Impact of fringe benefits/Positives/Advantages on businesses
- Attractive fringe benefit packages may result in higher employee retention/reduces employee turnover.
- Attracts qualified/skilled/experienced employees who may positively contribute towards the business goals/objectives.
- It increases employee satisfaction/loyalty as they may be willing to go the extra mile.
- Improves productivity resulting in higher profitability.
- Businesses save money as benefits are tax deductible.
- Fringe benefits can be used as leverage for salary negotiations.
Negatives/Disadvantages on businesses
- Fringe benefits are additional costs that may result in cash flow problems.
- Administrative costs increase as benefits need to be correctly recorded for tax purposes.
- Decreases business profits, as incentive/package/remuneration costs are higher.
- It can create conflict/lead to corruption if allocated unfairly.
- Workers only stay with the business for fringe benefits, and may not be committed/loyal to the tasks/business.
- Businesses who offer employees different benefit plans may create resentment to those who receive less benefit resulting in lower productivity.
- Businesses who cannot offer fringe benefits fail to attract skilled workers.
- Businesses have to pay advisors/attorneys to help them create benefit plans that comply with legislation.
- Errors in benefit plans may lead to costly lawsuits/regulatory fines.