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in Business Studies by Master (810k points)

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by Master (810k points)
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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.
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