Compensation and benefits for many professionals are some of the main points to be considered when looking for new job opportunities.
However, there are different types of remuneration currently applied in the market. It is quite a challenge for HR specialists to identify the most appropriate ones and the types of benefits that will be part of the company’s compensation composition.
That’s why it’s worth continuing with this reading. Next, we will explain better what compensation and benefits mean and also expand the subject to the difference between salary and compensation.
Finally, we will also discuss the positive aspects of strategically thinking about this issue to enhance your human capital.
Compensation and benefits: what is it?
Here we are talking about ideas that complete each other.
Compensation is everything that includes the amount invested in your employees. The benefits, in turn, are complementary, such as health plans, food stamps, and bank hours. All of them, together with the salary, form an employee’s remuneration.
What is the difference between compensation and benefits?
Although one complements the other, Workers’ compensation benefits have different concepts. The first has to do with valuing professionals based on their salary and also on the company’s benefits package.
It is therefore all forms of retribution for the employee. Meanwhile, for those who still don’t know what benefits are, it is a package of advantages offered voluntarily or in accordance with labour laws .
Compensation, salary and benefits are different, but they all have something in common, and when salaries and benefits are added together, we have the complete compensation of the professional.
Let’s see more clearly how this works:
- Salary is the simple cash retribution in exchange for a qualified workforce ;
- Compensation is the set of all forms of payment and/or rewards for employees;
- Benefits are the facilities and advantages offered to employees.
But, we will talk later about the types of employee benefits and some examples of these concepts mentioned above.
What does the law determine about compensation and benefits?
In labor law, remuneration is present in article 457 of the CLT, which says:
“For all legal purposes, the employee’s remuneration includes, in addition to the salary due and paid directly by the employer, as consideration for the service, the tips he or she receives”.
Regarding the benefits of a company — also known as indirect remuneration —, there is a wide variety of alternatives, since they are representations designed according to the profile of the employees — although there are benefits provided by law, such as the 13th salary for hired employees under the CLT regime, the FGTS and paid vacations, among others.
How important is it to have a compensation and benefits program?
Everyone wins when a strategic compensation and benefits plan is created for the company.
HR, for valuing human capital, management because it knows it can count on employee engagement and a high level of satisfaction – which can increase productivity -, and the company’s own professionals, since they will be able to deal better with the challenges of everyday life.
It is important, however, that this planning is done according to two pillars: the identity of your company and the profile of employees.
That’s because there’s no point in thinking about benefits that don’t fit into people’s routine. An interesting example is the daycare allowance, if no one in the company has children or intends to have them in the short or medium term, what is the purpose of this benefit?
Hence, the need to have a specific job, which goes according to the organizational culture , and with what its employees are most familiar with and seek in their respective routines.
How to implement the remuneration and benefits policy in companies?
To evaluate the implementation of a good compensation and benefits program, think about some key factors for the success of that mission. Let’s point out some considerations, just below!
Goals and objectives
Analyze what will be achieved with this project. Compensation and benefits must meet the needs of its professionals, but also serve the company’s specific objectives.
Rewards for goals, for example, can be thought of for an improvement in sales. Likewise, internal training and qualification courses can be defined as a way to hone the company’s talents . Everything must follow, therefore, according to a well-defined line of objectives and goals.
Build a job and salary plan.
Assess the market and research the competition. They are reliable thermometers of what has been practised regarding compensation and benefits.
Thus, it is possible to draw up your plan that differs from what is being offered, capable of becoming an attraction in itself. Something that, in the short and medium term, can become a powerful instrument for attracting and retaining talent.
Analyze the budget for the project.
Be careful with the compensation and benefits solutions presented, as the company’s budget for this may negatively influence them.
So, analyze the demands of the professionals, calculate everything according to the expected budget and make adjustments before announcing the measures for the entire company. This avoids burnout and ensures that the project will be a success from the start.
Types of remuneration and benefits
What types of remuneration?
Now, the main types of remuneration in the market, which companies of all sizes and segments popularly adopt. Check out what they are below:
- Direct salary: which is the combined remuneration based on the functions performed within the company;
- Indirect salary (or benefits): these are the advantages and conveniences offered by the company, which may be free or partially or fully paid;
- Rewards: these can be occasional gratuities for achieving goals, for example.
However, it is worth pointing out that in this compensation and benefits plan, there are many ways to reward your employees. Next, let’s look specifically at the benefits.