Corporate welfare is an increasingly relevant topic in the field of human resources and company management, as it is an aspect that impacts on multiple levels: it can make the difference in terms of employee satisfaction, employer branding, HR costs and benefits tax
But how does corporate welfare work for the company? What are actually the concrete advantages in introducing this system and how to address the issue of taxation?
In this article we will focus on welfare from the point of view of the company and the employer, therefore analyzing in practice the benefits that this system offers for companies, naturally also taking into consideration the tax aspect.
How does corporate welfare work for the company?
Corporate welfare - as we have already explored here- is a set of initiatives and services offered by a company to its employees beyond the simple salary.
Welfare can therefore include benefits such as, for example, health care, training support, reimbursement of daycare expenses, meal vouchers and many other benefits, aimed at improving the quality of life of employees.
But it's not just the collaborators who gain: is there an advantage for the company?
From a practical point of view, corporate welfare, by helping to improve worker satisfaction, can help raise the level of loyalty to the company and general satisfaction with the work being carried out, potentially reducing human resource turnover rates.
A satisfied employee (at work and in private life) is statistically also more motivated and productive; which can lead to greater efficiency and better quantity and quality of work.
Furthermore, a robust welfare program can also help attract new talent, making the company a more attractive place to work; but we'll talk more about that shortly...
The advantages of welfare for the company, also in terms of employer branding
One of the main benefits of corporate welfare is its positive effect on employer branding.
Employer branding is a human resources management strategy that focuses on building and promoting a positive and attractive image of the company as an employer.
In other words, it is the process through which a company seeks to position itself in the labor market as a great place to work, in order to attract and retain high-quality talent.
When a company is committed to improving the quality of life of its employees through a series of benefits, such as healthcare or work flexibility, it cannot help but create a positive image of itself, thanks to a better reputation company and the word of mouth that this naturally triggers.
Even from the point of view of costs related to human resources, welfare offers a great advantage for the company: it can in fact contribute to reducing costs related to absenteeism and employee illnesses (motivated employees are less likely to be absent; they are more happy at work)
By also offering prevention and health care services, the company can see a reduction in the number of working days lost due to illness, thanks to greater care of the health of its staff (in addition to the undoubted benefits that greater motivation and well-being can have on body and mind of all workers).
This can have a direct impact on productivity and the costs of replacing absent employees.
How to introduce welfare into the company
The implementation of corporate welfare requires a well-defined strategic plan.
First of all, it is essential to conduct an analysis of employee needs to understand which benefits are most appropriate and desired.
Subsequently, it is necessary to establish what the budget dedicated to these programs will be and therefore define the company policies relating to welfare.
Once the program has been implemented thanks to the support of welfare sector professionals, it is equally important to communicate it clearly to employees, explaining it, welcoming criticism and feedback, to maximize its benefits and gradually improve it. In fact, communication plays a central role for the success of a corporate welfare plan, as reported by the VI Censis-Eudaimon Report, corporate welfare tools are well known by only 19.8% of employees, broadly speaking by 45.1 %, while 35.1% are unaware of it.
Finally, it is essential to constantly monitor the effectiveness of corporate welfare through feedback and evaluations, in order to make any improvements.
How is welfare taxed: how much does welfare cost the company?
Corporate welfare taxation is a crucial aspect to consider.
In Italy the tax treatment of benefits is quite clear: benefits are tax-free and do not contribute to the formation of income if they do not exceed the thresholds imposed by law. Taxation is only applied when a given spending margin is exceeded. It is therefore essential to consult a tax expert or accountant to understand how corporate welfare can influence the tax situation of the company and its employees.
“Welfare contributes to increasing productivity and turnover. In 2021, the profit of SMEs with a high level of welfare was double that of those with welfare at a basic level (6.7% versus 3.7%).” SOURCE: Welfare Index PMI
What do the Censis statistics say about corporate welfare?
The Censis statistics on the use of corporate welfare in Italy provide an interesting picture of the current situation.
According to the most recent data, an ever-increasing number of companies are already adopting welfare programs in order to improve the quality of life of their employees.
“Forty out of one hundred companies implement involvement initiatives such as collective or individual meetings, and more rarely surveys. The involvement index is directly proportional to the level of welfare achieved: it goes from 21.5% of companies with an initial level of welfare to 75.6% of those with a very high level." SOURCE: Welfare Index PMI
This suggests that companies are increasingly recognizing the benefits of corporate welfare, both for employees and for the company itself.
If you are interested in learning more about the data and the adoption of welfare solutions in Italy, we recommend reading the annual Censis-Eudaimon reports on corporate welfare!
In conclusion, we can therefore say that corporate welfare is undeniably a tangible opportunity for companies; for tax purposes, to improve the well-being of employees and to consolidate its reputation as a reliable and quality employer.
Precisely for this reason it is good to remain constantly informed on the continuous news and regulatory updates on welfare, so as to reap the evident advantages related to it year after year.
Relying on a specialized company like Eudaimon facilitates and speeds up all the aforementioned steps, avoiding common errors and customizing the welfare program to the highest degree, so as to offer a truly high-quality plan appreciated by the entire company.
Contact us without obligation for an initial consultation.