Employers, rethink your staff benefits and remuneration, says tax expert.
Tough economic times call for employers to find ways to compensate their employees better.
With the petrol price set to increase by an estimated R3 per litre in June, tax and remuneration specialist at Tax Consulting SA, Tanya Tosen says employers must have a proactive approach to their remuneration and benefits.
"Employers are feeling the ultimate pressure with the conundrum of how to remunerate employees more effectively to not only retain but also to attract talent into their workforce during these tough times," says Tanya.
She says employers should consider the following factors in adopting leading remuneration practices in the market:
CTC with flexible benefits remuneration structure
"This leading practice allows employees to adjust their selections whereby flexible benefits are offered in the employer’s remuneration structure, whilst maintaining the same cost for the employer."
The flexible benefits remuneration structure, Tanya says, also allows employees to elect more cash less benefits or vice versa to suit their personal and financial requirements.
Analysis of benefit offerings
"Remunerating employees to include certain non-cash benefits is only truly effective where these are valued," Tanya says.
According to Tanya, it is now crucial that employers re-assess and analyse their benefit offerings to ascertain whether money is being poured down the drain with benefits employees do not value, and whether the benefits being offered are aligned to market best practice and industry norms, or are just a nice-to-have.
Best price for benefits
"Employers should consider the costs of these benefits and the timing is riper than ever to now obtain competitive quotes for their benefit offerings. Where employers can obtain lower rates for their benefits, these savings may be passed on to employees in a cost to company structure, thereby increasing their cash portion," she says.
With careful planning and adopting some of the above strategies, employers should be able to control their employee costs while compensating employees in a favourable manner to assist in their cash flow.