The changing face of employee benefits

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Research shows that organisations have had to restructure their benefit
policies to suit employee lifestyles and move away from the generic practice of
providing all employees with the same benefits.


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As the workplace and employees have changed and evolved over the years,
so too have employee benefits. Where as in the past benefits were strictly
aligned to your job, modern benefits are more aligned to the modern lifestyle
and the evolving economy.
Pay and set working hours were the core benefits for most working people
when Queen Elizabeth II ascended the throne in 1952. The rise of employee
benefits stems partly from employers? attempts to bypass pay increase demands
from unions.
"In the early 1950?s, most employees were given their pay at the end of the
week with no real benefits except a holiday at some point in the year. Those
working for certain organisations may have been given some sort of pension
fund, but even that was a rare occurrence,' explains Lyndy van den Barselaar,
Managing Director of human capital solutions provider Manpower South Africa.

"As the economy and the way in which we live has changed, employees began
to demand higher salaries and more benefits. As a result, benefits have
improved and become centred around employees and their lifestyles,' she
notes.
"Benefits in the modern world are centred around improving an employee?s
quality of life. With the cost of healthcare, fuel, products and services rising
steadily, it becomes increasingly important for employees to receive benefits
such as medical aid, pension funds or retirement annuities, and fuel allowances,'
she says.
In Prudential?s sixth annual study of employee benefits it was stated that
there has been a fundamental shift in the way employers think about and
deliver benefits.
The report saw the following trends in 2011:
? Employees are obtaining personal insurance and savings products on
the job in greater volume.
? Technology has grown in importance, even if it produces uneven
results.
? Benefits decisions are being made differently, not just to save money
but to attract and retain employees.
? Brokers/consultants are changing the way they service their clients
and do business.
? Employers are happy with their voluntary benefits programmes but
are looking for ways to better measure success.
In a recent study on rewards and benefits, it was found that the top five
rated benefits by Sub-Saharan African employees are salary, provident or
pension fund, medical aid or healthcare, performance bonuses or incentives, and
maternity leave, with 65%, 63%, 63%, 62% and 52% respectively.
"This reflects that looking after their health, their families and their future
are the most important factors for most employees. This is something that
employers must keep in mind,' says van den Barselaar.
She explains that many employees do not fully understand and/or
appreciate the benefits they receive.
"Employers should revise employee benefits, from medical scheme subsidies
to retirement funds. It is important, in this day and age to provide an integrated
package of benefits that meet the needs of the employee,' states van den
Barselaar.
"However, benefits should not be limited to providing a retirement fund,
death and disability assurance and a medical scheme subsidy; a properly
integrated package of employee benefits should include teaching employees
how to manage debt, budget and save,' she says.
"These skills are increasingly important in today?s economy. If an employee
is comfortable with their financial situation and is able to budget and plan well,
they are likely to be more productive,' says van den Barselaar.
She says employees who are worrying about debt are more likely to be
stressed and therefore less productive. "Reports also suggest they may have a
high level of absenteeism and suffer from poor health brought on by the worry
of being financially troubled,' she explains.
Thus, van den Barselaar suggests that if employees introduce integrated
packages of proper employee benefits, it will have a positive effect not only on
their companies but also on the economy.
"Employers need to realise that a one-size-fits-all approach does not really
apply to employee benefits, and that it is important to match the needs of each
employee with their benefits. These also need to be reviewed on a regular
basis, to make sure that they are changing if and when the employees life is
changing,' explains van den Barselaar.
Reports have also indicated that the employee benefits industry is set for
significant change.
"The industry will undergo significant change over the next few years as the
need to bring more people, including the lower income bracket, into the industry
is likely to result in a reduction in the number of service providers and funds,'
explains van den Barselaar.

Owing to this, she suggests employees speak to financial advisors to
ascertain how they will be affected.
"Planning for the future is vital, and it is especially so in this day and age,
where the cost of living is constantly increasing,' concludes van den Barselaar.

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