THE BUSINESS OF EDUCATION - International Indian

[ MONEyWISE ]
Employee Benefits and their
Impact on our Financial Plans
“Recruitment runs hand in hand with retention – after all why spend a great deal
of money recruiting the best of the best only to lose them to your competitor inside a
couple of years. Hence the growth in the Employee Benefits Industry
and the growth in the product ranges on offer.”
[ By BOB PARKER ]
No longer should the
expatriate worker have to
rely on his own good sense
and financial acumen to achieve his
financial goals if they have a forward
thinking employer!
In the West, for many years now,
the extra ‘employee benefits’ are as
much a part of the ‘take home’ as the
salary itself. I can distinctly remember
my first company car – a bright yellow
four door job with a 1.3 litre engine –
but it didn’t matter that I looked like I
was driving a canary - at only 24 years
of age I had a brand new car! The fact
that I looked like all travelling salesmen,
didn’t deter my enthusiasm one bit!
Throughout the 70s and 80s as I gained
various promotions and company moves, I
was spurred on with the promises of bigger
and better cars – the salary was secondary!!
Eventually I aspired to the company
boardroom and the ultimate prize of a top of
the range Jaguar XJ – mid life but still highly
motivated by the company car benefit.
Employee benefits are today a very
sophisticated industry and like all things in
working life we have moved on from simply
giving a company motor car to dreaming up
highly sophisticated packages designed to
assist in recruiting, retaining and motivating
the best people in the marketplace.
Recruitment runs hand in hand with
retention – after all why spend a great deal
of money recruiting the best of the best
only to lose them to your competitor inside
a couple of years. Hence the growth in the
Employee Benefits Industry and the growth
in the product ranges on offer:
Golden Hello’s, Stock Options, Share
Purchase schemes, Group Medical, Group
Retirement Plans, Group Life, Group
Critical Illness, Motor Cars, Barter Deals,
Luncheon Vouchers, Voluntary Deals, the
list goes on and on.
Cars probably still top the list of visible
goodies – at a company meeting you really
would rather be driving up next to your
colleagues in a Mercedes Coupe rather
than a Honda Civic.
Fleet management allows employers
to offer company cars to employees in
different forms thus being able to incentivise
and reward through choice. If employees
choose not to go with a traditional
company car there is always the option
to give staff this perk as a cash
allowance which they can then use
to lease, purchase or hire a vehicle.
Employers need to choose the most
appropriate solution for drivers,
whether that is an employee car
ownership scheme or traditional
company car, or a combination of
schemes to meet various needs. It
is a decision that is complicated by
maintenance management, as well
as health issues such as corporate
manslaughter and fleet risk. Issues
around health and safety are
usually associated with the cash
allowance scheme because here
the employee has the freedom to
choose his or her own vehicle, and their
choice may not necessarily be a correct fit
for the job in hand – do you want your top
salesman driving a high profile flash sports
car for instance? Cars are a very emotive
issue and many staff have left companies
simply to get a better car!
Although health insurance isn’t as
motivational as a company car, the day
is soon coming when all expatriates will
need some form of health insurance. The
institutions competing for this business will
often hack their rates to get the deal but
companies who choose their Group Health
scheme on rates alone at their peril.
Many employees leave companies because
their family is not covered adequately on
the company scheme. You can have the best
management in the world – managing and
motivating your staff, but if and when the
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THE INTERNATIONAL INDIAN