Factors such as age, lifestyle and experience make it difficult to analyse whether employees want more net pay or better benefits, but one thing is certain, there is no one size fits all solution.
 
What has become evident is that millennials are redefining employee benefits and that employers must find ways to adapt.
 
Millennials are a growing sector of the workforce, and so employers need to consider how their benefit or remuneration structure should change to attract and retain talent. Younger people may prefer to look for benefits which they can personally manage, as they are technologically better skilled. The trend is to want higher net pay with fewer “built in” benefits.  On the other hand, for the older generation it may be different, they might prefer more security with benefits, in the form of health care and retirement fund savings.
 
The labour force may also look for more net pay, as they are already battling to make ends meet.  Over 55% of South Africa’s population currently live below the poverty line, and in such cases taking care of immediate needs overrules things like saving for retirement.
 
Higher paid employees will most likely favor better benefits as they already have enough money to take care of the necessities.
 
The role of the economy in employees’ preferences
Things like economic downgrading, unemployment and retrenchment threats play an important part in the decisions made by employees.  South Africans are financially stressed, and when people have less money, things like retirement and healthcare will take a backseat, and left to be worried about at a later stage. 
 
The basic cost of living in South Africa is estimated to be at R5 544 a month, and with the proposed minimum wage of R3 500 per month, employees will still be struggling to get by, leaving no possible room for saving for their old age.
 
The most important benefits
Benefits, rather than salary taken in isolation, are a better predictor of employees enjoying their jobs. Employers strive to attract, retain and motivate a skilled, high performance workforce. If an employee is in the position to negotiate better benefits, the most important ones to look out for are retirement, risk and healthcare benefits. 
 
When considering healthcare benefits, flexibility in choice is key.  Employees should be able to choose their plan to suit their and their family’s needs. 
 
When looking at retirement benefits, it is important to have a risk component included as part of a retirement fund scheme. The way to go would be umbrella funds with flexible options as every employee has a different need depending on where they are in their life. The cost of disability and life cover benefits can be very cost effective in a Group Scheme, rather than if taken in a personal capacity. Choice, flexibility and equity is key in the benefits model offer so that employees can make choices depending on their needs that are constantly changing.
 
Employers must remain relevant to their employee benefit offering.
 
The employer’s role in assisting employees to make better financial decisions
Employers should provide financial education to employees to assist them in making the right choices for their future.  A responsible employer will offer compulsory savings in the form of a retirement fund and basic health care benefits. Enforced payroll deductions as part of an employment package are often the only way employees are encouraged to save or to mitigate risks. It is argued that you are less likely to miss money already subtracted than money you are expected to save after paying all your monthly expenses.  employers need to remember that even if it is an employees preference to have a higher net pay with less benefits, should trouble strike the employee they will look first to the employer for a “bail out”, and assuming the employer needs the employee back at work, they will be left footing the bill.
 
In the end it is very much up to the individual’s needs when deciding between better benefits and higher net pay, and no employer should force their employees into either direction.
 
ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, [email protected], www.atthatpoint.co.za  
 
For more information on SAPA please visit:
Website: http://www.sapayroll.co.za/
Twitter: @SAPayroll
LinkedIn: The South African Payroll Association

Author: Nicolette Nicholson, director at the South African Payroll Association
 
With a sluggish economy, low growth and our recent downgrade to junk status, South Africans now find themselves in a new national recession. At times like these, enterprises want a healthy workforce but are hard-pressed to fund it. However, employees, facing a higher cost of living, may feel it’s time to ask for a raise. Below is my advice to each party.
 
Demanding or begging for an increase without warning is never a good idea, especially when times are tough. For the best chance of success, try the following strategy:

Determine your worth
​Requesting a raise because you’re adding value is always better than simply asking for more money. If you don’t already have copies, ask HR for your employee history and performance reviews, and list how you’ve contributed to the company. Add anything you can remember and keep your information sources as evidence.
 
Do an online salary survey of your position to determine what market related remuneration seems to be, and to arrive at a reasonable figure or percentage you can ask for. Remember that benchmarking your salary in the market is very important in order to understand whether you in fact are remunerated under your worth.  Remember to take into account benefits such as pension / provident fund, medical aid, study assistance, or any other items provided by your company.
 
Imagine the conversation that might take place and think of any possible objections to your request. Then come up with a logical, non-defensive response for each. You’ll be less flustered if you’re prepared, and it will build your confidence.
 
Do not promote your hard work as a reason for a raise, rather highlight ways you engineered to work smarter and how this increases your value as an employee.

Schedule a meeting
Don’t ambush your manager. Rather schedule a meeting and let them know it’s about your salary to allow them time to prepare. At the meeting, be assertive but not combative as you state your position and provide your assessment. If they disagree, point to your evidence. While negotiating, never threaten to leave if you’re not willing and able to do so, as your bluff might be called.
 
At the appropriate point, state your desired increase and be prepared to justify it. Also indicate if you’d be willing to settle for any perks that will save you money, such as working from home, working flexi-time or being allowed to bring your child to the office. If your manager needs approval for your raise, set a follow-up date with them and check back promptly.
 
Be mindful to make an appointment with a line manager that has the mandate to motivate or reject your application.  Don’t get caught up in a musical chair situation and by the time your application is placed on the table for discussion, it is no longer what you initially negotiated.
 
The result
​If you win your increase, congratulations. However, if it’s denied, that doesn’t mean defeat. Keep adding value, while keeping an eye on the company financials and when profits start improving, ask again. If you feel strongly that you deserve better now, you could use your research to fill out your CV and begin looking further afield.
 
While your employer may no longer have the funds to offer top financial compensation or benefits, other ways exist to reward and motivate employees.
 
When considering alternative compensation, always strive to add value to your situation. Any benefits should be tangible and immediate to provide motivation on a daily basis.
 
From a Business Perspective - Saving money
Help employees get more from their earnings. Consider engaging a lifestyle coach or financial advisor to teach staff to achieve similar comforts from a more frugal budget, reduce waste, or focus on healthier, more mindful living. This illustrates your commitment to their wellbeing and motivates them to stay productive, while it shows that the business recognises the financial difficulties that tough economic times bring.
 
Investing in a wellness programme can actually save money. They’ve been proven to reduce absenteeism, increase motivation and productivity, promote a sense of self-worth, reduce workplace stress, and make employees feel valued by the company.
 
If possible, let staff work from home to reduce their travel costs and enjoy a sense of freedom. This can be one day a week, alternating days or any other scheme, but have measures in place to ensure strong communication and task tracking.
 
Consider allowing staff to come to work and leave when they want to, as long as they’re present for an agreed number of hours. They can miss traffic to or from work and have greater control of their time, which is often more appreciated than extra pay.
 
With new millennium technology, many office-based staff can easily schedule specific workdays to work from home. One may find that staff is more disciplined than anticipated and will appreciate this gesture as a benefit. This arrangement gives employees the opportunity to set a schedule that best works for them both personally and professionally.
 
Children might not need to go to afterschool care if one parent can work from home. Productivity and quality of work is a given if this is agreed and managed properly. An employer can also save on workspace and equipment.
 
SAPA will be hosting its annual conference this year titled Portraits of Success as follows:

• Johannesburg, Emperors Palace on 6 to 7 September
• Cape Town, Spier Wine Estate on 12 September
• Elangeni Maharani Hotel, Durban on 14 September

 
To register visit http://www.sapayroll.co.za/Events/Conference.aspx
 
Photo caption: Nicolette Nicholson, Director at the South African Payroll Association
 
ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, [email protected], www.atthatpoint.co.za 
 
For more information on SAPA please visit:
Website: http://www.sapayroll.co.za/
Twitter: @SAPayroll
LinkedIn: The South African Payroll Associatio