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Are you wasting your money on employee benefits

Are you wasting money on employee benefits?

The importance of employee benefits is often overlooked. Whether you are thinking about introducing benefits into your organisation, or already have a system in place, you should make sure that they are worthwhile.

Introduction

Prospective employees now look for more than just a well-paying salary when considering job offers. A comprehensive employee benefits package is essential for attracting and retaining high quality talent.

However, without a clear understanding of your employees’ needs, you risk wasting resources on benefits that your team will not engage with.

Where to begin

Before trying to source any benefits, there are certain considerations to take into account.

  • Are your current arrangements still appropriate?
  • Which benefits are important to your employees?
    • If you are unsure, how can you find out this information?
  • What do you wish to achieve with your employee benefits package?
    • Is it employee retention?
    • An increase in productivity?
  • What is your organisation’s budget?
  • How will you encourage your employees to engage with their benefits?

Your workforce is unique. What may work for another organisation is unlikely to be the solution for yours. A professional consultant can help you find the answers to these questions and your initial ideas will allow you to plan the rest of your strategy.

Benefits you can offer

There are a multitude of options available for budgets of all sizes and workforces of all values. Some benefits are mandatory, while others offer considerable value but are still cost-effective.

Mandatory benefits

Workplace pensions

Pensions have become part and parcel of the modern workplace; which means that they tend to be overlooked.

You should stress the importance of saving for retirement to your staff and encourage them to engage with their pension schemes. Internal communications, webinars, and financial education sessions are just a few ways to achieve this.

What else do you need to consider?

  • Contributions – what level of employer contributions will attract the best talent?
  • Default funds – your pension provider will have a standard fund that most employees will be enrolled into unless you specify otherwise. Depending on your organisation’s values, you may wish to change to an alternative fund based on environmental or social factors.
  • Contribution methods – if eligible, Salary Exchange (also known as Salary Sacrifice) can help both you and your employees achieve tax and national insurance relief.

Holiday pay

If an employee works for five days a week, they are legally entitled to at least 28 days of paid holiday per year.

You can include public and bank holidays as part of this statutory leave but British employers tend to actually provide more days of annual leave in order to stay competitive in the job market.

You can also offer your staff the ability to buy extra holiday as part of their benefits.

Sick pay

You are legally mandated to provide a minimum level of Statutory Sick Pay to an unwell employee for up to 28 weeks. Although, you can also increase the amount of sick pay you provide.

Maternity and paternity leave

No matter how long an employee has been working for you, they are entitled to 52 weeks of maternity leave, and one or two weeks of paternity leave.

Additional benefits

Life Insurance/Assurance

Few of your employees are likely to have sufficient life cover. It can be costly for individuals, especially for older or disabled staff, but can be economical if handled by an employer.

This valuable benefit usually provides cover up to a certain level without medical underwriting. It can give your employees the peace of mind that their loved ones will be looked after if they were to pass away.

Income Protection

Statutory Sick Pay only provides so much for an unwell employee. Income Protection schemes are a far more tangible way to show your workforce that you value and support them.

Medical health benefits

These are some of the most sought-after benefits and include Private Medical Insurance, physiotherapy, and mental health support.

Having these arrangements in place can be helpful for both employees and employers. With specialised care that has shorter wait times than the NHS, sick staff members can have their issues dealt with earlier and return to work sooner.

Financial education and wellbeing support

Financial worries impact employee’s workplace performance, particularly motivation, productivity, and absenteeism.

It is possible to address their concerns cost-effectively through group presentations and 1-to-1 engagement.

How to ensure engagement

Employee benefits boost morale, nurture loyalty, and re-enforce your organisation’s values. After you have selected an appropriate range of benefits, regularly communicate with your employees so that you can measure their engagement.

A 2022 report by MetLife UK, surveying 1,200 employees and employers, discovered that half of the respondents would take a reduction in their wages for more personalised employee benefits. The survey also found that 74% of employees would work harder for an employer who provided benefits based on their individual needs.

Meanwhile, 62% of workers would be interested in shaping their benefits package via discussions with their employers. In fact, 48% of respondents reported that they were already in discussions with their organisations about the topic. Such figures convey the willingness of most workforces to engage with benefit packages if they are able to provide their own input. [1]

Over time, your workforce will change and so will its expectations. To ensure that productivity stays high, your benefits package will need to evolve with your staff. Through regular reviews, you can be certain that your employee benefits package is an asset to your organisation instead of a monetary drain.

How can we help you?

There is a lot to consider when it comes to the provision of employee benefits, but we can help you navigate your options and tailor the best solutions for your organisation.

If you would like to discuss the options that are available, or if you wish to arrange an initial no cost, no obligation, consultation, then please fill out the contact form below. Alternatively, you can call 01603 706 820 or email info@lffp.co.uk.

Important information

This is solely for informational purposes and nothing in it is intended to constitute advice or a recommendation. You should not make any investment decisions based on this content. The value of pensions can fall as well as rise and you may not get back the amount you originally invested. While considerable care has been taken to ensure this information is accurate and up-to-date, no warranty is given as to its accuracy. This article constitutes a financial promotion.

Sources

[1] Urquhart, J. (2022) Half of employees would sacrifice pay for personalised benefits, report reveals, People Management. Available at: https://www.peoplemanagement.co.uk/article/1745208/half-employees-sacrifice-pay-personalised-benefits-report-reveals (Accessed: 11 September 2023).

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