity and employee loyalty as one might suspect. So what types of incentives can be used to create a better working climate, assist in retaining valuable employees and be very valuable in recruiting better qualified candidates for open positions within the organization? Benefits are certainly an area that must be considered.

The traditional list of benefits include; medical/dental coverage, vacation pay, sick leave pay, holiday pay, pension plans (e.g. 401(k) plans) and life insurance. All of these have associated costs, some more than others. Some, such as pension plans and retirement plans can actually be much more affordable than most small business owners and non-profit organizations realize. But before deciding to embark on providing benefits, particularly for small businesses, it is important to understand that a ‘Benefit’ is only a benefit, if the employees take advantage of it. In other words, what an owner might believe is a benefit, may not really be one in the eyes of the employees.

I recently worked with a client who truly believed there was but one person who might be interested in a retirement plan. My client met with a Financial Advisor about establishing a plan and then went back and queried the employees. Low-and-behold, there was a much more positive response to the possibility of retirement plans being implemented than the owner imagined. And…the benefits to the owner in starting this new plan were enormous.

Giving pay raises may or may not be as successful in the recruitment and retention of employees as one might hope. Determining the’ benefit’ of specific benefits for YOUR employees, may do more to keep great employees in your business and not migrating to your competitor.

Weekly postings on management and organizational issues for both businesses and non-profits from Bryan Nelson of Vista Management Solutions.

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