How To Optimally Plan End Of Service Benefits For Employees
Organisations across the globe aim to heavily invest their time, energy and resources to keep their employees satisfied, as this creates a stable workplace where individuals can focus on their talents and skills. This approach allows companies to collaborate with coworkers, enabling employees to achieve personal goals as well as company goals and ensuring higher levels of retention. However, there comes a time when a team member leaves the employer to begin a new chapter in their life.
At such a juncture, the same HR cloud solutions that support the workers in carrying out their duties can also be used to ensure a smooth transition for professionals leaving the organisation. This assistance focuses on the end of service benefits, which involve the payment of gratuity. Due to the presence of this monetary aspect, it is necessary for HR experts and the finance department to efficiently plan out their tasks by following certain smart practices that are discussed at length here.
Ensure Transparency At All Times
End of service benefits can be a sensitive subject, hence the need for companies to ensure they deal with the subject meticulously. One of the ways that firms go about this is by ensuring transparency at all times. Giving employees a clear picture of their benefits with a breakdown of the main components removes any scope for doubts and helps them plan their finances better for the future.
An employer provides transparency through the employee self-service portal where the entire team can view all their details and stay up-to-date on the latest calculations of their end of service benefits. The platform also offers an overview of the privileges and highlights gratuity due to each employee according to their designation and more.
Maintain Accurate Data For Precise Calculations
Calculating the end of service gratuity can be a time-consuming affair for both the finance and HR departments but technology makes the process a lot easier. HR cloud-based software keeps track of all the information and ensures data is up-to-date, which is a crucial requirement for coming up with an exact amount. The HR system even performs all the calculations – based on pre-set formulas and an entirely automated series of steps – to further simplify the valuation process.
Gratuity is calculated on an annual basis after the employee has completed at least one year of service. It also depends on whether the contract is limited or unlimited. Finally, the calculations also factor in any pending loans and payments finally arriving at the detailed sum for gratuity that is all-inclusive.
Always Stay One Step Ahead
Paying end of service benefits can be a substantial expense for any organisation, hence it is vital to be prepared with the required funds well in advance. Each year, companies need to compile a list of liabilities and expenses with annual payment estimates to have better visibility about their financial position with regards to final settlements. This concluding report also includes attrition rates for a more realistic estimation.
Also, HR departments need to stay updated on the latest labour laws that will ultimately impact the end of service benefits. Increasing employee engagement and satisfaction may not directly help in this process but it is an active way to retain staff, which can be of a more significant benefit for the organisation and its respective personnel.
Yomly is one of the leading providers of HR systems in Dubai with proven expertise in payroll services that cover the end of service benefits. We invite you to contact us anytime for a demo of our bespoke solutions.