In an increasingly competitive job market, it’s vital that businesses recruit and retain the right employees.
Benefits packages are worth an average of 11.5% of an employee’s basic pay. With 62% of businesses saying they are changing their incentive strategy as a result of pensions automatic enrolment, there’s never been a better time to review your employee benefits packages.
The difference that incentives make
Given all the benefits of having an employee benefits scheme, it’s surprising that some businesses don’t offer one. Research by Canada Life Group showed that 26% of UK employees don’t receive workplace benefits from their employer. However, businesses that do offer them say that their employee benefits schemes help them in a number of ways:
- Easier recruitment
- Improved employee retention
- Faster progress towards your business goals
- Positive word of mouth
The most popular employee benefits
Small businesses don’t need to completely redesign their office or spend a fortune to offer the right benefits to staff.
In fact, research shows that employees value basic benefits – these options are a good place to start:
- Pensions: the legislation for workplace pensions means all businesses need to automatically enrol eligible employees into a scheme.
- Company car: still a popular benefit, with 60% of company car drivers saying they would only move to a job that offered a car of similar value.
- Flexible working: this covers many different options from job sharing to working from home. It’s particularly popular with employees who have families.
- Healthcare: this benefit offers a range of services such as private medical insurance, dental cover, physiotherapy and health screening.
- Enhanced leave: this allows employees to take additional time off. This may include extra paternity or maternity leave or the option to take a sabbatical.
- Childcare vouchers: these vouchers help with the costs of childcare. But employees should be aware that they can affect tax credits.
- Shares: these can be a good way for employees to benefit from the success of a company. There are several HMRC-approved schemes which have tax benefits.
- Gym membership: a great way to encourage employees to be healthy. It’s popular too, as subsidised gym membership can be significantly cheaper.
- Season ticket loan: these allow staff to borrow money to buy annual travel tickets, which are normally much cheaper than monthly or weekly passes.
- Income protection: this pays a replacement income if you’re unable to work because of long-term illness or injury.
What will a benefits scheme cost?
With so many positive outcomes, benefits schemes are worth the investment and they may cost less than you think.
According to research by Mercer, 36% of businesses say they actually saved money by having a flexible benefits scheme, and 46% said there was no additional cost to the business. These cost savings can come about by offering benefits instead of pay rises.
Research by Arise shows that 58% of workers would take a pay cut to be able to work from home and 25% would be happy with a lower salary if they could avoid their commute.
The next step: choosing the right incentive scheme
When you’ve decided to introduce an employee benefit scheme, read our great advice to help you decide on which one works for your business.