In the past, it is likely that employees were driven by high salaries and monetary rewards. Since the pandemic, priorities have changed for many people. Working from home has meant that people have had the opportunity to spend more time with family and have been able to appreciate a more flexible way of working around their life, rather than fitting their life around work.
Research has found that now the job market is about what companies can offer prospective candidates rather than what candidates can offer the organization.
As such, it is probable that when employees are seeking work, they are not only focusing on how much they will be paid but what other benefits or perks they are able to receive and whether they align with their lifestyle.
Prospective employees may be looking for employers that allow them to work flexibly or that provide healthcare for instance. It is certainly a task for employers to offer attractive benefits packages that are appropriate for their ideal target employees as some may not appeal to certain people.
The pressure is on for organizations to provide extra perks to attract talented individuals. In-kind benefits or non-mandatory benefits are a tool for employing the best people and having leverage over other organizations that they may be competing against for these people.
Not only this, it is said that the success of a business is not just dependent on customer satisfaction but also employee satisfaction, as these are the ones providing the service to the customers. Therefore, providing good employee support is essential to productivity within the workplace. An effective way of enhancing an employee’s experience within a company is by offering additional benefits to show that they are valued.
What is the definition of “in-kind benefits”?
In-kind benefits are compensation or reward benefits that are separate from an employee’s salary and additional to core benefits that companies must provide by law. Also known as “fringe benefits” they are not included in an employee’s paycheck but often have a monetary value.
Benefits in kind or in-kind benefits are non-mandatory benefits such as having a company car, health insurance, or life insurance. Core benefits vary depending on the jurisdiction but may include things like vacation entitlement or pension contributions.
It is fairly common for employers to offer in-kind benefits to their employees as it is a good way to attract and retain workers. In a world where many highly qualified and talented employees have the option to work wherever they want, it is often in the best interests of organizations to offer attractive benefits packages so that they can stand out from other organizations.
Not only this but offering additional perks to the core benefits that are already provided by law can boost employee motivation, increase productivity and keep staff happy.
Some in-kind benefits can be offered as ways of enticing new starters and they can also be used as a tool for rewarding staff that have been with the organization for some time. Some companies offer extra bonuses for long-term staff or give an extra day of vacation leave for every year that an employee has been with the company. It is a good method of maintaining hardworking employees and keeping team morale high.
What are the most common in-kind benefits?
The most common in-kind benefits are those that help to assist the employee to do the job or that give them the feeling of security such as having a company car or a company mobile or cell phone. Additionally, other common benefits are things like health insurance, life insurance, and retirement advice. The most common taxable in-kind benefits are tuition or education expenses and a company car.
Other benefits in kind can include the following:
- Healthcare benefits such as counseling, mental wellness support, or advice
- Gym memberships, sports, or yoga classes
- Options for sabbaticals
- Flexible working arrangements such as work-from-home options
- Childcare benefits
- Allowances for travel expenses or meals
- Insurance
What is the best way of managing employee in-kind benefits?
Once legal obligations have been met, it is important to consider which extra perks can be offered to employees, as already mentioned, it is a recruitment strategy that can help attract skilled workers.
Managing employee in-kind benefits can be a tricky task for companies that operate in multiple jurisdictions as each country has a different tax policy including which benefits are taxable and how to calculate the tax on them. It is important that companies correctly manage benefits in kind in order to comply with local laws.
Hiring a global PEO can help to alleviate this burden. A global PEO can hire workers from around the globe on behalf of companies. This can be a good solution for companies that are expanding to other countries. They may face problems with understanding local laws or experience hiring delays as they try to arrange benefits for prospective employees.
A PEO can help by using their expertise and commercial relationships to efficiently hire skilled workers so that companies have exactly the type of people they need for the business to succeed. This includes putting the right mandatory and non-mandatory benefits in place and ensuring that the correct tax is being calculated for each employee benefit.
Furthermore, Global PEOs have local employment knowledge which is useful because a problem for many companies that expand to international locations is that they do not know how to benchmark things like rewards and benefits. It can be hard to stand out from other employers that are recruiting ideal candidates when it is uncertain whether what you are offering is competitive or not.
Conclusion
The importance of in-kind benefits is linked to the concept of employee value proposition which is the value that an organization brings to its employees in return for the value they give to the organization. In a world where employees are able to pick and choose which employers are right for them, it is a good idea to offer extra perks separate from the salary to attract talented individuals and retain reliable workers– whether your staff are at the office or working remotely.
At Horizons, we can support businesses internationally by managing employee benefits. We can ensure that you are complying with local laws and regulations including when you provide mandatory benefits and in-kind benefits to your employees.
If you would like assistance, please contact one of our experts to see how we can help.
![What are In-Kind Benefits? [Quick Guide] (2024)](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAEAAAABCAQAAAC1HAwCAAAAC0lEQVR42mP8/h8AAvMB+NzmkbcAAAAASUVORK5CYII=)
