Please think twice before cutting employee benefit

2022-08-07
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Please think twice before cutting employee benefits in times of crisis.

case:

time flies. In the twinkling of an eye, at the end of the year, President Wan of company a will be busy with the annual summary. Looking at this year's report, Wan Zong couldn't help worrying

a company is a state-owned transformation enterprise, which was the tertiary industry of a large textile group before the transformation. After the transformation, company a will continue to operate import and export business with full shareholding; Among them, business transactions with European and American markets account for the vast majority of the company's business share. In recent years, due to the good overall market environment, the turnover of company a has increased by 20% for three consecutive years

however, after 2008, the "subprime mortgage crisis" intensified, causing a global "financial tsunami". The appreciation of RMB has had a great impact on the import and export business of company A. this year, less than 70% of the business volume has been completed. However, the company's various expenses have not decreased due to the decline of business volume. After deducting various business expenses, management expenses, labor expenses and financial expenses, the company's breakeven operation is difficult to maintain

the "financial tsunami" is not able to complete the preparatory work before HR ⑴ 50A Rockwell hardness tester test in a short time. If this situation continues, company a may face a survival crisis. So how can we get through this dilemma and slim down for the winter? Of course, it is to increase revenue and reduce expenditure. How to save money? Mr. Wan focused on the expenditure of welfare

in recent years, the overall business environment of company a is good, so the current situation that there are many types of welfare items before the transformation continues, including welfare housing distribution, education, medical insurance, commercial insurance, overseas travel, outward training and other items. The annual cost of welfare expenditure of company a accounts for about 30% of the total labor cost. In addition to the salary positioned at the medium level of the industry, the overall human cost expenditure of company a is about 15% higher than that of its peers. However, most of the employees are still dissatisfied with the salary and think that the salary level is lower than that of their peers

after systematically analyzing the company's business status and market environment, Mr. Wan believes that compared with peers, the company's labor cost is significantly higher; From the perspective of the structure of human cost, it is mostly in the various welfare expenditures of enterprises. He believes that in order to make the enterprise competitive, we must first control the human cost, and we must reduce the human cost to the same level as the competitors. Since employees don't feel much about welfare, it can be proved that welfare can't play an incentive role. It's better to use this part of expenditure to pay bonuses and improve the overall wage income, so that employees won't say that the wage level is low

he instructed the human resources department to cut down the welfare budget as much as possible and only retain limited statutory benefits. As soon as the document was released, the employees talked about it. Most employees say that now it has become capitalism. The company has no human feelings at all. They are thinking about how to make money all day. How can such a company survive. Some headhunting companies even began to contact key employees of the company. Mr. Wan was also very confused when he saw this situation. Is it right for me to cut benefits like this

what are employee benefits? What is the role of employee benefits

the so-called employee welfare refers to all indirect economic remuneration received by persons who have the company's employee qualification within a period of time. It is an indirect form used to improve employees' work and personal life quality. Here, it should be emphasized that certain types of benefits are given to special groups of employees in the enterprise, such as restaurants, company cars, company housing, etc. used by management personnel. These benefits should not be confused with employee benefits. In this paper, our research object is employee welfare, which can be applied to almost all employees of the enterprise

as an important part of the salary system, the main objectives of the welfare system should also be consistent with the salary system. That is, influence the individual to make his behavior meet the organization's expectations. Because employee benefits are inclusive, its growth is based on membership rather than performance, that is, employees of the company can obtain them regardless of their performance. Therefore, from the incentive point of view, although welfare has a lot of costs, it can not stimulate anything except the lowest acceptable level of performance (enough to retain the performance level of the job)

however, welfare has other functions. From the perspective of enterprise recruitment and retention, the welfare policies of enterprises can affect the attractiveness of enterprises to individuals. A study of several companies shows that employees believe that welfare is an important factor to attract them to enter the current enterprise and stay. Because welfare can meet the needs of employees for safety and security, so that employees can obtain safety and security in the existing employment environment, rather than leaving the enterprise for other employment opportunities. If the welfare planning of the enterprise is reasonable, the cost of job hopping may be extremely expensive, and the opportunity cost of job hopping may be twice as high as the salary obtained in the first year of the new company. It can be seen that the company provides a variety of benefits, which can attract people in short supply and keep them in the company. In addition, welfare can also provide tax relief, save personal income tax expenditure, and actively promote enterprises to establish a good social moral image

to sum up, welfare, especially employee welfare, is an important part of the total salary income of employees; However, it is different from the effect of compensation in guiding employees' behavior

1. The foundation of welfare growth lies in the growth of employees' seniority, which plays a good role in attracting and retaining employees; The incentive effect is small

2. Welfare has the characteristics of rigidity (rising but not falling). When designing the welfare system, enterprises should fully consider the impact of various factors including market factors and their own affordability, so as to avoid the ups and downs of employees' welfare. You should know that the negative impact caused by the cancellation of a benefit is far greater than the cost savings caused by the cancellation of the benefit. This requires us to plan carefully when setting up welfare programs. However, about 80% of the benefits are determined subjectively by the top management of the enterprise

3. Welfare is indirect reward; Employees' perception of benefits is not as direct as that of wages. "More than 75% of employees can claim less than half of the benefits they actually enjoy"; It often causes the enterprise to spend money, but the employees have no sense of helplessness

4. Employee benefits are legally binding. The individual welfare items of employees can be divided into two categories according to the regulations of the government. The first category is mandatory welfare, which must be implemented by enterprises according to the standards set by the government, such as endowment insurance, unemployment insurance, medical insurance, work-related injury insurance, housing provident fund, etc. The other is the welfare projects designed by enterprises themselves, such as personal accident insurance, medical insurance, family property insurance, tourism, clothing, meal allowance or free working meal, health examination, club membership fees, providing housing or house purchase support plan, providing buses or reporting certain transportation expenses, special allowances, paid holidays, etc. The following table summarizes the common welfare types at present:

category I: financial welfare

category II: paid leave

category III: living subsidy

category IV: welfare facilities and services

social endowment insurance

legal holidays

communication subsidy

labor protection

social unemployment insurance

special leave

housing subsidy

internal health care services

social maternity insurance

marriage leave

holiday consolation money

commuter transport

social work injury insurance

funeral leave

travel subsidy

accommodation

social medical insurance

maternity leave

food subsidy

meals

accident insurance

lactation leave

transportation subsidy

recreational and sports activities

housing provident fund

work-related injury leave

medical mutual aid fund

recreational activities

enterprise supplementary endowment insurance

sick leave

special welfare fund

department activities

employer insurance

training leave

education and training subsidy

birthday activities

additional commercial insurance

flexible working system

newspapers/books subsidy

free travel

credit deposit

-

external health care plan

interest free housing payment

-

-

recuperation plan

preferential stock purchase right

-

-

-

is in progress In the case of chapter, Mr. Wan made the following mistakes in decision-making:

1. He ignored the indirect and hidden characteristics of welfare: although compared with peers, the welfare plan of company a is quite comprehensive, and the enterprise also pays a lot of costs for it. However, a relatively transparent disclosure mechanism has not been established, and employees are not clear about their own benefits and the costs paid by the enterprise

2. Ignoring the rigid characteristics of welfare: the historical characteristics of the enterprise should be considered in the setting of welfare items. Welfare can be increased but not decreased. Cutting welfare expenses may result in the lack of employees' sense of safety and security. Some employees regard the reduction of benefits as a signal of layoffs and business depression, causing public unrest

3. Actions are not planned: welfare items are not planned and are set at will; It is also optional to delete welfare items. There was no extensive investigation and opinion seeking. Although Wan's overall motivation was good, the result was not satisfactory

countermeasures:

in order to effectively regulate employee welfare projects, so that welfare projects can truly meet the development needs of enterprise management, enterprises must establish a perfect welfare management system

I. The establishment of the welfare management system must follow the following principles:

appropriate: the welfare level of the enterprise should be competitive with the outside world and not lag behind other enterprises of the same industry or type; Internally, it needs to meet the strategic requirements, scale and strength of the enterprise

reasonable: comply with relevant national laws and regulations and respect corporate culture

applicable: it can meet the needs of enterprises and employees, which is what employees really need

payable: because the welfare can be increased but not decreased, each item of the welfare system should be within the scope of the enterprise's payable according to the enterprise's operating conditions and financial capacity

"generalized system of preferences": for basic welfare items, all employees of the enterprise shall have the right to enjoy them, which has nothing to do with ability, position and performance. (at the same time, the enterprise also sets up some benefits to give targeted preference to managers and core talents -- not belonging to employee welfare projects)

II. Operating procedures for establishing the welfare system: gradually establish the operating specifications of the welfare system in the order of welfare policy formulation - welfare planning formulation - Special Welfare management - welfare review and improvement, from general outline to details, from planning to implementation to improvement (as shown in the figure below)

when operating in accordance with this operation specification, special attention should be paid to the following links:

formulate the welfare strategy of the enterprise: the general manager usually organizes the human resources department and the finance department to preliminarily formulate the human resources strategy of the enterprise with overcurrent, overvoltage, overspeed, overload, limit and other protective devices, and submit it to the board of directors for approval. The formulation of an enterprise's welfare strategy should mainly consider: the enterprise's strategic development plan/objectives; Enterprise human resource planning; The bearing capacity of the enterprise and other factors; Generally, the benefit strategy should be valid for 3 years

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