Some key components to consider for a competitive workplace benefits package
The workplace is very different to what it was, even five years ago and with this, what employees look for to feel rewarded has shifted.
A number of changing factors, such as the shift in flexibility around working from home, are making what is already an incredibly competitive job market even more difficult. It has become more important than ever to look at what you offer to staff to retain your team and attract new talent to your business.
We have seen a shift to a robust benefits package being a key differentiator for employers seeking to attract and retain top talent. Employees who value their benefits are far less likely to look or be tempted by other employment offers.
As we discuss in our blog on Employee Value Proposition (EVP), employees are looking for benefits beyond pay. One aspect of your EVP is your tangible benefits package.
What is provided over and above salary will either leave staff feeling looked after, or that the employer does the minimum. Employers can choose what they offer, and benefits can vary for individuals or groups of individuals based on the importance to the business. Often you will see more senior positions have a more rounded package overall. While some benefits provide financial wellbeing, others will focus on physical and mental wellbeing.
Here is a closer look at some of the essential components of a workplace benefits package and why they matter to both your business and your employees.
Group protection
Group protection often provides coverage at a lower cost compared to individual insurance policies.
They have no (or simplified) underwriting processes, which means employees with pre-existing conditions or health issues may still qualify for cover.
In most cases, employers contribute a significant portion of the premiums for group protection plans. This reduces the financial burden on employees while still providing cover.
They often come with additional services such as wellness programs, employee assistance programs (EAPs), and/or access to health resources, which can contribute to overall employee wellness and productivity.
Group protection options include:
Private Medical Insurance
A policy that provides employees with prompt access to private healthcare. This highly valued benefit helps you protect your most valued asset, your staff.
Benefits to the employee
- Shorter waiting times compared to the NHS.
- High quality treatment for various conditions.
- Access to GP outwith the NHS.
- Potential to include family members.
Benefits to the employer
- Helps to minimise disruption to the workplace.
- Reduces the cost of sickness-related absenteeism.
- Helps you to recruit and retain the best people.
- Can usually be claimed as a business expense.
Group Death-in-Service
Protects employee’s family and dependants by providing a tax-free lump sum to their beneficiaries should they die whilst still in employment.
Benefits to the employee
- Benefits are paid tax free.
- Option to nominate beneficiaries.
- Peace of mind.
Benefits to the employer
- Can be claimed as a business expense.
- Demonstrates commitment to the well-being of employees' families.
- Meeting expectations as this has become an expected benefit for most roles.
Group Critical Illness
Pays a tax-free lump sum to an employee if they are diagnosed with a serious medical condition covered by the policy, such as cancer, heart attack or stroke.
Benefits to the employee
- Help to cover the costs of medical bills, recovery costs or loss of income.
- Can cover financial gaps not covered by other insurances such as childcare and alternative treatments.
- Flexibility - monies can be spent of whatever the employee sees fit.
- Children’s critical illness cover can be included.
Benefits to the employer
- Helps employees return to work.
- Helps you to recruit and retain the best people.
- Can be claimed as a business expense.
Group Income Protection
Provides employees with a replacement income if they are unable to work due to sickness or accident.
Benefits to the employee
- Continue to earn income during illness or injury.
- Support with rehabilitation, rapid recovery and return to work.
- Wellness support at work to detect and prevent illness or injury before they become threatening.
Benefits to the employer
- Helps to minimise disruption to the workplace.
- Return to work support usually provided.
- A company culture that promotes health and wellbeing.
- Premiums can be claimed as a business expense.
Pensions - Automatic enrolment
Employees view their pension benefits as a key component of their overall package. Legislation provides minimum requirements; however, employers can ensure the pension scheme remains competitive by considering:
- Amendments to how much is paid by the employer as a minimum - enhancing the employees benefit and/or reducing the financial burden on the employee.
- Reviewing the scheme provider including investments, fee structure and add on benefits provided to ensure the best scheme is in place.
- Reviewing eligibility of which employees will receive contributions or enhancements.
- Financial education to allow your employees to understand what is on offer. For example this could be done through online presentations, in person talks and meetings, or regular newsletters.
Employer pension contributions are a huge business expense and employers can consider how to maximise the gratitude and minimise the cost. Employers providing pension contributions under a salary exchange agreement can make a saving to keep or pass on to staff. This can be a very effective for both the employee and employer. Further to the Autumn Budget announcing higher National Insurance Contributions for employers, this could be a suitable way to reduce the long-term impact on the employer whilst leaving staff better off.
Pensions may be something you have to provide and at significant cost, but as we explain further in this blog, rather than them being a sunk cost you can get a positive reflection by making sure staff understand the value of what you provide.
A well-rounded workplace benefits package is not just an add-on; it’s a critical element of your overall Employee Value Proposition. By thoughtfully considering the needs and desires of your employees, you can create a benefits package that not only attracts talent but also fosters a culture of loyalty, satisfaction, and productivity. Investing in your workforce through comprehensive benefits is not only a smart business strategy; it’s a commitment to the well-being and success of your employees.
Get in touch
Johnston Carmichael Wealth works with businesses to recommend and implement to meet your needs. If you would like to discuss this further, please get in touch with me at jennifer.duncan@jcwealth.co.uk.
Johnston Carmichael Wealth Limited is authorised and regulated by the Financial Conduct Authority.
Please note: This communication should not be read as financial advice. While all possible care is taken in the completion of this article, no responsibility for loss occasioned by any person acting or refraining from action as a result of the information contained herein can be accepted by this firm.