Employee Benefits & Cost Management
What are Benefits?
Benefits are forms of value, other than payment, that are provided to the employee in return for their contribution to the organization. The prime objectives of providing benefits are to attract, motivate and retain talent.
Employee benefits
- Transport
- Superannuation
- Health insurance
- Uniforms
- Paid holidays
- Executive perks
• It is important to consider organizational effectiveness
• Cost should be linked to productivity based on performance
• Total cost concept and value addition
• Fair Practices
• Develop company policies
What is Cost?
Cost is defined as the monetary valuation of effort, material, resources, time consumed, risk and opportunity forgone in production / delivery of a good or service. It is simply put as the amount that has to be paid or given up for something to be acquired.
What is Cost Management ?
Cost management is the process of planning and controlling the budget of a business. Cost management is a form of management accounting that allows a business to predict impending expenditures to help reduce the chance of going over budget.
Factors affecting cost management
- Growth in information technology
- Global and overall domestic competition
- Growth of service and manufacturing sectors
Managing a business has containing cost of utmost importance. Below are mentioned some of the techniques through which the overall cost of the business can be controlled and maintained within the required limits.
How do you manage Cost ?
• Proper manpower planning
• Introducing a performance base pay structure
• Conduct salary surveys
• Review processes, procedures and practices
• Training and development
• Introducing house keeping methods
• Create cost consciousness
• Introducing a performance base pay structure
• Conduct salary surveys
• Review processes, procedures and practices
• Training and development
• Introducing house keeping methods
• Create cost consciousness
Total Cost to the Company
• Base Pay
• Variable Pay
• Benefits
• Base Pay
• Variable Pay
• Benefits
Advantages of cost management
- It helps in controlling the project specific cost, in turn also the overall business cost.
- One can predict the future expenses and costs and accordingly work towards the expected revenues.
- Predefined costs can be maintained as records for the business.
- It helps in taking those actions that are necessary to assure that the resources and business operations aim at attaining the chalked objectives and goals.
- It helps in analysing the long term trends of the business.
- The actual cost incurred can be compared to the budgeted to see if any component of the business is spending more than expected.
- It helps in analysing the business positioning in terms of making an acquisition factoring the cost component involved.
References
charis@peaktwo.com (2015). Employee Benefits | The Importance of Employee Benefits. [online] Virgin Pulse. Available at: https://www.virginpulse.com/employee-benefits/.
.Accessed on 04th July 2020.
What is cost management? - Definition from WhatIs.com (2019). What is cost management? - Definition from WhatIs.com. [online] WhatIs.com. Available at: https://whatis.techtarget.com/definition/cost-management.Accessed on 04th July 2020.
EduPristine. (2015). Cost Management Techniques and Advantages. [online] Available at: https://www.edupristine.com/blog/cost-management-in-detail. Accessed on 04th July 2020.
What kind of new approaches did your company take for employee satisfaction.
ReplyDeleteThanks buddima , Launch (and act on) in-company surveys, drive communication and transparency, promote good health, Training and investment are the new methods which our company done recently for employee satisfaction other than existing methods
DeleteWhat are the modern day cost management trends?
ReplyDeleteThank you Ajith,The currently prevailing methodological approaches for cost estimation in the product development process are Proper manpower planning,Introducing a performance base pay structure,Conduct salary surveys,Review processes, procedures and practices,Create cost consciousness
DeleteManujaya What are benefit costs?
ReplyDeleteThanks Mahesh,Importance of Cost Accounting is when Tracking automated manufacturing environments is much easier than monitoring labor data. Machines are automatically monitored by computer systems. People, on the other hand, are monitored by other people, which takes a lot of time and manpower.
DeleteName few benefits examples that can offer to an employee from an the employer?.
ReplyDeleteThanks Pubudu,
DeleteHere is a list of popular employee benefits
Paid time off such as PTO, sick days, and vacation days
Health insurance
Life insurance
Dental insurance
Vision insurance
Retirement benefits or accounts
Healthcare spending or reimbursement accounts, such as HSAs, FSAs, and HRAs
Long term disability insurance
Short term disability insurance
Tuition reimbursement
Childcare benefits
Gym memberships or discounts
Wellness programs
Employee recognition programs
Relocation assistance
Commuting/travel assistance
Telecommuting options
Workplace perks such as recreation activities, food and coffee, and flexible work schedules