Steve Powis
Senior Private Client Adviser
If you own a business and struggle to recruit great staff, you’re not alone. Indeed, research published by SME has revealed that 3 out of 4 UK businesses feel hiring has become harder in the past five years.
Finding good quality staff can be like looking for a needle in a haystack. And, retaining the best talent can also be challenging in a world where your rivals might be looking to poach your best people.
One excellent way to make yourself stand out from the crowd is by offering an attractive employee benefits package.
Research from Canada Life reports that over a third (34%) of UK workers, equivalent to 10.8 million people, have been swayed to accept a job because of a competitive benefit, perk or company policy.
Moreover, People Management reports that more than half of 18- to 34-year-olds believe a good benefits package is the most important thing they look for when searching for a job.
Dan Crook, Protection Sales Director at insurer Canada Life, says: “Employees are clearly now viewing benefits packages as a crucial deciding factor when thinking about joining a company, staying in a role, or leaving”.
Offering a comprehensive benefits package can help you to attract and retain talent – and it can have financial benefits to your business. If you haven’t reviewed your package recently, here are five perks to consider.
1. A competitive pension scheme
As a business owner, the Pensions Act 2008 requires you to put certain staff (those aged between 22 and State Pension Age and whose earnings before tax are at least £10,000 a year) into a workplace pension, and pay into it.
So, it’s likely that these auto-enrolment rules mean you already have a workplace pension scheme in place.
But when did you last review it?
As an employer, you probably set up a pension scheme when you had to with one of the popular providers such as NEST or The People’s Pension.
However, just as your business may have grown and developed, the choice of pension schemes has also increased. There are now lots of providers who offer valuable additional benefits that enhance your offering to staff.
A recent report in Money Age suggests that, as an employer, you should review your defined contribution (DC) pension provider every three years and be more open to switching pension schemes.
The benefits of reviewing your provider and switching your workplace pension scheme can include:
- More competitive charges
- Salary sacrifice options (see below)
- Access to financial wellbeing and guidance
- A broader range of investment options that can help your team to more actively manage where and how they invest, in line with their goals and ethics
- Easy online access, making it easier for employees to engage with their pension.
Regularly reviewing your pension benefits could allow you to better align your business objectives with the needs of your employees.
2. Access to financial planning and support
According to a report by PwC, 1 in 3 full-time employees says that money worries have negatively impacted their productivity at work.
If this applies to your team, they may be more distracted, less engaged, and more likely to seek another job.
One positive way that you can add value is to give your employees access to financial support and planning. This might be through a free one-hour session with a financial planner, or access to informative webinars and educational content about financial planning issues such as pensions, protection, or saving. At the most practical level if your staff are planning their next or first property purchase and need a mortgage, we would be glad to assist in providing guidance, and individual advice as appropriate, and we can provide details to help you promote this as a benefit to your staff.
Providing access to a financial planner could reduce your employees’ financial anxiety by enhancing their financial knowledge and boosting their confidence when it comes to managing their money.
3. Salary sacrifice
Under a “salary sacrifice” scheme, your employees can sacrifice part of their salary in exchange for other benefits. These might include:
- A company car
- Childcare vouchers
- The Cycle to Work scheme
- Gym membership
- Additional pension contributions.
Matching or offering enhanced pension contributions can work out to be an excellent perk for both your employee and your business. Under this arrangement, your employee accepts a reduced salary in exchange for increased employer contributions to their pension.
This can help your employees plan for their future and reduce any stress they feel about their long-term financial security.
Your employer reduces their taxable income and so pays less in National Insurance contributions (NICs). Moreover, as an employer, you could save on employer NICs, that you could then choose to use to boost the pension contributions you make.
4. Illness and life protection
Adding protection benefits to your package can be a win-win for both you and your team.
From an employee perspective, having adequate protection can give them invaluable peace of mind and financial support when they need it the most. Additionally, you can benefit from assistance in getting employees back to work more quickly, reducing absenteeism.
There are many types of protection available, and your offer will likely depend on the needs of your employees and your budget. Two of the most common employee protection benefits are:
Income protection
This can provide your employees with a regular income if they are unable to work and it could also provide rehabilitation and return-to-work support where needed.
Your team benefit from the peace of mind that they will receive an income if they have to take time off, and the support services can help them return to work more quickly.
Death in service benefit
Here, an employee’s family receive a tax-free lump sum if the person dies while in your employment. The amount is usually a multiple of the employee’s annual salary – typically two to four times – and there is usually no ongoing cost to the employee.
Enhancing the protection benefits can help your team to feel valued, increasing loyalty and retention.
5. Private healthcare
In February 2024, the BBC reported that the published NHS waiting list stood at 7.6 million, although the true scale of the backlog is thought to be much higher.
Consequently, it’s perhaps no surprise that City A.M. recently reported that private healthcare is “the latest front in the war for talent”.
Alex Perry, chief executive of Bupa UK Insurance, said: “We’ve seen strong demand for our health cover over recent years, more than anything from businesses recognising the increasingly important role they play in supporting the health of their people”.
Providing private health insurance could give employees access to specialist care when they need it, enabling them to return to work sooner. Additionally, adapting your benefits to include healthcare perks can establish you as an employer who cares about and listens to their people.
This may help you to attract the talent you need and retain your best people – all while enhancing employee financial wellbeing.
Get in touch
If you want to enhance the benefits package you offer, we can help. Many financial benefits have tax advantages in addition to helping you attract and retain talent, so get in touch to find out how we can support you and your business.
Please give us a call on 020 7400 4700.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Workplace pensions are regulated by The Pension Regulator.
