Types of Employee Benefits Your Company Should Know

In today’s fierce job market, the types of employee benefits you provide can make or break your ability to draw in and hold onto the best workers. This is especially true in Vietnam, where skilled talent is in high demand and companies must stand out to compete. A well-rounded benefits package shows you value your employees as whole people, not just as workers. It can boost morale, build loyalty, and drive productivity – all key ingredients for business success. In this guide, we’ll walk through five main kinds of employee benefits to consider.

Mandatory social security benefits

First and foremost, employers must provide certain social security benefits as required by law. These include:

• Social insurance: This covers employees for essential needs such as retirement pensions, unemployment benefits, work-related injury insurance, and maternity leave. Both employers and employees contribute a percentage of the employee’s salary to fund these benefits.

Health insurance: Basic health insurance is also mandatory, providing essential healthcare coverage for employees and their dependents. Employers are required to contribute a fixed amount per employee to ensure access to necessary medical services.

Additional insurance and healthcare

Beyond the mandatory health insurance, employers can provide supplemental insurance options to give employees greater flexibility and peace of mind:

• Private health insurance: This offers more comprehensive coverage, access to higher quality healthcare services, and a wider network of hospitals and providers. Employees can choose to enroll in these plans for an additional cost.
• Life insurance: Life insurance provides financial security for employees’ families in the event of unexpected death. Many employers offer group life insurance plans as part of their benefits package.
• Critical illness insurance: This type of insurance supports employees financially if they are diagnosed with a severe illness such as cancer, heart attack, or stroke. It can help cover medical expenses and lost income during recovery.

Retirement and savings plans

In the Vietnamese HR market, common types of employee benefits can be retirement and savings plans to support their employees’ long-term financial well-being:

• Voluntary social insurance (VSI): VSI is a government-sponsored program that allows employees to contribute a portion of their salary to secure additional retirement benefits. Participation is voluntary, and employees can choose to contribute 4%, 8%, or 12% of their monthly salary. Some employers may offer to match a percentage of the employee’s contribution as an added benefit.
• Supplemental retirement plans: Some companies offer their own supplemental retirement plans to provide employees with additional income in retirement. These plans are separate from the mandatory social insurance and can be funded by the company, the employee, or a combination of both.
• Employee savings schemes: Vietnamese companies can implement savings schemes that encourage employees to set aside a portion of their salary for specific goals such as education, housing, or other personal needs. These schemes may offer preferential interest rates or other incentives to help employees grow their savings over time.
• Seniority allowance: In Vietnam, it is common for companies to provide a seniority allowance as a form of long-term financial recognition. This allowance typically increases with an employee’s years of service and can help supplement their retirement savings.

Time off and flexible work arrangements

In addition to insurance and financial benefits, providing employees with ample time off and flexible work options can greatly enhance job satisfaction and work-life balance. Consider incorporating the following policies:

• Annual leave: Offer employees a starting benefit of 12 paid leave days per year, with the number of days increasing based on years of service. This encourages employees to take time off to rest, recharge, and attend to personal matters.
• Public holidays: Provide employees with paid public holidays per year, in accordance with national and local regulations. This allows them to celebrate important cultural and social events without sacrificing their personal leave time.
• Sick leave: Give employees up to 30 days of paid sick leave per year to ensure they can recover from illnesses without financial strain or pressure to return to work before they’re fully healed.
• Maternity and paternity leave: Support new parents with generous leave policies that go beyond the legal requirements. This can include extended paid leave periods, gradual return-to-work options, and additional unpaid leave if needed.
• Flexible work options: Offer arrangements such as remote work, flexible hours, or compressed workweeks to give employees more control over their schedules. This can lead to improved work-life balance, reduced stress, and increased job satisfaction.

Additional compensation and perks

Beyond standard compensation, offering additional types of employee compensation and benefits can help attract and retain top talent while boosting employee morale:

• 13th-month salary: Provide an annual bonus payment equivalent to one month’s salary as a way to reward employees for their hard work and loyalty throughout the year.
• Performance bonuses: Implement a system to reward employees who exceed goals and drive company success. This can motivate employees to go above and beyond in their roles.
• Meal allowances: Offer meal supplements to help cover the costs of employee lunches or dinners. This benefit can be especially appreciated in areas with high living costs.
• Transportation allowances: Provide allowances to cover commuting costs, especially in major cities where transportation expenses can be significant. This can ease the financial burden on employees and make their daily commute more manageable.
• Mobile phone allowances: Offer stipends to help cover the costs of work-related mobile phone use, ensuring employees can stay connected without personal financial strain.
• Gym or club memberships: Encourage employee health and well-being by providing memberships to gyms, fitness centers, or other recreational clubs. This perk shows that the company values employees’ physical and mental health.

Building a top-notch employee benefits package is a smart move for any company that wants to succeed in Vietnam’s dynamic job market. By going beyond base pay to support your team’s health, well-being, financial security, growth, and quality of life, you’ll cultivate a loyal, engaged, and productive workforce eager to drive your business forward. As an HR leader, regularly review the types of employee benefits you provide and look for ways to expand and adapt them as your workforce evolves. Need expert guidance putting together a winning benefits plan? Talentnet is here to help. Reach out today to craft a strategy and design compensation and benefits packages that will help you attract and keep the best talent in your industry.