What are employee benefits?
Employee benefits is a relatively broad term used to describe elements of a company’s reward package beyond basic pay. The benefits provider, People Keep, describe employee benefits as, “any forms of perks or compensation that are provided to employees in addition to their base salaries and wages”.
Why are employee benefits important?
Employee benefits are increasingly important for both employers and employees. From an employer’s perspective the benefits they offer can help them to stand out in a hugely competitive jobs market and help them to appeal to job seekers, and then keep hold of them once recruited. For employees the benefits they are offered can make a big difference in various aspects of their lives, particularly given the drive for improved work life balance and with the backdrop of the current economic climate. In considering the importance of employee benefits, the CIPD states that they are, “a way to attract and keep people, contribute towards improving wellbeing, and encourage required behaviours, achievements, values, and skills”.
Top Benefits
Whilst this list won’t be the same for every employee and we have not conducted a wide reaching survey of employees to compile a definitive list, we believe that these 5 employee benefit will be near the top of the list for many people:
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Flexible Working
The pandemic challenged the way many people think about work and changed the way that lots of us work forever. A major priority for many employees now is to work for an employer that offers them flexibility in how, where and when they work as that helps them to achieve a better work life balance and improves their wellbeing. As an employer if your business is able to operate flexibly then this is an employee benefit that you must consider. You could offer flexible hours around a core working day, if possible allow staff to work from home for at least some of their working week and even consider moving to a 4 day working week if that’s something that staff would want. Interestingly, 89% of companies involved in a recent trial of a 4 day working week are continuing to implement it after the initial trial period.
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Mental Health & Wellbeing Support
In a 2023 survey, 40% of respondents stated that they value mental health and wellbeing support as an employee benefit and in recent years as more people have experienced challenges with their mental health and wellbeing these employee benefits have increased in popularity. How these types of benefits operate will vary depending on the providers and the level of benefits that employers sign up to. Employees can use them as valuable additional support as and when needed for things like confidential support lines to discuss all aspects of wellbeing, counselling services, signposting to additional professional support and even health checks and online GP services. Employers should therefore consider how they can support staff and what type of benefits they can offer in this area.
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Sick Pay
For many people when they are absent from work they quickly start to worry about money as under the terms of their contracts they are only due statutory sick pay (SSP). The CIPD’s Health & Wellbeing At Work Report 2023 highlighted that 87% of respondents had observed presenteeism in the last year. For many people dropping to SSP is something that they literally can’t afford to do, especially given the cost of living crisis and this then drives them into attending work despite being unwell, classic presenteeism. Widespread presenteeism means that not only are staff attending work when they are ill, but in doing so they are less productive in their roles and are also likely to pass on germs to colleagues which will then have a knock on effect for those people and the wider business. Employees therefore see enhanced levels of sick pay as a valuable benefit. Levels of enhanced sick pay are typically tiered according to an employee’s length of service and whilst there is a cost here for the business that can be offset to some extent by taking out an income protection policy. Enhanced sick pay of some kind is well worth consideration by employers as it is a benefit that goes beyond purely financial aspects and takes into account the stress that being on SSP can create and how that can exacerbate someone’s illness.
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Annual Leave Entitlement
As we have already seen, work life balance is a deal breaker for many employees and the ability to take time away from work to rest and relax is essential. Many employers only provide the statutory minimum holiday entitlement of 28 days per year for full time employees and employees want more than that as once bank holidays are taken into account they are left with just 4 weeks of holiday which can quickly be used up. Increasing annual leave entitlement is a valuable employee benefit and it is simple and cost effective. Increases in annual leave entitlement can be linked to length of service which can assist with employee retention. Some employers give staff an extra day off to celebrate their birthdays or other significant life events, some offer paid “duvet days” and others even allow staff to take unlimited annual leave.
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Discount Schemes & Salary Sacrifice
Numerous employee benefits providers offer discount schemes which help employees to save money on a range of goods and services and these schemes are increasing in popularity due to the current economic environment. These schemes can be created to reflect the needs of employees and what they actually want discounts on. Salary sacrifice schemes can also be implemented to provide tax efficiencies which allow staff to then benefit from things like boosting their pension, buying an electric vehicle or even receiving shopping vouchers. Salary sacrifice schemes can be complicated so it is worth taking advice before setting them up and it is important that staff are aware of exactly what they are signing up to.
It is important for employers to understand that an employee benefits package is only going to work well if the benefits offered are actually wanted and used by employees. It is utterly pointless to offer a range of benefits to staff if they are of no interest to them and don’t meet their needs. Make sure you talk to staff, find out what they value and then look to create an employee benefits package that works for them and the business. Once you have a package in place keep it under regular review. Check to see which elements are popular and are being used, and also which aren’t, and then if necessary you can amend the package so that it stays relevant and retains its value to employees.
Do you have any questions about todays blog, need help in becoming legally compliant with contracts/policies or can we support you in taking away any people pains to give you peace of mind?
If you answered yes to any of the above, just give us a call at CUBE HR on 01282 678321, or book in a FREE 30 Minute HR Health Check here FREE HR Health Check and we’ll happily give your business a full HR overview with our personal recommendations absolutely FREE!
Why not also check out our blog on a similar topic How To Retain Your Staff
We also have a YouTube channel with loads of handy videos outlining various HR related scenarios.
