Top 5 Non-Statutory Benefits that Lead to More Engaged, More Productive Employees

Business Success

Any Singapore employer that recognizes the significant roles of his/her workers within the organization would willingly provide some effective remuneration packages that meet employees’ needs and are competitive with what other companies offer. This is manifested in an employment contract, in accordance to the which is the city-state’s main labour law.

Nevertheless, those companies that offer non-statutory benefits on top of their basic employees’ remuneration package may experience a more engaged and more productive staff because they feel more valued for their contribution to the organisation.

But before we converse about the top 5 non-statutory benefits that lead to happy employees, let us learn what the Employment Act of Singapore is all about.

What is the Employment Act of Singapore?

The Employment Act of Singapore is the prescribed guideline for drafting the employment contracts (or contracts of service) for applicable employees, including the specific rights and responsibilities of both employers and employees.

The employment contract will include the following important clauses:

  • Job title and scope of work and duties
  • Commencement date
  • Working hours
  • Benefits, staff welfare, and privileges, if applicable
  • Code of conduct
  • Terms and Conditions for termination or resignation

Why does the Employment Act matter?

Basically, the Employment Act provides a general framework for employers drafting the terms and conditions in the employment contract for their respective employees. While the scope and interpretation of the employment contract varies depending on the different type of companies, industries, and nature of the job, employers must still ensure that the employment contract does not violate any part of the Employment Act.

It is the foremost duty of an employer to determine if the Employment Act is applicable to all the company’s staff and to draft an employment contract that is in accordance with it. Wilful ignorance or intentional non-compliance to the Employment Act will incur penalties and prosecutions.

People who are Applicable to the Employment Act

The Employment Act encompasses all employees in Singapore who are bound by employment contracts (or contracts of service) with any local companies or employers.

Howsoever, it does not apply to the following particular employees/workers:

  1. Domestic workers
  2. Seamen, seafarers, sailors, et cetera
  3. Staff with managerial or executive positions
  4. Employed individuals by a statutory board or the Government

What are the Non-statutory Benefits that can Make Employees Happy?

happy employeesAll companies in Singapore must follow the rules stipulated under the Employment Act when working out remuneration packages and compensation details for any prospective or existing employees of its organisation.

But in hyper competitive business communities, providing these five non-statutory employees’ benefits can result to happier employees.

  1. Healthcare – Under the Employment Act, there is no statutory requirement for company’s owners to provide private health insurance benefits for their employees.However, offering a clear, cost-effective, and comprehensive medical insurance plan for your office workers would instantly communicate your sincere concerns about the overall well-being of your workforce – and can instantly win them over.

    This is important for two reasons:

    Firstly, it means that when employees get sick, they have the right means to address their illnesses/conditions properly; additionally, this can prevent the severity and frequency occurrence.

    Secondly, taking a company health insurance plan can allow the company’s owners the flexibility to customise the insurance plan according to specific health situation of employees and even grant you group discounts.

    Regardless, a healthier workforce means lower healthcare expenses for the company, staff efficiency, and a happier workforce.

  2. Per Diem/Daily Allowance – Per diem (Latin for “per day”) or daily allowance is a specific amount of money an employee receives from the company for travel-related jobs to other countries. This may cover any or all costs incurred from meals, accommodations, transportations, as well as other living expenses.Though there is an acceptable rate guide for per diem allowances in accordance to the Inland Revenue of Singapore (IRAS), this is strictly for income tax filing purposes only.

    It means it is the employer’s discretion to determine the amount of per diem allowances the company’s frequent business travellers can receive. However, this does not mean or imply an automatic increase of the per diem allowance which would win over an employee’s gratitude or guarantee job satisfaction.

    An attractive but logical per diem allowance should benefit both the company and the traveller. The following are several ways to achieve the employees’ loyalty and appreciation:

    • Early approval of travel-related jobs to avail booking discounts
    • Provision of built-in rules for vehicle usage, restaurant reservations, etc.
    • Placement of integrated receipt submission system for easy reporting and/or reimbursement procedure
  3. Relocation Package – Finding highfliers and talents for companies might involve hiring professionals whose home country is not Singapore.  Therefore, it is a common practice for companies to provide an expatriate compensation package that would allow its prospective foreign employees to move to the city-state together with their families.Singapore offers one of the most generous expatriate compensation packages in the region. It typically includes the following (may vary for different industries):
    • Free or subsidised housing costs
    • Educational expenses for minor children
    • Childcare services’ fees for non-schooling children
    • Car provisions including gas allowances
    • Moving and shipping expenses
    • Groceries and utility bills

    If your company chooses the expatriate pay approach, you must be certain that it is essential for the success of the business operations. This way, you can provide a generous expatriate pay that will provide the best interests for both employee and the organisation.

  4. Employee Share Incentive Plans – Motivating employees to be more engaged and productive at work can be attained in ways that go beyond what is written on the Singapore Employment Act.This is where the Employee Share Incentive Plans enter the picture. The main objective of these employee plans is to recruit goal-oriented talent and to retain industrious talent.

    Singapore companies currently offer three Employee Share Incentive Plans, namely:

      • Employee Share Option Plan (ESOP)This allows employees to participate in shares purchase of the company within a specific time frame and pre-determined price. This is optional rather than an obligatory act.
      • Employee Share Awards Plan (ESAP)This allows companies to provide actual shares to employees out rightly for free.
      • Phantom Share Option Plan (PSOP)This allows employers to remunerate employees with a cash bonus that is directly influenced by the share performance of the company. In contrast with a regular cash bonus, PSOP can yield tax savings.

    Through these employee plans, staff will have a sense of ownership towards the company or perhaps for some, a shared sense of entrepreneurship. This leads not only to personal satisfaction with their job but also to increase productivities considering the fact that any success for the company is also considered their own success.

  5. Other Additional Benefits – Based on the STJobs poll, 43 per cent of respondents admitted that they consider themselves as happy employees.Notwithstanding, the present employee benefits packages they have received from their respective companies do not necessarily mean they will not appreciate any relevant top-up that can increase their work happiness ratings.

    These include the following:

    • Flexible working options – the freedom to work from home or come into work on specific days. This can minimise the encumbrance of daily commute for the employee while allowing the implementation of communal workspace to save space for a growing workforce
    • Annual Wage Supplement (AWS) – also known as the ‘ is a non-compulsory, one-time monetary based on the employee’s total annual salary. This can help alleviate financial difficulties especially for low wage workers.
    • Exchangeable or adjustable benefits – This implies giving freedom to employees to trade existing benefits that are not useful/applicable to them, for other options that won’t compromise the companies’ operations.  For instance, some older employees may prefer critical illness coverage instead of a retirement package while some younger employees lean towards having a few days extra holiday allowance rather than a company pension contribution.

It is important for companies to think about creating an effective compensation package which includes non-statutory benefits that will lead to happy employees as they are some of the best assets within the organisations. Being understanding and meeting their specific needs or requirements can reap considerable rewards in staff loyalty, cost saving, and long-term business successes.


Posted in Corporate Services.