Employee benefits are a fantastic way of rewarding your employees for their contribution to your business. They’re also an attractive proposition for new recruits because offering them demonstrates that you care about your people.
Providing a flexible benefits package has a number of proven advantages, including:
- A more engaged and motivated workforce
- Increased morale
- Improved employee retention
- Reduced absence levels
What do we mean by employee benefits?
When we talk about employee benefits, we’re referring to benefits like pensions, childcare vouchers and cycle to work schemes. Part-funded by the employer, the employee usually pays to receive their chosen benefits through salary sacrifice. The cost is deducted by payroll from their gross salary before tax, thereby gaining tax efficiencies.
A flexible benefits package is the most appealing to employees as they can tailor make their own package and have the option to switch benefits on and off each year, depending on their personal circumstances.
Employee benefits may include:
- Sharesave scheme
- Childcare vouchers or salary sacrifice
- Private medical insurance
- Cycle to work
- Discounts on technology
- Lease cars
- Dining cards
- Gym membership
- Healthcare cash plan
- Buy Sell holidays
- High street discount vouchers
This list is by no means exhaustive yet it showcases many reasons why an employee might choose to work for you, and stay with you, over another organisation.
Choosing the right rewards for your people
You’ve decided you’d like to reward your employees with a benefits package. So how do you go about choosing the right one?
What’s right for a small business may not be the same for a medium or large organisation. The type of employee benefits package you offer depends on the demographic of your workforce i.e. age, gender and geography, and also on the objectives of your business and the funds you have to invest.
For parents with children, childcare can be a drain on their monthly salary. In the annual Family and Childcare Trust’s Childcare Survey, 40% of parents admitted they sacrifice lifestyle purchases like holidays in order to pay for childcare. Offering support to make childcare more affordable can be a major benefit for working families, and also give them additional income to spend enjoying family time together. The option to purchase additional holidays creates another level of flexibility.
An older workforce might consider pensions, investments and healthcare to be higher on their agenda. If you have a younger population they might be happier with savings related benefits, for example to help them save up for their first property. They could also be interested in discounted technology or high street discounts to celebrate a special occasion.
Providing benefits such as a Cycle to Work scheme or gym membership is a clear demonstration of an employer’s commitment to health and wellbeing. After all, healthier employees are generally happier and more productive in their role.
Ask employees what benefits they want
Take a look at the structure of your workforce and decide what’s right for them. If in doubt, ask them. Use an employee survey or forum to find out what type of benefits your employees would like.
How do you measure ROI?
Selecting the right employee benefits package for your business is crucial. It’s an investment in the long-term future of your business but you still want to achieve a return on your investment. This might be improving staff retention and engagement, reducing recruitment costs or a reduction in absence levels. It’s important to establish these measures of success at the outset.
Using an online employee benefits portal
Setting up an online portal is an easy way for employees to manage their own benefits choices and requires less administration resource from the employer. Whilst these are a cost-effective option for larger organisations, smaller businesses might create their own in-house benefits scheme, for example by negotiating discounts with local retailers, restaurants or a car park that employees use.
If you’re looking to set up an employee benefits scheme, we are happy to recommend our partner Enjoy Benefits, based in Stockport. They have more than a decade of experience of providing a range of flexible benefits to businesses of all sizes. Take a look at www.enjoybenefits.co.uk for more information.