The Best Employee Benefits Schemes
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Our HR Recruitment Team is regularly asked about employee benefits schemes; what other organisations are doing, how their HR contacts can improve their own packages, staff retention, and so on. A company's employee benefits packages could make all the difference when attracting the very best talent while retaining the excellent staff they have. This is especially true in the small businesses sector, which accounts for 99% of businesses in Scotland, as there is fierce competition to attract the skills they need.
We recently conducted some research to find out what candidates look for in new opportunities; you can read the results here and find more statistics throughout this article. We discovered that 77% of candidates may research a company's values before accepting a position - this guide will give you an idea of what is currently being offered on the market and provide some food for thought on how to develop a more creative benefits package.
Having spoken to a number of our closest clients, it seems, particularly within the financial services sector, that the basic holiday allowance is definitely something that will have an impact on your potential and current employees. Our research found that 60% of candidates felt that the holiday allowance was an important factor when applying for a job. It’s probably not an area that yields a great deal of flexibility during negotiations, however many of the larger organisations are able to offer a sliding scale:
- 1-5 years - 28 days (including bank holidays)
- 5-10 years - 32 days (including bank holidays)
- 10-15 years - 37 days (including bank holidays)
- 15+ years - 42 days (including bank holidays)
Although, the increase in holiday allowance after 10 years of service is more likely to be a public sector rather than a private sector benefit.
Pension contribution is another factor that contributes to a basic package and a little under half (48%) of candidates regard it as an important benefit when considering a new role. There is a minimum pension contribution requirement that employers must meet which is managed through an auto-enrolment process.
However, for many employers, this is an opportunity to differentiate from the competition and attract the right people. It is, however, very dependent on your target market. Despite the fact that the world has changed - people are living longer and the requirement for significant support after working age has increased - those in the early stages of their career don’t seem to see pension contributions as a key factor. In terms of a benefits package, a stronger pension offering is perhaps something appealing to a more experienced candidate.
Additional Employee Benefits
Finding additional employee benefits, beyond the basic package, is commonplace now. A few common perks are:
Cycle to work scheme
This provides the employee with a pre-tax loan to buy a bike from a set provider such as the cycle scheme. The repayments are detracted from their salary before tax, making a healthy lifestyle more affordable and accessible.
This is a great incentive as it makes a large purchase more affordable while also promoting a healthy lifestyle - and a healthy tax break! Properly marketed this could be a real benefit to employees, particularly younger people and those with a short to medium commute.
Subsidised travel pass
In many major cities, there is a necessity to travel to and from work on public transport with little prospect of accommodation near the office. This can often run to thousands of pounds per year, so some employers, normally larger operations, are offering travel subsidies. When so much of an employee’s wage is spent on travel it can make the difference between accepting a job or not, as well as helping to retain the staff you have.
Another significant cost to young families is childcare. Much like travel, this can be a significant proportion of an employee's income. Some employers team up with childcare voucher suppliers (see the list below) to offer a pre-tax benefit where the nursery fees are paid directly from the employee's gross wage. While this may amount to a small saving, it is nevertheless a popular benefit.
Company mobile / laptop – job dependent
For some jobs a company laptop and mobile phone are essential pieces of kit. Given the fact that most organisations operate online now, the likelihood of asking someone to use their own laptop to complete company business is unlikely. Not only does this open up a litany of security risks, it also adds significant wear and tear to a person's personal property. Having a company laptop or phone that can connect to your central network, so an employee can access their files from anywhere, is almost a necessity if the job involves any kind of travel. Most people will now be able to access the various inboxes and social media channels on their personal phone, but to many giving out their own personal mobile number is just not acceptable - and let's not forget GDPR.
So while these could both be seen as a benefit they are often a necessity in today’s modern workplace.
Some sales roles come with a company car or fuel payments if the employee is frequently required to be out on the road. However, there are some roles, particularly within the financial sector, where a car allowance is offered as part of the package despite the role not requiring much travel. This can be offered either as a one-off payment or in staggered payments for a car. This provides a tax benefit to the organisation and gives them an additional benefit to negotiate with.
Building The Culture
However, in addition to these benefits, it’s clear there is an ever-growing focus on building the right culture within the workplace. Many businesses are competing for the best resources on a very tight budget; there is great research out there that highlights the attraction of the right culture to candidates and the fact that wages aren’t the main driving factors when people look for a business to work for.
These aren't what you would class as a traditional benefits package, but they can have a real impact:
Working life has changed a great deal. Increased connectivity has afforded us greater flexibility, meaning people are able to fit their jobs around their busy home lives. While this isn’t possible for every job, it could be a hugely attractive proposition - particularly to those with young families. There was an interesting study carried out by Ctrip over nine months to test the impacts of flexible working. They found that not only were those who worked from home happier and less likely to quit, but they were also more productive – 13.5% more productive. This also resulted in a saving of $1,900 per employee over the nine months.
Flexible working hours
In a similar fashion to home working, flexible hours can enable many busy people to fit work around whatever is going on in their lives. It is vitally important that employers realise the value of a productive staff and retain their top talent. If people have commitments outwith work that can be accommodated by flexible working, you will be more likely to retain that talent. It's also incredibly important to attract new staff - 57% of candidates consider it important when applying for a job.
There may still core working hours, likely between 10:00 – 16:00, but the flexibility to fit your working hours into this structure could make a real difference.
Reducing the working week
This is an interesting concept being trialled by a few different companies. Administrate, one of Scotland’s top tech start-ups has a four day week; 32 hours. They are not allowed to work for anyone else on the fifth day; they're encourage to use that day for rest and recuperation.
A number of the Scandinavian countries are testing different working practices to find a more productive balance for their workforce. Denmark has been highlighted by the OECD as having the best work-life balance. Only 2% of Danes work long hours - fairly impressive when you consider the average is 16%. They have a greater level of flexibility in their working day; choosing when they start, having the option to work from home and enjoying a designated lunchtime with colleagues. They also enjoy a minimum of five weeks of paid holidays.
Sweden also completed a study at the end of last year where they tested a six-hour working day with nurses in Gothenburg. While the results were positive in terms of patient care, reduced sick leave and a healthier outlook, it was deemed too expensive in terms of the resulting cover that was needed; roughly £1m over the two-year study.
A number of smaller businesses do try to roster in regular Friday drinks, perhaps once a month, where everyone can gather in the boardroom and chat about their week or find out what’s happening at the weekend. In its simplest form this is just about the workforce getting together and encouraging engagement in a social environment.
Another approach, which is probably more pertinent to smaller businesses who have one office, is recognising the value of your staff and the long hours they have put in on a project or over a particularly busy period by closing the office early. It could be to grab some food or to have a few drinks to make employees feel valued.
This isn’t something you’ll put in a job description, but it's something you can promote through social media and help build your brand personality.
Team day out/team building days
Building a team is not easy and in some environments,s such as sales, it can be a challenge to foster a real team culture. Another of the findings from the OECD report highlighted how important ongoing staff interaction was, such as lunch with colleagues, in regard to team cohesion. However, for some, this isn’t always an option.
Building in a regular team building programme could be a very worthwhile investment. Brian Scudamore in Forbes advises against the corporate approach all too familiar in The Office, however, there is great value in encouraging and enabling leadership throughout your team. The core takeaway is encouraging people to collaborate and find commonality.
Dress down days
This is perhaps not relevant for those start-ups where relaxed attire is the norm, but for more corporate operations the opportunity to dress down is a great way to create a more relaxed atmosphere around the office. Whether you fold it into a charity contribution or just make it a matter of course on a Friday, it is often well received by staff.
Breakfast or fruit delivered to the office
Tying in with the health benefits of exercise, offering fruit to the organisation on a regular basis is a great way of promoting healthy lifestyles while also showing you care about the wellbeing of your staff. There are a number of companies such as Fruit in the City that will deliver fruit for the staff to enjoy as part of their daily routine.
This would only work in very specific circumstances (with the right animals, the right workplace and staff, and so on), but there are proven benefits to allowing animals in the office. Not only does it reduce staff stress, it also means your furry friends aren't left at home alone during office hours.
Creativity and culture are the key takeaways to finding a refreshing approach to your company's benefits. While there is a cost involved, building a portfolio of company benefits that suit your workplace will appeal to exactly the people you want working for you and provide a good return on investment as productivity rises and sick days drop. If you'd like to discuss creative ways to improve your employee benefits package drop us an email or give us a call and we'll find the right solution together.