Are you planning to change your employees’ benefits packages? Then you’re probably asking yourself what benefits you need to cut from your benefits plan. Here’s the more important question though: what benefits shouldn’t you cut?

Employees Love Their Benefits

A Wharton scholar has this to say about cutting employee benefits:
“Once you have a perk, to take it away is seen as a violation of a psychological contract you have with your employee.”
Scholars have found a link between taking away worker benefits to productivity at work. Workers became less productive after their perks were taken away. They also suggested that some employees may even show retaliatory behavior once their benefits are removed. You’ll even meet employees who consider their benefits just as important as their salary.
It’s clear that employees value the benefits they receive from a company. For employers, this could even determine whether a worker would stay at their job or leave.
Take a page from Google’s book. An increase in their daycare program left employees bewildered and even betrayed. The cut – and employees’ reactions – reached the media, who called it a blunder on Google’s part.
As an HR professional, can you still cut benefits – even if you have no choice?

The Benefits Package Dilemma

Your company doesn’t have much of a choice. To ensure company growth despite changes in the market, cutting some benefits might be necessary. You know you have to make adjustments for a new benefits package. A lower budget and an increase in head count are often what lead to some cuts in your current benefits.
You’re at a crossroads. Do you keep as many benefits as possible but risk long-term company growth? Or do you adjust according to the new budget but risk losing your hardworking staff?

Employee Benefits You Have to Keep

Benefits Mandated by Law

The first thing you can’t cut from your employee benefits program are those mandated by the government. In the Philippines, there are six basic benefits that all employees are promised by law. The six are as follows:

  1. Social Security Systems (SSS) Contributions.

As an employer, you and your employees have to contribute to social security benefits. These social security benefits include protection against hazards like sickness, disability, maternity, and etc. The amount you have to give depends on the employee’s monthly salary.

  1. National Health Insurance Program (NHIP) Contributions.

Like the SSS, you and your employees also have to contribute to the National Health Insurance Program. This covers the medical insurance of your employees. This is administered by the Philippine Health Insurance Corporation or Philhealth. Also like the SSS, this depends on each employee’s monthly income.

  1. Home Development and Mutual Fund (HDMF) Contributions.

By law, an amount of at least 100 pesos should go to the Home Development and Mutual Fund program or Pag-Ibig. The fee is deducted from your employees’ payroll and remitted by a certain schedule.

  1. 13th Month Pay.

One benefit unique to employees is the 13th month pay. This provides employees with a bonus salary every December. The amount of the bonus is equal to your employee’s monthly salary.

  1. Service Incentive Leave.

This law mandates that employees receive up to five paid leaves in a year. This applies to employees who have contributed at least a year’s worth of service to your company.

  1. Meal and Rest Periods.

In an eight-hour work day, you’re required to give your employees time to rest every now and again. At least an hour of the working day belongs to your workers’ meal breaks, such as lunch times.

Healthcare Benefits

Cutting the healthcare benefits of your employees could put you in a compromising situation. Because this is a benefit most employees value, cutting these perks could make them want to leave. This is especially true for those employees who do not earn a lot per month.
One solution for you can be looking for alternatives that offer the same perceived value. These can be different providers who offer the same benefits at a better value for employees. You can even find ways to integrate programs that encourage workers to take care of their health. Some companies turn to insurers who offer value-added programs. Examples are smoking-cessation and weight-loss programs.

Retirement Benefits

Retirement isn’t an immediate concern for most employees. But that doesn’t mean they don’t value their retirement benefits. Nobody wants to retire penniless.
Unlike healthcare, it may be easier to make adjustments to this kind of benefit. You might be able to find lower fees in retirement contributions. Be sure to ask about every possible action step available to you. If you need to adjust, you might not have to cut retirement benefits altogether.

Workplace Flexibility

Paid leaves are valuable for your employees. They feel safer when they’re able to file leaves in times of sickness or emergencies. Even getting time to take a paid vacation means a lot to workers.
Cutting this benefit from them may tempt them to move to a different company. When you take away paid leaves, your employees will feel restricted. Leaves allow them to rest or recover from stress. Employees should be able to take leaves without fear of losing out on salary.

Making the Right Adjustments to Your Benefits Plan

Now that you know what benefits you should never cut from employees, it’s time to take the first step. You’ll have to be certain which perks are most valuable to your workers. The best solution?

Ask your employees.

Conduct a simple survey. See how employees regard the current benefits plan you’re giving them. Be transparent about plans to make new packages. Tell them why these changes are necessary. Allow them to offer solutions as well.
After all, transparency in the workplace develops employee loyalty. Your employees will tend to stay regardless of company changes if they’re loyal.



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