When considering the type of employee benefit programmes that are best for your business, the size of the organisation, level of investment and the expectations of your employees should all be encompassed into your final decisions.
It serves businesses well to inform themselves on the types of employee benefit packages available to ensure all the options are thoroughly considered.
Types of Employee Benefits
Employee benefits refer to compensations rewarded to employees from the organisation they work for. There are three types of employee benefits: core benefits, flexible benefits and voluntary benefits.
Core Benefits
The employee benefits will vary from business to business; however, there are some benefit packages that are mandatory for employers to offer their staff, including pension schemes, sick leave and holiday pay.
Flexible Benefits
Flexible benefits allow the employees to choose benefits that are paid by their employers; sometimes non-cash benefits such as childcare vouchers can be selected if it is desired by the employee. Employees have the flexibility to pick and choose which benefits suit them, which can prove particularly popular in workplaces where the needs and requirements of your employees differ.
Flexible benefit packages have been around in the UK since the 1980s, yet over the last couple of years, their popularity has dramatically increased due to numerous findings indicating successful employee engagement from its adoption.
Voluntary Benefits
Voluntary benefits refer to benefit packages that employees pay out of their salary. It is the responsibility of the employer to negotiate a discount with suppliers to allow employees to receive these bonuses at a reduced price. When offering voluntary benefits, it is imperative for your business to consider the time and resources it will take to organise these deals, in addition to making sure you target the right packages to suit your employee’s needs.
Selecting voluntary benefits will mean that employees have to sacrifice a part of their gross salary in order to obtain such deals, and this can be a tax-efficient way for employees to receive benefits.
The Benefits of Employee Benefits
Employee benefits can make a business particularly attractive for prospective staff, as well as a great motivator for current employees. Therefore, upon starting your business, the consideration of employee benefits is an essential element of business planning. A problem that many businesses face, however, is the failure to regularly review their employee benefits, thus missing opportunities to save money. Alongside other factors such as changing patterns of employment and updated processes for independently accessing providers, businesses miss out on the opportunity to re-design more cost-effective employee benefits than they currently have in place.
Regularly updating your employee benefits can also help your staff commit to the company; however, it is important to inform your employees of any changes to their employee benefits packages. The Cass Business School indicates that failing to inform staff about the benefit packages available costs UK businesses around £2.7 billion a year through absences and turnover of staff.
Choosing the Right Employee Benefits
By considering your workforce and their specific needs, you will be able to structure your benefits packages to benefit your staff; subsequently resulting in a happier and more productive workforce. It may be a good idea to ask your staff what incentives they would prefer to be offered to help you make your final decisions.
The issue that many businesses face is that traditional methods of evaluating employee benefit programmes mean that the status quo is defended rather than adapting the programme in the ways that benefit the business overall. The problem with continuing with existing schemes is that it may not be in the best interests of the company because advisors earn a commission that could potentially be lowered if it is replaced with an alternative scheme.
Therefore, employing the services of independent reviewers is essential to ensure that not only a comprehensive audit is achieved, but that money is saved for the business in the long-run. By indicating the type of benefits you want to offer, one of our independent consultants will be able to source the best deals for your business.
The experts at ERA Insurance Cost Management, a specialist division of Expense Reduction Analysts, work directly with clients to ensure the solutions are the best fit for their individual needs. Our employee benefit audits are not only innovative but completely transparent, ensuring that you are provided with a clear picture of the available options through a selection of re-designed programmes that lower business costs but will not compromise the working relationship you have with your staff.
We review employee benefit packages in a focused and expert approach that out-performs the results from traditional project processes and ensures our clients are making the right choices when it comes to expenditure. Our business to business consulting services are second-to-none and have offered cost-effective solutions to thousands of businesses. Get in touch with our experts today to find out how we can help your business organise cost-effective employee benefit packages.
Article by: Chris Coomber