Perks are non-monetary benefits given to employees in addition to wages, salaries, and health/retirement benefits. Different from wages, salaries, and health/retirement benefits, it is often considered extras that are nice to have. That said, it can reduce employee turnover and attract top talent to your organization.
Types of perks companies give to their employees:
- Taxable perks: Some benefits provided by employers are taxable. These include rent-free accommodation, utilities (gas, electricity, and water), income tax withholding from employees’ salaries, reimbursement of medical expenses, and wages paid to household help.
- Exempted perks: Employers may offer various non-taxable fringe benefits to employees, including travel allowances and telephone lines. Other common examples include medical aid, sports clubs, health clubs, and refreshments during office hours.
Benefits of offering perks:
Offering perquisites to employees can be a great way to motivate them, which will help your business stay productive. Furthermore, it can attract top talent in the form of recruits.
- Turnover reduction: If you have high turnover rates, reducing them will be beneficial. Offering it such as professional development opportunities helps retain employees and make your company more competitive. Without these, you may find that your employees are drawn to companies that do offer them.
- Hire the best talents: It can be a significant factor in attracting new employees. If the salaries and benefits are comparable across multiple companies in the industry, it is often the factor that will make a prospective employee decide where to work. If your company offers more perquisites that applicants want, then your company will be able to attract more of the top talent available.
- Increasing productivity: By offering the right perks, a company can increase productivity. It can positively affect employees’ health and reduce stress. Many perquisites are designed to increase productivity. Morale improves, and the effect is even greater because employees feel valued.