Workplace benefits that outweigh fat pay cheques

Although salary package determines what one takes home and a worker’s ability to meet monthly expenses, there are many benefits provided by employers that give them financial advantages that far outweigh a fat pay cheque.

Comparatively, most employers providing competitive salaries or remuneration packages usually compromise on these benefits to attract potential employees who are motivated by higher salaries.

But as salaries increase in value, the amount of tax deductions also increase, reducing the purchasing power of the income earner.

But most benefits are often not subjected to taxation like salary incomes and carry a lot of financial advantages. Among the benefits are-
Saccos: Many employers have established savings and credit schemes at the workplace to offer their employees saving vehicles for their incomes.

These schemes encourage employees to channel regular contributions monthly towards achieving their financial goals during the time they are in employment .

The savings schemes also offer quick loans at favourable interest rates. They also give members the opportunity to access loans equivalent to at least a third of their accumulated contributions at lower interest rates relative to that offered by commercial banks.

As an investment vehicle, saccos encourage the spirit of prudent savings and financial- goal setting.

These days saccos also act as mortgage vehicles where members can mobilise their savings through the co-operative and get the financial power to purchase a plot and develop it for distribution to members.

Benevolent funds: In workplaces where benevolent fund is not established, whenever an employee is deceased, the bereaved families or his dependants are left to make their own arrangements to cater for the funeral expenses.

But a benevolent fund takes care of the funeral expenses for a deceased worker or his next of kin and a specified amount of cash benefit is paid to his dependants.

Medical cover : Although the medical cover plans is not given in liquid cash, it provides a financial advantage to the worker by helping him save on any cost that would be incurred from medical treatment.

Since medical expenses are never pre-determined, most employees are motivated by lower salaries, with medical benefits relative to higher salaries with medical plans.

In addition, most medical plans provided by employers have provisions for other family members, giving the covered an opportunity to save on any unexpected cost that would result from sickness.

In workplaces where medical cover plans are provided, employees do not feel any effect of increased cost of medical treatment or drugs as the employer takes care of the entire cost of treatment and medicine.

Group life covers: It is slightly similar to benevolent fund as it provides cash benefits to the dependent to cater for financial loss incurred through the death of an employee.

With the increased cases of terminal illnesses amongst employees, group life covers provide an avenue and a financial advantage for those with unstable heath conditions to acquire coverage without medical tests and at minimal costs.

Life policy taken outside the group life cover would attract high insurance premium interest rates which will change with age and deteriorating health.

Given this advantage, many employees have discovered ways of topping up their cover under the group life cover to meet their insurance needs.

Housing facilities: Housing facilities provided by employers have become an avenue to cushion employees from frequent fluctuation of rents that come with increased demand and other related costs such as water and electricity costs.

With the rising cost of living, most workers have shifted focus from the size of salary incomes to these benefits as they provide a cushion and enable them to save on their monthly expenditures.

Mr Opiyo is a financial consultant.