Why Do Employers Fail to Take Advantage of Company Benefits?

Happier employees are more productive, according to studies, enhancing not only the overall
productive environment, but also corporate efficiency. Furthermore, motivated employees are
less inclined to quit, resulting in high retention rates.
Offering benefits to employees is one way to show them that you care. BUT, employees often
fail to take advantage of company benefits because they are overwhelmed by the number of
choices and don’t know where to start.
It is important for companies to provide employees with a clear overview of the benefits they
offer. This will help them make an informed decision when it comes to choosing which ones they
want to take advantage of.
Although each state in the United States is unique, there are some basic benefit regulations that
all businesses must adhere to.

These are the 4 kinds of benefits:

● Retirement Benefits – Employees with retirement benefits have a better sense of security
regarding their future after they retire.
In the United States, for example, a frequent benefit is the 401(k), in which both the
employer and the employee make regular, defined payments to the employee’s account.
There’s also the structured retirement plan, which is fully funded by the business and
provides employees with a set monthly income when they retire. The sum can be
calculated based on your retirement age and length of service with the company.
● Additional Pay – any money given to employees in addition to their normal pay. Bonuses,
commissions, prizes, and gifts, as well as indirect compensation like stock option
programs, and profit-sharing, all contribute to this total. It can be Individual or
company-wide performance awards, lump sum gifts, and commissions.
However, there are certain arguments in favour of monetary incentives; money incentives
can occasionally encourage unethical behaviour or promote jealousy among co-workers.
Like when a salesman who knows that the most successful salesperson would receive a
greater commission may steal prospects from co-workers or contribute to an unhealthy
competition environment in the office by stealing prospects from co-workers.
To avoid this, make sure that everyone has the same opportunity to earn bonuses, that
the criteria for those awards are transparent to all, and that you are suspicious of any

Differences in employee performance.
● Holiday leave – Paid time off is required by law in many nations, including the European
Union (Austria, for example, has a legal minimum of 22 paid days for holiday and
Finland has five weeks).
Employers in the United States are not required to provide paid holiday leave, but those
who do so willingly have a competitive advantage in talent attraction and retention —
according to SHRM, 9 out of 10 employees believe paid holiday leave is vital to their
overall job satisfaction.
Other sorts of leave, such as parental or bereavement leave, are the same. Because the
law in the United Kingdom does not allow for bereavement or compassionate leave,
providing a few days of this type of leave can be a significant benefit.
Other time-off incentives include training days and sabbaticals, which are normally
optional for employers, but can have a similar influence on employee engagement.
● Insurance – Health insurance (dental, medical, vision), life insurance, and disability
insurance is all included in this category. In many countries, providing health insurance
or some type of medical plan is required, and companies frequently finance publicly
available medical care.
However, in order to provide better options to their employees, many organizations
choose private group or individual insurance.
Life insurance demonstrates that the employer is concerned about the employee’s family
as well. If an employee dies, the person’s family will get a lump sum payment to cover
funeral and other related costs, as well as their cost of living for a predetermined length
of time.
Accidental Death and Dismemberment (AD&D) plans, which pay a lump payment to
employees who die or suffer injuries that prevent them from working, can be added to life
insurance.

Benefits that are required include:

● Family and Medical Leave Act (FMLA) protections
● Statutory benefits include Social Security and Medicare
Employees are obligated to contribute to unemployment insurance through payroll
taxes on a state and federal level in order to help workers who lose their jobs
Workers’ compensation insurance. This gives financial assistance to persons who are
unable to a work due to an injury or illness at work

● Employers (with 50 or more full-time employees) must provide affordable, minimum
value health insurance to 95% of their full-time employees and their children until the
end of the month in which they turn 26 or face penalties.

Benefits that are not required to provide by employers:

Employee benefits that are not legislated are at the employer’s discretion. Benefits such as paid
holiday time, payments to retirement savings plans, education help, wellness initiatives, and
childcare support are examples of these types of benefits.
Many firms are integrating them as part of their basic benefits package to gain a competitive
edge in recruiting and retaining a high-flier staff, as employees increasingly report that
company-provided perks are a major consideration when assessing a job’s offers.

Why Do Employees Fail to Take Advantage of Company
Benefits?

Employers offer a wide range of benefits to supplement their employees’ pay. While employees
appreciate their benefits, at least half of them confess they are unaware of their coverage.
Here are reasons why employees are perplexed by benefits:
● Uninformed – benefits account for over 30% of many firms’ employee benefits budgets.
Employees, on the other hand, are frequently unaware of the worth of their perks.
Employees often speed through the enrolling process while examining annual benefit
options.
● Preoccupied – employees are responsible for a variety of tasks both at work and at
home. They are frequently busy, worrying about how to pay their bills and a variety of
other issues. They don’t have much time to think about their benefits, which can lead to
confusion when it’s time to use them.
● Overwhelmed and stressed – employees want more options for benefits, but not too
many. Some firms provide over ten distinct benefit packages, which may be
overwhelming to employees.
Employees may also have difficulty understanding their benefits due to the inclusion of
unfamiliar insurance words in the plan descriptions.

Conclusion

Employees perks are essential for attracting and keeping top personnel. Finding the proper
balance of benefits to generate a positive return on investment can be difficult for smaller
businesses.

Consider the types of rewards that employees actually value in order to recruit and retain
exceptional people to represent your firm. Then, seek for cost-effective ways to provide
employees with the most crucial perks.