A really great salary sacrifice scheme can deliver fantastic value for your employees and your organisation: attracting new employees, helping to retain those already in the business, improving motivation and productively levels, and enhancing employees’ lives by providing them with goods and services at a reduced cost.
However, not all salary sacrifice schemes are equal! While most will provide some benefits to employer and employee, others can really deliver great value making a difference to all parties. So what’s the difference between a really great scheme and a mediocre one? Relevance.
The salary sacrifice schemes that deliver the most value are the ones that are most relevant to your employees.
If you’re not sure whether your organisation and your employees are getting the value you could out of your current scheme, address the following points:
Who’s signed up to your scheme?
Out of all the employees the scheme is available to, how many have actually signed up? This figure, or percentage of the workforce, can be very insightful if there are a number of schemes available. Look at what’s most popular and what’s not interesting your staff.
Who’s actually using the scheme?
Many employees will sign up for a scheme initially but then never use it, or their use tails off. Could be that your employees thought the scheme sounded like a good idea, but actually haven’t got a great need for it.
Are they making savings?
The point of salary sacrifice schemes is to save money on cars, gym memberships, mobiles, technology and other goods and services that will make a difference to your employees’ lives. They will also save money on their tax and NI because the salary sacrifice amount is taken before tax and NI are deducted. Check that the scheme is offering genuine savings and that these are sufficient to be a real incentive for staying with the organisation.
Do you have something for everyone?
Offering a variety of incentive schemes, especially if you have a large and diverse workforce will ensure that everyone can find something that works for them. However keen you maybe to get all your staff cycling to work, not everyone will want to do this or can. Therefore it’s advisable to find a provider who can offer a number of different schemes so your staff can pick and choose.
Is it easy for staff to use?
One factor that is sure to put people off is a complicated process to access the scheme. Time is money and if your employee is time poor they’ll delay using the system until another time, and potentially never get around to it.
We would advise all companies to review their salary sacrifice schemes on a regular basis to make sure they are doing exactly what they’re designed for. It could be that the scheme you chose five years ago is no longer relevant to your workforce, or that other options would be more attractive.
By Richard Ellis, Sales & Marketing Director, Connected Benefits