As a business owner, one of the biggest challenges of growing and maintaining a successful business can be having the right team. Once you’re lucky enough to have great employees at your company, how do you keep them from jumping ship? Besides offering a good salary, there are other ways that you can make your business a competitive place to work, such as offering group employee benefits.
But what are group benefits? These are different types of compensation, in addition to a salary, that companies can provide their staff. SARS calls these ‘Fringe Benefits’, referring to ‘non-cash benefits granted to employees’.
Many small-to-medium business owners mistakenly believe they cannot afford to offer these sorts of benefits. However, with the right financial advisors, it can be done in an affordable manner that best suits your business and is certainly advantageous in the long run in retaining staff loyalty, cultivating positive company culture and building longevity.
Examples of benefits you could offer your employees includes the following:
- Retirement: This might include a Group Retirement Annuity, Provident Fund or a Pension Fund.
- Group Risk Benefits: These are life assurance products which may be offered together with some form of retirement savings vehicle. This includes cover in the event of death, disability and/or severe illness. In the instance of disability or critical illness this provides for the replacement of income as well as additional medical costs.
- Funeral cover: Typically a lump sum pay-out within 24 hours of a death to cover the short-term financial needs i.e. costs of a burial or cremation.
- Medical Aid and /or Health Insurance: It’s worth noting that some are more comprehensive than others i.e. may or may not include personal accident disability, death or funeral cover.
When it comes to group scheme insurance, not only do the employees benefit, but it can also be advantageous for the employer.
Here’s five reasons why you should consider offering group benefits at your business!
#1. Attract Good Staff
As any business owner knows, it can be difficult to find good quality employees. Offering good benefits can differentiate you from your competitor when it comes to attracting top talent in your sector. Benefits offer existing and potential staff peace of mind, financial security – not to mention convenience.
#2. Better Employee Retention
Off the back of Covid-19 the world has been experiencing something called ‘The Great Resignation’, with a spike in the number of people suddenly resigning across industries, so working to retain staff should be a key consideration for your business.
It’s expensive to recruit and hire new employees, so providing benefits is a good way to help retain your existing staff base. By offering additional value to their lives through group benefits, this creates a sense of security and increased well-being, which in turn will likely discourage them to leave.
#3. Competitive Rates & Easier Management of Insurances
By taking out policies for a group or a number of people, you will likely be able to negotiate a preferential rate. In addition, grouping the coverage under one master plan, group insurance policies can become much easier to manage than other alternatives.
#4. Improved Employee Productivity
If your staff are less concerned about their future and their families’ well-being – due to being covered from a health perspective, for example – they will be more freed up to concentrate on their job. A more engaged workforce, who feel cared for by their employer, are also more likely to care about their work.
#5. It’s Tax Friendly
A major advantage for employers offering group benefits or insurances, is that employer-paid premiums are tax-deductible as company expenses – whatever the business’ percentage contribution may be.
In turn, it can be a really good way to help employers with the tax write-off and helping employees to pay their portion of their insurance pre-tax, rather than paying post-tax for an individual plan.
As you can see, offering group benefits has many advantages – it’s a clear win-win for both the business and the people who work there! To recap, this can help you stand out from the rest, improve company culture and cultivate loyalty, while also offering competitive rates and being tax friendly.
And remember, you don’t have to offer all the benefits right away. Instead, consider starting off with essential benefits (like health insurance) and expand the employee benefits programme as your workforce and profits grow. Contact TVC Wealth and Health Managers today to find out more about what group benefits your company can offer!