Benefits should apply to blue collars as well

Society has conditioned us into believing that employee benefits are reserved for the “white collar” office worker. As such, companies design remuneration packages with additional benefits like group life and disability insurance, provident funds, medical aid, and funeral cover to help retain talent. HERMAN ENOCH, managing director for Euttopia Consulting*, explains why employee benefits should be available to all.

The general labourer is in many instances not offered additional benefits, but has to rather settle for an hourly pay rate package and is left to find any additional benefits on their own. This remuneration model has the potential to lead to discontent in the workplace, affecting the working dynamics and ultimately influencing the bottom-line profit of an organisation.

Employee benefits were formalised in the workplace around the mid-20^th century, with health insurance being one of the first benefits of this kind. Since then, there have been several additions, including statutory and common benefits like overtime pay, maternity and paternity leave, family responsibility leave, and retirement and provident funds. In South Africa, there are also a few statutory social contributions like the Unemployment Insurance Fund (UIF), Skills Development Levy (SDL), and Compensation for Occupational Injuries and Diseases (COID), addressing the social well-being of employees.

These benefits should not be seen as a grudge purchase but rather as an investment in an employee, reinforcing their value to the organisation. This not only keeps the employee committed to the organisation but also committed to the customers who, in turn, will remain committed to the organisation. An uncommitted employee can do extensive harm to the brand, leading to far more costs than simply losing that employee.

Employee benefits certainly come at a cost – either to the employer or the employee or, in most cases, both. This limits the offering to lower paid employees – who in most cases are the “blue collar” workers – and can have a significant impact on their “take home” wage.

This in no way should be interpreted as a reason not to offer any benefits to these employees. Employers should rather look at benefits that are affordable. Even more importantly, they should address the needs of their employees, who form the backbone of any organisation. A good offering in this space could include wellness or funeral benefits.

When discussing employee offerings with our clients, we see an emerging trend of companies looking for the cheapest possible premium if they do offer, for example, funeral benefits. The argument is that an “affordable” benefit is being provided.

Service providers pride themselves on providing cover that offers employees payouts of as little as R5 000 for a funeral, for which either the employer or employee pays a minimal amount. While it is commendable that companies are offering benefits, one has to ask: is this cover really adequate?

To answer this, let’s look at a few costs involved in a typical funeral. A coffin alone could set you back between R800 and R50 000, while a burial plot can range between R1 500 and R6 000. A tombstone can cost R1 500 to R7 000, and then there are still other costs to be considered, like the funeral parlour, transportation, flowers, catering, and an “after-tears” party.

Taking all of these costs into consideration, a funeral can easily run to upwards of R50 000. In a recent survey of participants in the construction industry, we found that it is common practice for employees to approach their company for financial assistance for the burial of a loved one. Likewise, if an employee passes away, their family will often approach the company for financial assistance. It is easy to avoid these situations by ensuring adequate benefits when choosing coverage for your employees.

Wellness programmes are also affordable benefits, with some programmes starting from as little as R8,26 per employee. These programmes offer online telephonic trauma counselling, as well as access to professionals in the fields of tax, finance, health, and education. These benefits are designed to improve your employee’s mental and physical health, leading to a more productive individual.

In conclusion, we need to break away from traditional views regarding employee benefits and diversify our offering to include all staff. Employee benefits need not cost an arm and a leg, but should be viewed in terms of the underlying contribution they can make to an organisation’s bottom line. If used effectively, these benefits can become an organisation’s first line of defence in the challenging times in which we live.

* Euttopia Consulting is a niche brokerage providing uniquely-tailored group benefit solutions for all employers.