The Best Employee Benefits Schemes
Our HR Recruitment Team are asked on a regular basis about employee benefits schemes, what other organisations are doing and how their HR contacts can improve their own packages. Closely related to staff retention the employee benefits packages could be the difference between attracting the very best talent while retaining the excellent staff you have. This is especially true in the small businesses sector, which accounts for 99% of businesses in Scotland, as they compete to attract the skills they need.
So we thought we would put together our guide on what is being offered on the market which will hopefully provide a suitable comparison and 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. It’s probably not an area that can provide a great deal of flexibility for negotiation, however for many of the larger organisations they 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 service is more likely to be a public sector rather than a private sector benefit.
Pension contributions are another area that make up the basic package. There is obviously now a minimum pension contribution requirement for employers that must be met and an auto enrolment process.
However, for many employers, this is an opportunity to differentiate from the competition and can attract the right people. It is 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 that is more appealing to a candidate more experienced.
Additional Employee Benefits
Finding additional employee benefits, beyond the basic package, is what employers are now looking at. Commonplace nowadays are perks such as:
Cycle to work scheme
This provides the employee with a pre-tax loan to buy a bike from a set provider such as the cyclescheme. 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 larger items more affordable while the employee is encouraged to benefit from the use of the bike and they get a small tax break at the same time.
Sold properly this could be a real benefit to employees, particularly younger employees.
Subsidised travel pass
In many major cities there is a necessity to travel to and from work on public transport with little prospect of dwellings near the office. This can often run to thousands of pounds in some cases so certain employers, normally larger operations, are offering travel subsidies. When so much of an employee’s wage goes on travel it can make the difference between accepting a job and not.
Another significant cost to young families is the cost of childcare. This again can be a significant proportion of an employees income. Some employers team up with childcare voucher suppliers (see list below) to again offer a pre-tax benefit where the nursery fees are paid directly from the employees gross wage.
While it is a small saving it is a popular benefit.
Company mobile / laptop – job dependant
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. The fact that most people will need the relevant company files if they are onsite for work makes it almost a necessity if the job involves any kind of travel.
Again, the benefit of a company mobile if the job involves any sort of travel will be a must. 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.
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 required to be out of the office a great deal. However there are some roles, particularly within the financial sector where there is a car allowance 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 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. As aforementioned many of these 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.
So we are seeing a big focus on building the right culture. This isn’t what you would class as a traditional benefits package but it can have real impact.
Working life has changed a great deal and the flexibility that increased connectivity has afforded, means people are able to fit their jobs around their busy home life. While this isn’t possible for every job, it could mean a great deal particularly to those with young families. There was an interesting study carried out by Ctrip over nine months to test the theory. They found that not only were those that worked from home happier and less likely to quit but they were also more productive – 13.5% more productive. This also resulted in a $1,900 per employee saving 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 the talent. If people have commitments out with work that can be accommodated with flexible working you will be more likely to retain that talent.
There are still core working hours 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. Their team work 32 hours per week. They are not allowed to work for anyone else on the fifth day, they are 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 which is 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. There is also a minimum of five weeks 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 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 all getting together and encouraging engagement.
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 perspective but it something that 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 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 staff interaction was in situations such as lunch with colleagues. However for some this isn’t always an option.
Building in a regular team building programme will 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
Again this is perhaps not relevant for those tech start-ups who spend their day in more relaxed attire 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 is the chance to offer fruit to the organisation on a regular basis. 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.
Creativity and culture are certainly the key takeaways to finding a refreshing company benefits approach. While there is a cost involved, building a portfolio of company benefits that will appeal to exactly the people you want to work for you and that you can be proud of will provide a good return on investment as productivity rises and sick days drop.