What is employee benefit? What is the role of employee benefits for businesses and employees today? To answer that question, please follow the article below on Viindoo to have the best overview!
What is employee benefit?
Employee benefit is a collection of direct and indirect policies and insurance related to the safety, mental and physical health of employees in the company.
The remuneration and benefits of employees are enjoyed in accordance with the provisions of the Law. In addition, businesses often develop their own employee benefit and employee remuneration policies to match the size, culture, and needs of employees as well as the financial capacity of the business.
The most basic and mandatory benefits that businesses must ensure for employees include:
- Social insurance
- Unemployment benefits
- Health insurance
- Accident insurance
The above insurances also include the support regimes such as benefits for sickness, work accidents, occupational diseases, maternity, retirement, and death.
Why do businesses need an employee benefit fund?
Employee benefit plays a vital role for businesses and employees. To explain that, please read the following content of Viindoo:
The full application of employee benefit policies means that the business complies with the provisions of the law.
Secondly, besides salary and bonus, employee benefit is also a factor that candidates prioritize when looking for a job. An enterprise with a good employee benefits policy will attract and retain employees and increase its reputation, thereby significantly saving costs for recruiting.
Thirdly, employee benefits policies also help foster the workforce for businesses. The feeling of assurance for both themselves and their families makes employees feel secure, thereby reducing absenteeism, and improving the work morale and satisfaction of employees.
Fourth, employee benefit also helps employees feel cared for and respected. Therefore, businesses will build employees’ trust and loyalty. The relationships within the organization will be increasingly improved, enhancing the businesses’ core values. Therefore, employee benefits are indispensable in businesses.
Firstly, with employee benefits, employees can receive support payments directly or indirectly through insurance packages or employee benefit services and activities. These packages of money help to up-level employees’ lives.
Secondly, when employees are cared for with reasonable employee benefit regimes, they will strengthen their mental health, and reduce anxiety and stress in daily work.
Thirdly, employees who have life insurance and disability insurance are backed up with additional income security in the event of serious illness or disability. As a result, employee benefits policies help employees feel more secure as they and their families are protected, thereby improving and enhancing work productivity.
Fourthly, in addition to improving mental health, employee benefits also support the workers’ physical health. Employees who receive timely medical care will also reduce sick leave and better focus on work.
Finally, the employee benefit regime also promotes a healthy, harmonious, and stable working environment, thereby enhancing and connecting the relationship among employees.
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Types of employee benefits
Currently, there are two main types of benefits, which are compulsory and voluntary benefits. For example, in Vietnamese businesses, the compulsory and voluntary benefits are:
Mandatory benefits are the minimum benefits that businesses must provide to employees as required by law. According to the Vietnam Labor Code and the Law on Social Insurance, the employee benefit regime requires 5 types of social insurance as follows:
- Sickness allowance.
- Occupational accident/occupational disease.
- Death benefit.
Mandatory benefits are to ensure physical and mental safety for employees or their families in unfortunate cases such as partial/ entire reduction of working capacity due to illness, maternity or accident, end of working age, and death.
In addition, businesses also need to pay full health insurance for each employee in accordance with current laws.
For example, Vietnam Social Insurance stipulates the payment rate for participants of social insurance, health insurance, occupational accident, and occupational disease insurance, specifically as follows:
|No.||Payroll computes||Rate of deduction to enterprise||Rate of deduction to employee's payroll||Total|
Businesses are on behalf of employees to deduct the insurance from their monthly salary into the above funds at the rate of contribution of 32%. In addition, the business also pays 2% of the Union Funds to the District Labor Confederation.
Currently, the social insurance fund is specifically allocated as follows:
- Businesses pay social insurance contributions at the rate of 17.5% with
- 3% of sickness and maternity fund
- 0.5% of occupational accident and occupational disease fund
- 14% of pension and survivorship fund
- Employees will pay 8% social insurance rate to the retirement and survivorship fund.
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Besides mandatory benefits, many large enterprises also provide voluntary employee benefit policies. These are employee benefits that the organization or business will offer based on the financial capabilities and policies of the leadership.
A typical example of a voluntary benefit nowadays is purchasing health and life insurance for employees and their relatives.
Besides, some other popular voluntary benefits provided by businesses to employees include:
- Attractive bonus scheme
- Annual salary increases
- Company trips
- Periodic health check
- Stock bonuses
- Allowance for OT (overtime), holidays
- Work equipment allowance, accommodation, and many other benefits.
- Some types of training such as internal training,...
In addition, some businesses also provide many different types of benefits depending on the needs of employees such as transportation costs, daily lunch, etc. Besides, many businesses also focus on providing benefits related to the mental aspects of employees such as gym, spa packages, etc.
Popular employee benefits in businesses
What are the most common employee benefits of businesses?
In the age of technology, employees do not necessarily work directly together. Many businesses have created opportunities for employees to work flexibly.
Employees do not need to come to the company but can perform work at home or anywhere, as long as they achieve good results, efficiency, and effectiveness on time. This will help employees optimize their time for traveling and the costs of petrol, vehicles, etc.
Currently, businesses have implemented many wellness programs for their employees. This implementation will help employees reduce stress at work, helping to keep the body and mind in the healthiest and most positive state.
Regulations on clothing
Nowadays, many organizations also enable their employees to freely express their personal style in casual outfits, as long as it does no harm to the corporate culture. This also helps businesses reduce the cost of uniforms.
Many businesses now also provide free lunches, so that their employees do not have to go out for lunches. This saves rest time for employees, thereby increasing productivity.
In addition, the relaxation of regulations on eating and drinking at work is also one of the factors that help increase internal cohesion among colleagues in the company.
Recognizing and warding employees for their efforts is necessary for developing a good team. Words of encouragement can be a strong motivation for employees, motivating them to strive harder. This also helps to build an internal culture of striving and positive development.
Thus, hopefully, businesses have more information about what is employee benefit as well as the role of benefits. Don't forget to follow Viindoo so you don't miss other interesting articles!
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