Why do companies need to offer employee benefits?
It’s an employee’s market. Unemployment is at a low and job seekers are able to search through thousands of jobs on their phone in an instant. They quite literally hold the power in their hands.
And whilst employee benefits will never outweigh a fair and competitive salary, they form an important part of an employee package that candidates seek. There is a requirement for both salary and solid benefits, and striking the right balance can make all the difference when looking to recruit.
When strategically selected, employee benefits are beneficial for both employer and employees. A carefully curated benefits package will attract the best talent to fill roles. If centred around health and well-being, employers will also reap the rewards of a healthy and motivated team.
On the other side of the coin, employees can tell a lot about an organisation’s culture from the benefits they offer. Dynamic or traditional? Set or flexible working hours? Employees can reduce their personal monthly outgoings if a benefits package locks into their existing outgoings (private medical care, gym memberships etc.). They can also enjoy the novelty aspects of certain benefits, which can lift morale and productivity, making going to work that much more fun.
Which employee benefits are most popular?
The basic level of employee benefits include above statutory annual leave, a fair sickness leave policy, as well as a good maternity or paternity package.
Traditional benefits can be expensive to implement and offer, but will draw the best talent towards your organisation. Such benefits include private medical and/or dental care, company cars, phones, laptops and iPads.
But it’s not all about splashing the cash. Smaller scale but equally effective benefits include having a year-round supply of biscuits and fruit in the office, good coffee, perhaps a monthly team lunch. Other suggestions include staff discounts, good training and development opportunities, an extra days’ annual leave on your birthday, offering sabbaticals and secondments, and increased annual leave entitlement in line with years of service. Incentives, such as rewarding employees with a prize if they meet targets, are also well received. For example, one business we work with rewards the team with an office lunch at the end of the month if they meet their company target.
Smaller businesses can use the opportunity to get creative and contribute to the economy of the local community at the same time. Speak with local shop keepers, restauranteurs and bar owners to work out a discount scheme that your employees can enjoy. The businesses will increase their customer base, and your employees will enjoy both receiving a discount and supporting local independent businesses. For employers, it will cost very little to implement.
Flexible working can be practically free to implement too, and is a real pull for would-be employees. Finish early on a Friday, draft a working from home policy or bring in flexitime. This works especially well in organisations with a creative outlet.
Whatever you think is the right fit for your team, choosing benefits that your staff really want will simultaneously create a more productive team and reduce staff turnover.
Generational benefits: making a difference?
Remember to follow the law when curating benefits packages. Whilst is it perfectly fine to offer different benefits to different people, you cannot do so in a way that discriminates against gender, race, age, or other demographics. Refer to the Equal Employment Opportunity Commission (EEOC) recommendations for more information.
The level of job you are trying to fill will influence the benefits on offer. Generally speaking, very senior roles in most industries are more likely to be filled by Baby boomers than millennials, so set the benefits package accordingly. Conversely, entry-level jobs are likely to be taken by millennials or Gen Z.
Millennials tend to prioritise cultural and lifestyle benefits: think gym memberships, flexible working, Monday lunch yoga, Friday beers.
However if you’re looking to attract more experienced people for very senior roles, these benefits might not hit the spot. Baby boomers will generally be more enticed by a package that includes an attractive salary level that takes into consideration their wealth of experience, a generous pension scheme, life insurance and private healthcare.
Think carefully about who you are trying to attract to which roles, and ensure your benefits are appealing to them.
Although we can’t predict the future, there is a clear direction that employee benefits are taking. In 2019, we expect the following to trend:
- Customised employee benefits
The end of the ‘one size fits all’ benefits packages. There is a whole marketplace of online benefits package systems and providers that will enable employees to pick and choose the benefits that they want to enjoy.
- Student loan assistance
The average student graduating last year in England is lumbered with around £34,800 of student debt. Employees who offer to help alleviate some of this financial burden will be very popular.
We hope you found this article useful. If you would like more information on finding the right pay and benefits balance for your organisation, contact our team today.