Following the COVID pandemic, 93% of employers say employees’ expectations of their experience at work are changing. And 42% of businesses feel they’re not meeting employees’ benefit needs. With an ongoing need to drive high levels of employee engagement, businesses are improving their employee benefits package to better support their people.
In this two-piece mini series, we explore:
Why it’s important to provide employee benefits.
How to decide which employee benefits you should provide.
The different employee benefits you should consider.
Why is it important to provide employee benefits?
When people are distracted by issues like health, money problems or childcare, they’re not able to give their all at work. Which has a detrimental effect on your business.
Providing support in the form of benefits – particularly in-demand wellbeing and flexible working benefits – is a great way to help your people overcome their challenges. Boosting their wellbeing, reducing sickness absence and making employees feel cared for by your business.
Investing in employee benefits also brings a range of other advantages.
To reduce business costs
It might seem counterintuitive, but spending more on benefits can actually keep your salary bill down. Many employers introduce additional employee benefits when they can’t afford to increase salaries – either at all or by the amount other businesses are increasing pay by.
Certain benefits can also be offered via tax efficient salary sacrifice arrangements which save money for employers and employees.
To give employees more disposable income
With the cost of living crisis, many employers are increasing wages, although typically not by the rate of inflation. So, they’re also including benefits that will support employees financially. Benefits like employee discount schemes which help with the day-to-day cost of living or cash plans to help offset health costs.
If employers pay for these benefits, employees don’t have to, leaving more money in their pockets. And, if employees save hundreds of pounds through these kinds of benefits, it leaves them with more disposable income. Giving them greater financial stability and improving employee engagement.
To engage, attract and retain employees
With very low levels of unemployment and job adverts hitting record highs, attracting and retaining top talent has become highly challenging. As a result, more employers are boosting their benefits offering to:
Improve their image and reputation.
Help their business compete in a competitive marketplace.
Increase the number of job applicants.
Potentially even reduce starting salary expectations with job offers.
Once a new hire is onboard, they can access their benefits, helping them feel rewarded and appreciated for their work. This drives higher levels of job satisfaction and boosts morale and engagement – meaning that employees are willing to go the extra mile at work.
The business case for employee benefits is clear. Now, it’s time to think about which benefits to provide.
How to decide which employee benefits you should provide
The benefits you provide send a message to staff members about what you value. So think carefully about these aspects.
Culture and values
Your employee benefits should align with your company’s values and culture. For example, companies with a family-oriented culture may include work trips, catered lunches and unlimited time off with high levels of family leave and pay. Whereas firms that value seniority and experience may provide higher levels of benefits for people in more senior grades.
Benefits people will value and use
Benefits need to be well thought through and easy for employees to understand, join up for and use. Understanding your employees based on demographic data can also be helpful. For example, if your business has a middle aged population with children, risk benefits like life cover and income protection could be valuable. Whereas discount schemes, gym memberships and individual wellbeing budgets might better suit younger audiences.
Employee surveys will help you gauge the kinds of benefits people find most attractive. And exit interviews can also identify what you’re missing. Ignoring the results and providing benefits that you think will make your business look good and you’ll waste time and money. Because employees simply won’t use them.
Some benefits can end up being white elephants – like ping pong or pool tables. These kinds of benefits became popular among Silicon Valley firms and trickled down to other businesses. While they worked in tech firms’ campus cultures where employees were expected to spend significant periods of time, they might not translate so well across the pond. Particularly in an office where people have a heavy workload and can’t take breaks or in businesses where most people usually work from home.
Your business is only as healthy and engaged as its employees. Which makes an investment in your employee benefits package an investment in your business. Find out which benefits to introduce in the second part of this series. For a wide range of HR services, get in touch with Pace HR on 0208 016 3029 or at info@pace-hr.com.
