Glossary: HR & Recruiting Definitions
Benefits and incentives are given to employees as part of bonus compensations. Employees not only receive their salary but are also offered various benefits and rewards from the business. Offering these is a great way to motivate employees and showcase your appreciation for their work.
These are two common terms that you may have already heard of. However, they are often confused as synonyms, but don’t let that fool you. Let’s look at the definition of both terms and see their similarities—but also their differences.
The term benefit (often referred to as employee or corporate benefit) refers to additional non-monetary rewards employees receive in addition to salary. They facilitate and improve employees’ daily lives and help them meet their individual needs (more below).
Offering employee benefits makes it easier for employers to attract and retain employees. It makes the company more attractive as a place to work and it helps increase the motivation and satisfaction of employees.
The term incentive refers to rewards, either monetary (bonus) or non-monetary (some kind of benefits), that employees can earn by achieving good results at work.
A perfect example of this would be achieving specific sales targets or acquiring a certain number of new customers. Incentives are an excellent method for employers to encourage the team and improve their performance (“incentivise”).
An exciting incentive will increase employees’ motivation and urge them to work more efficiently, but also more happily. For example, offering a team event, a language course, a trip, or concert tickets for their favourite band can really incentivise an employee to work harder.
Benefits and incentives basically serve the same purpose: To motivate employees. Nevertheless, there are significant differences that HR managers should be aware of:
Particularly, young employees expect employers to do something for them (which doesn’t just mean regular salary payments and raises). They want to know from the start what benefits they get from working with your business.
According to a Statista survey, many employees nowadays choose where to work based on how well the company supports their lifestyle and how they will facilitate their everyday life.
A great way to get the attention from candidates is by communicating your employee benefits and soon-to-be benefits in your job advertisement. Furthermore, you can also add information regarding your business’ benefits to your career page.
However, benefits also influence whether the new employees are satisfied with their job and want to stay with the company long-term.
Thus, especially in the current era of the Great Resignation, they are a vital tool for retaining talent and keeping them in the company
Besides this, you can also benefit from several other valuable advantages (as mentioned earlier) if you can come up with an appealing benefits program tailored to your business. The following advantages include:
Depending on the type of company, team size, and industry, different benefits (and incentives) are possible. Currently, there are specific business benefit trends.
For example, benefits that improve the work-life balance are well-liked among employees. These include:
Benefits that serve personal and professional development are also growing in popularity. The world of work is constantly changing, and the fear of being unable to keep up is increasing. Therefore, the following are in high demand as well:
Due to the uncertain pension situation, company pension plans are also gaining popularity.
Additionally, personal and professional development benefits are also becoming more popular these days.
We present other popular benefits in our blog article “These corporate benefits are what employees really want”.
Are you in the process of setting up a benefits and incentives program for your company? Then you should definitely take a look at the following articles for more helpful information and ideas on this topic:
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