The key, perhaps, is to review all the other benefits – briefly unearthed by the auto-enrolment slipstream – that have remained forgotten or unchanged for years.
As the working demographic continues to shift, staff benefits are more than just protecting finances. With 80% of employees admitting they’d feel more positive towards their employer if better health and wellbeing benefits were on offer1, doing nothing really isn’t an option.
What you need to think about
So what are the points you should consider in order to create a benefits package that is right for your business? Unum provides some guidance.
- What are your objectives?
Are you looking to grow and if so, how fast? Or will you have to lose people? If you are growing, what benefits will help attract (and keep) the most talented people? If you are shrinking, it’s essential each benefit is used and valued – and not dead money.
- Who works for you?
A younger demographic is likely to be less attracted to childcare vouchers or things that kick in decades in the future, unlike 40-somethings.
- What’s your budget?
For many small businesses money is always tight, but with stats showing it can cost around £30,000 to replace a staff member 2 an attractive benefits package can help retain valuable expertise and experience.
- What's the competition doing?
If your competitors are hoovering up all the talent, there’ll be a good reason. Some insurance companies can provide you with analytics to help show what your peers are doing and shine a light on where you can raise your game.
- Not sure? Ask!
When you are deciding what benefits to put in place, the onus doesn’t have to be on the senior management. Not only can asking your staff what they’d like to see as part of their benefit package guide buying decisions, it provides instant employee engagement and helps take-up – ensuring money’s well spent.
Pretty much a benefit staple, most people know life insurance written in trust provides a tax-free lump sum to an employee’s loved ones if that employee dies, helping relieve money worries at a difficult time. While there’s little direct return for the business, companies that offer it are seen as a company that cares.
If life cover’s already in place – and chances are it is – it’s worth mentioning that reducing the size of the pay out, typically from 4x salary, can help free up funds for other benefits.
Income Protection and Sick Pay Insurance
Income Protection and Sick Pay Insurance provide a regular replacement income if an employee can’t work because of illness or injury – for the long-term and short-term respectively (though neither covers redundancy).
As well as making sure an employee is financially secure, Income Protection can help a business manage its sickness absence costs, and help with wellbeing and resilience through medical expertise and an Employee Assistance Programme, (typically built-in to many Income Protection policies).
For the smaller business, short-term illness can be harder to manage than long-term. Sick Pay Insurance removes the problem of supplementing Statutory Sick Pay and ensures everyone’s treated the same. It can also help companies keep tabs on employee absences and spot issues or trends.
Personal Accident Insurance (PAI)
PAI pays out a one-off, tax-free lump sum if an employee suffers a permanent injury or total disability following an accident. For the employer, PAI can also pay for a temporary or replacement employee or cover overtime. Just be aware that clients sometimes confuse PAI with Income Protection.
Medical Cash plan
Essentially ‘PAI-lite’, a medical cash plan covers minor health issues like basic dental work, physiotherapy and chiropody – all helping employee wellbeing.
Private Medical Insurance (PMI)
Another regular component in employee packages, PMI pays for private medical care for non-emergencies and acute conditions where treatment is likely to help. As well as enhancing the firm’s reputation as a caring company, private medical insurance is usually far quicker than NHS care, reducing absence, easing the burden on colleagues and cutting the cost of overtime or temps. However, it does come at a price, with policies typically starting from £50 per employee per month.
Critical Illness insurance
With Critical Illness, the employee receives a tax-free lump sum if they suffer any of a list of defined medical conditions or surgical procedures – classified as critical illnesses – and survive for a set amount of days afterwards. This typically includes conditions such as cancer, heart attack and stroke. It’s another benefit that shows a company takes the health and wellbeing of its staff seriously.
Employee Assistance Programmes (EAP)
An EAP offers employees support for a wide range of work/life issues and also often includes counselling and Cognitive Behavioural Therapy. They typically include employer support too, including advice for managers and access to legal expertise. By providing employees with access to support when they need it, they’re likely to be more focused and productive in the workplace.
And remember that an EAP is often included with a benefit like Income Protection or even Critical Illness – 2 for the price of 1!
And don’t forget all those little extras that can be valued just as much as core benefits, and which really round out a benefits package. Flexible working can help ease stress levels while subsidised gym membership or cycle-to-work schemes can encourage staff fitness.
And finally, once you have devised your new or improved benefits package, don’t forget that you need to tell your staff all about them. Chances are everyone knows they have a subsidised restaurant, gym membership or free eye tests, but those less tangible benefits like Income Protection can easily slip through the cracks.
When employees know about and understand what’s on offer, whether that’s the financial aspect or the wellbeing support, take-up increases, ensuring they get the full benefit, while the company gets the return on its investment.
1 Investors in People research, February 2014
2 Oxford Ecomonics, commissioned by Unum: ‘The Cost of the Brain Drain’, February 2014
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At the end of 2015, Unum protected over 1.4 million people in the UK and paid claims of £294m – representing in excess of £5.5m a week in benefits to our customers – providing security and peace of mind to individuals and their families.