Benefits are the employees' concerns and are factors in helping businesses attract talent. Meanwhile, salary seems to be the interest of many workers when looking for a job. Should businesses invest in benefits or salaries for employees?
Employees are always attracted by the salary and benefit policies when working at the enterprise. It's like a well-deserved reward for their hard work. As for business managers, the budget spent on salary and benefits is considered an investment. And any investment must make a profit.
Should businesses invest in salary or employee benefits? What is the best return on investment? Navigos Search- Vietnam's leading middle and senior-level recruitment brand will provide you with the answer through the following information.
1. What are the benefits?
According to the International Labor Organization (ILO), benefits are understood as “all types of facilities, services, and amenities built under commitment to create a healthy work environment for employees and take advantage of the available advantages to improve health, well-being, and productivity.”
Benefits usually account for 30% of financial compensation. In developed countries, when the salary of workers is at a high threshold, businesses tend to increase benefits to attract and retain talent.
Besides salary, benefits are one of the factors that employees care about the most when signing a labor contract. Employee benefit regime also reflects the working environment and quality of labor in the enterprise.
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Find out about definition of benefits
2. What are the advantages of investing in benefits and salary for businesses?
For benefits
Benefits are one of the concerns of employees and are also a "magnet" to help businesses attract talent. In enterprises, there will be a number of optional benefits such as extra days off, profit sharing, premium medical insurance, food allowance, and provision of modern working equipment.
However, nowadays, it seems that these things have become familiar and almost a "must-have" for highly qualified workers in big cities like Hanoi and Ho Chi Minh City. This has created pressure and is also leverage for businesses. If businesses spend a great deal of money to bring the best benefits to employees, they will attract dedicated talent. However, the question is what happens if businesses do not invest in benefits.
As for employees, they desire a business with many good benefits. Offering good employee benefit policies is a smart way for businesses to have dedicated and loyal employees and help reduce costs for recruitment (with replacement positions).
For salary
Salary seems to be the top concern of workers when looking for a job. If employee benefits are the "measurement" of a good business, salary is the "assessment" of employees as salary often comes with ability. It's necessary for businesses to offer high salaries for positions that need highly qualified staff to acquire talent and develop strongly.
Businesses should focus on salary and employee benefits
3. Salary' or 'benefit' - Which is the judicious investment for business?
Although salary is a significant factor for businesses to attract workers, they should also focus on other ones such as remuneration policies, working environment, and development opportunities. Thus, managers must flexibly invest in both salary and benefits to attract and retain talent and build credibility for businesses in the labor market.
Besides, according to information from Navigos Group's Talent Guide 2023, the factor that makes employees want to have long attachment to their company "working environment" with a highest rate of 63.99%, followed by "salary" with 60.22%, "corporate culture" with 55.09%, "stability of business operations" with 45.93%, "flexible working mechanism" with 41.48%,respectively.
Employees pay a lot of attention to the work environment and corporate culture. Other material factors such as salary or bonus do not play a prerequisite role in affecting an employee's decision to have a long attachment to the current company.
4. Employee benefit solutions for businesses
Below are some employee benefits policies that businesses can refer to :
Training support
The nature of each job will be different. However, employees must update with new relevant professional knowledge. The frequency of knowledge updates can be quarterly, annually, or when there are new regulations.
To complete the assigned tasks well, employees must spend time and money to enhance their knowledge. Instead of this, businesses should establish a policy to support employee training by:
- Paying for the course. Employees commit to continue working for a specific period upon the course completion.
- Opening classes, preparing textbooks, and hiring teachers. Employees only arrange time to study.
- Updating the knowledge that needs to be supplemented.
Allowance
To attract a large number of qualified personnel, businesses need to create the necessary conditions to make employees feel secure to work. Those conditions are allowances such as housing, dormitory, shuttle bus from the city center, support for phone bills and fuel for job positions that move a lot.
For jobs that need creativity, high concentration, and support equipment, it's necessary to have an ideal working environment and space. Enterprises should provide workspace allowing employees to work remotely and a comfortable, quiet working space to ensure employees always find their positive energy during the working process.
Create the best working environment for employees
Annual travel
Employees have been dedicated to heaps of projects and brought many outstanding achievements to the business. For businesses, in addition to focusing on work performance, it's necessary to meet the entertainment needs of employees to help them balance life. Traveling for a few days a year is a form applied by companies and businesses with different locations, times, and travel budgets each year.
Annual leave
According to Article 113 of the Labor Code 2019, depending on the subject of labor and the nature of the job, each employee has 12-16 days of paid leave per year. At many large enterprises, work tasks sometimes pile up into a certain amount of time, and employees have to work overtime.
After this period, the workload is less, and they want to spend more time with their family and rest to regain their energy. Extending annual leave for employees is also a welfare policy for employees that businesses should consider.
Seniority bonus
To increase employee retention and maintain the stability of a skilled workforce, businesses can apply seniority bonuses in addition to performance-based bonuses. Seniority is usually calculated in terms of 5 years, 10 years, or 15 years. For each seniority milestone, there will be a bonus specified in the company's welfare policy.
In addition to bonuses, it is also advisable to evaluate and promote personnel with thorough expertise to higher positions.
Bonus in kind, cash based on performance results
The same nature of work and undertaking the same project, but the effort of each employee will be different. To motivate employees and raise their sense of responsibility for work, annual bonuses and hot bonuses are also applied such as monthly revenue bonuses, movie tickets, shopping vouchers, cash, and more.
Reasonable reward is also a necessary benefit policy
Hopefully, the above information has helped you understand what benefits are and the vital role of benefits for employees and businesses to offer a reasonable benefit policy for employees and reap great benefits for your business.
In addition to focusing on salary and benefits to attract and retain talent, your business should also pay attention to the recruitment process to ensure that the right person is selected for the right job.
However, in the face of the fierce competition for talent in the current labor market, it's relatively hard to recruit potential candidates.
The appearance of recruitment service through headhunter as the golden solution for businesses that need to recruit high-level personnel. In particular, Navigos Search is currently Vietnam's leading headhunter brand in with many outstanding features:
- Possessing a massive data volume of 375,000+ senior candidates, 85,000+ senior management candidates is the biggest advantage that helps our headhunters assist companies in recruiting high-level candidates in all fields..
- Our consultants are experienced professionals who always accurately grasp the recruitment requirements of the business. Based on a methodical working process, they will conduct a thorough search, exchange, and interview and provide you with the most appropriate and potential candidates.
- We assign a dedicated team to support all your business requirements. Search results will be retained with a high rate of finding suitable candidates.
- Our consultants will accompany your businesses in interview rounds to select the most suitable and potential candidates.
- After the candidate is selected, we will continue to closely support businesses in other necessary stages to aim for "Success after joining" to achieve sustainable development.
- With more than 20 years of experience in "hunting for talent", we have helped hundreds of thousands of businesses and corporations get the best quality personnel.
Navigos Search- Vietnam's leading high-level personnel recruitment company
With outstanding features in the high-level recruitment market, Navigos Search always strives to help candidates and businesses reach their dreams through the number 1 professional recruitment service in Vietnam! Don't hesitate to contact us if your business is looking for talented staff for middle and senior positions.
Navigos Search - Vietnam's leading middle and high-level talent hunting company