Let’s face it, employee benefits aren’t high on the list of priorities for small businesses. With so many other expenses to cover first (like salaries and other overheads), providing benefits to workers seems unnecessary. But what about the benefits the company receives from these provisions? That’s food for thought…
It’s important to note that South Africa distinguishes between mandatory and supplementary benefits. Mandatory benefits include paid time off, parental leave, sick leave, family responsibility leave, overtime pay, Unemployment Insurance Fund, Compensation for Occupational Injuries and Diseases and Skills Development Levy. These are the benefits every business must provide according to the Basic Conditions of Employment. Supplementary benefits, on the other, are the “perks” that are not contained in the law and include benefits such as a bonus/13th month paycheck, retirement or provident funds, as well as medical benefits.
Small businesses aren’t legally obligated to offer their workforce supplementary employee benefits. Yet, the World Health Organisation (WHO) recommends that everyone consider it. This is because it has seen a correlation between employee benefits and physically and mentally healthier staff.
The National Small Business Chamber (NSBC) Summer 2020/2021 survey indicated that most of its members wanted to provide a programme for employee benefits, yet believe they are too small to offer such perks. Infact, only 28% had employee benefit programmes. Furthermore, staff reportedly also indicated that they prefer to maximise their take-home pay and don’t want ot allocate a portion of their salaries to benefits.
A few of the results that the employer sees in workers with benefits include:
1. Boosted Productivity: Workers that know their concerns such as health care is taken care of can focus better on their daily tasks. The argument is that less mental or physical energy is exerted on stress about their family’s health, therefor making them more productive.
2. Increased Loyalty: By providing a range of benefits – especially ones that directly address their needs – show workers that you value their contributio to the business. This recognition fosters loyalty and reduces turnover rates, saving you recruitment and training costs. It is also worth noting that it helps build long-term relationships with clients.
3. Enhanced Reputation: Crafting a reputation in the industry that you are a business that truly cares about its people enhances you reputation. This helps you to attract talent, foster a supportive work environment and create strong relationships in the industry.
4. Financial Security for All: Employee benefits helps financial security for all involved. Employees and their families have financial stability and your business is sure to have employees that can afford to take care of their health.
Advantages for Small Businesses in Providing Employee Benefits
There are five reasons to implement employee benefits:
The tax advantages due to contributions.
Health insurance ensures a healthier workforce.
Improved employee retention that benefits client relationships.
Improved work culture.
Better staff recruitment.
Taxable benefits according to the South African Revenue Service includes:
Acquisition Of An Asset At Less Than The Actual Value
Long Service Awards
Right Of Use Of An Asset
Right Of Use Of A Motor Vehicle For Private Or Domestic Purposes
Meals, Refreshments And Meal And Refreshment Vouchers
Accommodation
Free Or Cheap Services
Low Interest Or Interest Free Debt
Subsidies In Respect Of Debt
Employer Contributions To Insurance Policies Schemes
Employee’s Debt Or Release From Obligation To Pay Debt
Medical Scheme Contributions Paid By An Employer
Medical Costs Incurred By An Employer
However, business owners might still believe that the cost implication of these benefits are too high. So what are other benefits that a company can implement?
Alternative Employee Benefits for Small Businesses
Although the majority of employees worldwide may prefer insurance and health care benefits, small businesses can consider alternatives that offer flexibility and that align with employees’ wants.
The list of benefits that companies already offer include:
Wellness programs
Flexible schedules (flexi hours)
Birthday leave
Mental health support
Childcare facilities
Employee Assistance Programme
Commuter benefits
Diversity, Equity, and Inclusion training
Financial education
Gym scheme or fitness classes
Pets at work day
Fun Fridays
Company awards or recognition programmes
Food or food vouchers
Work-from-home opportunities
Office perks like games, consoles or other fun areas
Providing your employees with benefits that make them feel appreciated while growing your small business doesn’t need to break the bank. There are many creative ways to help your team that are considered benefits. Just remember that you will also need to manage the way you provide these benefits to your employees.
Let’s face it, employee benefits aren’t high on the list of priorities for small businesses. With so many other expenses to cover first (like salaries and other overheads), providing benefits Read More
