Does your employee benefits plan match up to your corporate compensation philosophy? It should.
Your corporate compensation philosophy is a strategic decision about how to position your business in the marketplace. Whether it is documented or a matter of internal practice, your compensation philosophy shapes how employees perceive your business with respect to your competitors. What are your company’s values? What benefits budget do you have available? Which types of employees do you want to attract and retain?
If you want to be the best company in your industry for innovative product design, you must hire and retain the best product engineers. That means appropriately compensating them to help reduce turnover. If your business is focused on providing the best customer service in your industry, you must hire and retain the best customer service representatives. The benefits offering for these two groups of employees may be very different.
Your compensation philosophy determines who you compensate, what amount, and for which accomplishments (e.g. longevity with the company, highest sales, etc.). Throughout your organization, employees are paid different amounts based on factors including tenure, ability, skill set, job title, etc. But compensation is not just about a salary.
For example, Fortune Magazine’s 2013 report, “100 Best Companies to Work For”, ranks Ultimate Software as company number 9. They hold a place in the top 10 best companies in part because they offer a benefits plan that covers 100% of healthcare premiums for employees and dependants. According to the CEO of Ultimate Software, Scott Scherr, “The company has only 8% turnover and only 4% of it is voluntary. Low turnover means good employees stay and are more productive.” Ultimate Software has decided to offer some of the best benefits available, and it has paid off.
While not all businesses can afford the most comprehensive benefits plan, your benefits plan should match your compensation philosophy. It should be flexible enough to offer a highly attractive set of benefits to key groups of employees – those which are strategic to your business. However, if you accept high turnover in other areas of your organization, a limited benefits plan may be the solution for that set of employees.
You should be able to customize your benefits plan and your available budget to support your compensation philosophy on every level, whether you are a small business or a multi-division national corporation.
That is where The Benefits Trust comes in. We specialize in helping successful business owners build a customized benefits plan that aligns with their compensation philosophy, and stays on budget.
>> Contact The Benefits Trust today for more information about customized benefit plan designs for your Canadian organization.
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