Surely all employees would welcome the introduction of a benefits package and embrace the opportunity to access selected products and services at a discounted rate. According to recent statistics, it’s high on the agenda for employers too.
We conducted a survey of over 4,000 of our customers and their employers and found that 80% of HR and benefits managers think that it’s important to offer staff a wide range of benefits. Around a third consider growing their employee benefits offering as being critically important to the business, so it’s possible that we’ll see it becoming something of a priority for senior managers.
But while entrepreneurs tend to understand the value of employee benefits, not all of them are equipped with the necessary guidance and knowledge to help them implement it firm wide. It’s easy to dismiss employee benefits as a costly and time-consuming burden, and many small business owners may particularly feel that it’s beyond their budgets. However, that’s where benefits such as salary sacrifice schemes come in.
A salary sacrifice scheme is a benefits system that allows employees to give up part of their wages to pay for certain items free of tax and National Insurance Contributions (NIC); like Phonescheme, which gives employees discount to the latest smartphones. The money to pay for the smartphone is taken directly from their salary in monthly instalments and the employee makes savings on their NIC and tax contribution. But your employees won’t be the only ones financially better off, employers can save money by paying less in NIC too.
Employee benefits being a time-consuming responsibility is another myth that needs to be busted. As a small business owner, it can be difficult to manage so many departments, and managing an add-on like employee benefits simply might not be feasible. Many employee benefits providers offer a fully managed service, meaning that you don’t need to take care of the onerous admin that comes with a benefits scheme.
That said, establishing a successful employee benefits package requires some thought. When selecting a provider, take into account the demographics of your workforce to increase the chances of uptake. Your younger employees might be keen on saving money on the latest gadgets, while parents might be more drawn to benefits like childcare vouchers. It’s important to offer benefits that staff really need or want and which support their lifestyles, and salary sacrifice schemes can help do this.
But no matter how tempting the benefits package, it may still prove a challenge to gain interest from staff. Salary sacrifice can be a confusing concept for many, so remember that it may take some educating from your part to help staff understand what it means. Employees might understand the cost-savings better when it’s put into context, so encourage them to work out how much money they can save when using a particular scheme.
Your benefits provider might offer a savings calculator that makes it easier for employees to find out how much they can save. And further down the line when you’ve seen employees sign up to schemes, talk to them to find out what they think of them and share any success stories with the rest of the organisation. Recommendations from other colleagues may help garner further interest from staff in the benefits schemes you offer.
Employee benefits are no longer expensive luxuries that only their bigger competitors can afford. By signing up to schemes most in demand from employees, and promoting it on an on-going basis, you can make it a valuable asset for your business.
By Stephen Holt, commercial director at Grass Roots, Employee Solutions