Employee benefits and bottom lines

In 2012, Time magazine reported that "each year, the average company loses anywhere from 20% to 50% of its employee base". This trend has in no way abated. In the modern workplace, employee retention is a top priority for executives, says FedGroup Life's chief executive officer, Walter van der Merwe.

In this somewhat unstable and cut-throat environment, it's interesting to note that numerous organisations opt to cut employee benefits - often not realising they are an essential tool for attracting and retaining the best staff.

A 2008 Medhunters report states that "key contributors are a company's highest retention risks - top performers are most likely to find opportunities elsewhere, even in a strained labour market."

Companies that have realised their powers of attracting top talent, are going against the trend, and offering more comprehensive benefit packages that include group risk cover, wellness schemes, medical aid, income protection and retirement annuities. Aside from the perceived value, these benefits also help to lower payable tax on an income package.

However, if managed correctly, these elements can also deliver more tangible benefits to the business, offering more than just window dressing for an attractive salary package. Cover provided through group risk schemes will also assist in mitigating the high costs often associated with medical treatment for critical illnesses or the continued treatment for a disability.

If structured correctly, group risk cover can offer an affordable combination of critical illness cover, medical aid, gap cover and disability income protection cover for employees, which should ensure that there are minimal financial shortfalls should a medical issue of this nature arise.

Comprehensive group risk cover can ensure that, should an employee be unable to work due to injury or illness, they continue to receive income to sustain living, receive a lump sum payment to assist with other financial commitments, have the means to pay for continued medical treatment and medication, or even try experimental treatments that may not be covered by medical aids.

This can reduce the strain on an employee's finances, which helps to reduce some of the stress experienced following a diagnosis of this nature, for both the employee and his or her immediate family. This means that an employer who provides comprehensive cover is able to materially impact the lives of their employees should a major life event affect them.

These benefits also have the potential to reduce the mortality and disability risk of employees. Any employer who historically has a healthier workforce could potentially benefit from a more favourable structuring of risk, which could deliver the same level of cover at a lower cost. In addition, comprehensive employee benefit packages that offer integrated risk benefits are also an excellent way to manage sickness and absenteeism, as well as avoid any unexpected and unplanned mortality and disability claims. This further improves employee productivity and efficiency, while reducing a company's group risk profile, which all positively impacts on a company's bottom line.