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Importance of compensation and benefits

Why Employers Need to Worry About Compensation and Benefits

As an employer, you need to remember that you have people working for you for a few reasons. 1. They’re good at what they do. 2. You need the talents they have. 3. The employee wants to be at the company. 

The first two are simple to understand, but number three is often where companies falter in their strategic planning. By not realizing what employees need to stay at a job, the company can miss out on talent that could bolster their bottom line. 

Employers who worry about compensation and benefits will: 

  • Attract the right talent – Companies that have a strong compensation and benefits package to offer can bring in better talent, more often. While the company may not be able to pay as much as other companies, the benefits the employee can receive may be enough to bring them in the door and keep them in their role for a long period of time. An employee who has multiple job offers will often choose the one that speaks to their current needs and to their long-term goals.
  • Bring in diverse employees – When you can offer a compensation package and a benefits package that speaks to the needs of more kinds of employees — one that is adjustable and includes family coverage — a company will expand the number of people who apply. This sort of compensation and benefit strategy will also help bring in younger employees who may need to have more extensive packages as they move through their career, i.e. family coverage, spousal coverage, etc.
  • Keep talented employees on board – An employee who is taken care of by their employer is one that will stay in their company for a longer period of time. This is especially true when the compensation and benefits packages are structured to increase, or to shift over time. For example, if an employee knows their talents will garner them pay raises in the future, they will be willing – and able – to stay in the company. They will not need to continue to look for other jobs that pay more or cover their needs. 
  • Reduces costs – Though some companies will look at compensation and benefits are merely costs to add to their budgets, smart companies will see the way that these packages will reduce costs. Think about how much it costs to train a new person and to bring them to the level of skill or knowledge that a long-term employee has. By finding ways to bring in talented people who are going to stick around, companies can reduce their labor costs.