Top 5 common and costly employee benefits mistakes
There are numerous employee benefits mistakes that most Human resource managers make. We break down these common mistakes and offer a way out for your company.
One of the biggest challenges you will ever face as a company is managing your employee benefits. Let’s face it, one of the reasons why you were able to hire the right talent was the promise of a good salary and befitting benefits.
Unfortunately, it is easy to make mistakes as you strive to build an attractive employee benefits package, and here is a closer look at what to avoid.
The right to enjoy employee benefits
Employment & labor laws and regulations have become tougher as the government strives to create better work environments across all industries. This means that regardless of the industry you are in, your employees have a right to employee benefits. These benefits fall under four major categories, namely:
- Medical benefits
- Life insurance
- Disability benefits
- Retirement benefits
All these employee benefits need to be carefully and professionally managed as the slightest mistakes can prove to be too costly for your company. Here are the common mistakes most human resource managers tend to make.
Top 5 employee benefits mistakes that companies make
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Failure to make timely deposits into qualified plans
There is always so much for you to handle as an HR manager, but that should not be an excuse to be making late payments into qualified employee benefits plans. This is a problem that is largely caused by administering your employee benefits manually and has always proven to be costly.
Generally, failure to make timely payments, especially for government-mandated employee benefits, will lead to penalties or levy fines. On the other hand, it can also lead to employment and labor relations cases by your employees or labor unions.
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Late enrolment of new employees into qualified plans
Another common mistake that most companies make after hiring new employees is failure to enroll them into the right plans instantly. This might seem like a small problem that you can resolve ‘before it is too late,’ but it often jeopardizes your employees’ status.
The wrongful exclusion of new employees into their qualified plans also affects how they benefit from these packages.
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Not keeping up with the latest government updates on employee benefits
As an HR manager, it is critical to always be in touch with the advancements and changes in the labor market. The continuous introduction of new labor laws and policies worldwide has become the defining standard for handling employees.
A particular area of interest has always been employee benefits as the need to offer workers better terms becomes essential.
In turn, it is mandatory to know and understand the latest regulations on employee benefits. This helps to avoid any compliance problems with the government, which are always too costly. One of your top objectives as an HR manager should be to ensure that the right labor laws and policies are adopted within the time frame provided for your company’s good.
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Failure to properly distinguish the benefits of your permanent and contract staff
While tailoring your employee benefits packages, you need to consider how best it suits your permanent staff and employees on contract terms. Permanent staffing is generally more costly, and it is only right to pay more attention to the talent you want to keep for the long term. However, you cannot ignore the vital role of your contract employees who are equally as important.
But, you need to draw a line about what each group needs to legally and rightfully gain regarding employee benefits. Failure to do this could see you deal with problems such as misclassification, under or overpayment on different plans, and insurance loss.
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Not utilizing the power of voluntary benefits
Voluntary benefits offer companies an open gate to improving employee satisfaction, reducing turnover, and increasing employer-employee engagement. It is a pity that this resource is not fully tapped into at a time when companies are struggling to reduce turnover.
The winning edge that comes with tapping into voluntary benefits is it allows your employees to enjoy more and better benefits at a lower cost. Instead of individually shopping for benefits like short-term disability insurance or dental and vision insurance, the company offers a group deal at a discounted rate.
Under a group plan, employees get to pay for these extra benefits but enjoy the lower rates courtesy of your efforts as the employer. This is a foolproof approach to solidifying your workforce and improving the company’s image, which helps avoid the costly impacts of an unhappy workforce.
Making the right employee benefits decisions
You need to take the best care of your employees if you want the pleasures of having a happy workforce that effortlessly delivers on its mandate. How you manage employee benefits is an important cog in the wheel that helps in driving your company forward.
At Mindsoft India, we understand that there are so many challenges faced by any company committed to creating and maintaining an efficient employee benefits package. As a recruiting agency, we are out to help you avoid these common and costly employee benefits mistakes for zero staffing problems and the creation of a better work environment.
