Why are benefits strategically important to employers?

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pohnpei397 eNotes educator| Certified Educator

There are at least two reasons for this.

First, benefits are strategically important because they are costly.  The more benefits are given (in terms of things like good health care plans or generous vacation benefits) the higher the costs of having employees.  This is something that must be controlled.

Second, benefits are strategically important because they are a way of recruiting and retaining good workers.  A firm wants to have the best possible workers so as to be most productive.  In order to get them, it must often (particularly if it is looking for skilled workers) offer good benefits.

Benefits are strategically important, then, because they are both a cost and an important way of getting better employees.  These two aspects must be balanced against one another.

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