Corporate Welfare Pros and Cons: How to Evaluate Convenience for Business and Employees
Determining the pros and cons of corporate welfare is the first step, for an organization, to understand if it is a really advantageous choice, and assess whether it is appropriate to implement a welfare plan or not.
Firstly, we need to assess the human and economic resources available, and secondly we need to weigh up the needs of employees. The welfare program is in fact by nature totally customizable; therefore, it is appropriate that the two parameters are in line with the plan that you decide to organize.
In the next paragraphs we see what are the benefits and disadvantages of corporate welfare for both employees and companies.
Corporate welfare: advantages for companies
As we also saw in the article dedicated to the differences between fringe benefits and corporate welfare, the benefits of adopting a welfare program also fall on companies, not just employees.
Among the tangible benefits of welfare is:
the opportunity to attract and retain talent: companies that offer beneficial benefits and services are more attractive to high-level candidates and are more likely to attract and retain key employees.
A productive environment: an employee who feels valued and involved, and is supported in the organization of their resources, is an employee who works more productively, as a rule.
Lower staff turnover: in a company where everyone feels supported, employees themselves are more inclined to stay for a long time, reducing the turnover that costs the company time and economic resources to form new figures.
A better social reputation: the implementation of a corporate welfare program is a positive signal for customers, suppliers and investors. It shows that the company cares not only about profits, but also about the well-being of its employees and the community at large.
Fewer cases of burnout and absenteeism: Corporate welfare programs that include psychological assistance or health promotion plans can help employees better manage their physical and mental health, reducing absenteeism due to stress-related diseases.
Tax relief: In some cases, which vary from sector to sector, you can access tax deductions regarding welfare costs.
Along with the benefits for companies, there are of course also those for employees, who are the real recipients and beneficiaries of corporate welfare. Let’s see them!
Corporate welfare: are there disadvantages for businesses?
The first point that makes the company welfare disadvantageous is of course the use of resources: it is an investment for the company and as such includes a waste of resources (time, money and professional figures) that must be put in place for the welfare program to be efficient.
In addition, there is also a minimum of administrative complexity to consider, as managing a company welfare program on an ongoing basis can also have impacts on administrative resources and lead to greater complexity in human resource management.
The regulations governing welfare programs, in fact, are complex and require a minimum of commitment from the company. You can overcome these difficulties by relying on companies that deal with these processes, but this is also a potential difficulty: knowing how to orient themselves in the choice of the right provider, that can intercept the needs of each "company population".
The limits of corporate welfare for employees: what are they?
While corporate welfare appears to only benefit workers, we can identify some limitations (not really disadvantages), which mainly depend on how the plan is implemented and managed within the organization.
Even in the worst case scenario, the disadvantages are minimized by both sides.
In this case, rather than real disadvantages, these are situations in which the employee may feel constrained in some choices. But let’s talk about choices that insist on benefits to your advantage.
Among these limitations of corporate welfare for employees are:
- Restricted Personal Choices: The company offers certain services or benefits within its program, which however may not be in line with each employee’s personal preferences.
For example, it could only offer a certain health insurance or childcare services that do not meet the needs of all employees.
- Inequality and/or inequity: the company welfare is usually proportional to seniority and the levels of compensation of the various collaborators. Therefore, some workers may receive more generous benefits than others (but this also applies to the compensation of each worker, it is the logic of things).
- Company dependency for essential services: If the company offers essential services such as health care or accommodation, workers may be in a vulnerable position if such services are interrupted.
- Deductibles and expenses not covered: Although corporate welfare programs offer free benefits, there may be "costs not covered" by the workers' welfare plan. For example, health care programs may incur additional costs in terms of unpaid deductibles or medical expenses.
Per concludere, possiamo affermare che, se gestito efficacemente, il welfare aziendale comporta unicamente vantaggi sia per le aziende che per i loro collaboratori.
È difficile e sbagliato, infatti, parlare di svantaggi. Semmai ci sono alcuni limiti, rappresentati naturalmente dai confini del piano welfare strutturato dall’azienda.
Per i lavoratori, comunque, si tratta di benefici con forte impatto economico.
D’altro canto, per l’azienda, nonostante vadano affrontati investimenti di risorse per l’organizzazione e la gestione dei programmi welfare, il tornaconto in termini di vantaggi fiscali e valorizzazione del personale sono indubbi e superano di gran lunga il costo degli investimenti da sostenere.
Proprio per ridurre le limitazioni che i collaboratori potrebbero percepire, è importante personalizzare il programma di welfare, in base al settore e al contesto sociale in cui opera l’azienda, alle esigenze dei suoi dipendenti e alle risorse disponibili, così da massimizzare i benefici e minimizzare gli svantaggi per entrambe le parti.
Per saperne di più sul welfare aziendale, contattaci!