Does that mean it's enough to rely on a generic employee benefits package that only offers basic insurance and holiday pay? Not necessarily.
As an example, consider the following facts about the perk of job flexibility:
- 92% of millennials (the largest population of the workforce) say flexibility is a "top priority" when job hunting
- 30% of UK employees would prefer flexible hours to a pay raise
- Less than 10% of advertised jobs in the UK in 2019 offered flexible benefits
These numbers show a clear gap between what workers want and what employers are offering. If you want to attract and increase employee retention, you have to offer employees a dazzling employee benefits package.
After all, your people are the backbone of your business. Offering a stellar employee benefits package shows you're not just concerned about their health, but their happiness and their future as well.
Are you ready to set yourself apart from your competitors by offering the best employee benefits? In this post, we'll take an in-depth look into why it's so important to provide competitive employee benefits packages.
Read on and get ready to put these tips into action—before you risk losing your best employees!
Why you should offer a competitive employee benefits package
If you don't offer your employees the employee benefits they need (and want), they'll find an employer who does.
It really is that simple—and that serious. At any given time, 60% of workers are considering quitting their current job and seeking greener pastures elsewhere.
A key way to keep your employees happy, healthy, and productive is through an attractive employee benefits package. But it's not just about your employers. Let's consider 4 ways it benefits you and your company too.
1. Employee retention
Employee turnover is more than an annoyance. It's a huge financial blow to your company every time you need to advertise and fill an open position.
Just how high are the costs of staff turnover? It can take 52 days and cost up to $4,000 just to complete the onboarding process. You'll then spend another 6-9 months' worth of the employee's salary training them for the position.
But wait: It gets worse. You also have to consider the cost of leaving a position unfilled. If a position should produce a positive revenue impact of $5,000 per month and it's unfilled for 6 months, then you're losing $30,000 a year.
This is in addition to the costs of onboarding and training the employee who left—and then repeating the process to find their replacement.
Despite the obvious costs, many employers still feel that it's more difficult to retain employees than to hire new ones. This is where HR analytics reports can identify the "weak spots" in your organization and make employee retention easier.
2. Attractive employer brand
What kind of reputation does your business have as a place to work? Employer brand (how employees feel about working for your company) is a vital part of the hiring and retention process.
Simply put, you need to put as much effort into attracting and keeping your staff as your customers.
How can you improve your employer brand? Beyond basic employee benefits, your workers must enjoy a good work/life balance, job security, and a positive work environment.
A great employer brand can expect to see a 28% reduction in turnover and a 50% cut in hiring costs. Isn't that worth any changes you need to make to achieve results like those?
3. Aligns business needs with employees’ needs
When you fulfil your employees' needs with competitive employee benefits, By motivating your employees with the right employee benefits, they'll deliver the performance you need to drive your business goals.
As an example, you can reward employees for their hard work or help employees with subsidized continued education or training. In the long run, furthering their education will only benefit you as an employer.
4. Drives your organization’s goals
Recruiting and retention are essential to your business strategic plan. The less time and money you spend on hiring and training, the freer you'll be to focus on your end goals.
By having a structured employee benefits plan, you’ll support your retention efforts and be ready for future growth. You'll not only attract the best talent, but they'll be happy working for you for years to come.
Implementing employee benefits strategy
Now that you know the importance of employee retention, how can you step up your employee benefits offerings? How can you decide what to include that will be most attractive to your current employees?
Here are a few tips to get you started drafting an employee benefits package.
1. Have a clear vision
First, take a moment to honestly assess how you're performing as a business.
- Are you growing?
- Are you struggling with employee retention?
- Are you struggling to remain competitive as an employer?
Once you've defined your business needs, the next step is to draft an employee benefits strategy for reaching those goals.
2. Look for employee benefits ideas
Silicon-valley companies have redefined employee benefits in the startup and tech world.
People are already past the basic employee benefits packages. Now more than ever, it's time to level up your game to set yourself apart from competitors.
You might not be able to offer unlimited gourmet food or free massages like Google does. Still, even small employee benefits, like casual Fridays or allowing your employees to bring their dog to work, could be a great incentive for them to stick with your company.
3. Analyze your workforce
Bear in mind that all employees are different according to their age and stage in life. This will help you find out what their current goals are and what employee benefits would better motivate them.
You might not be able to design a "one size fits all" employee benefits package that's perfect for everyone. But it does help to analyze the main demographics of your workforce and determine which employee benefits will be most attractive to them.
Millennials, for example, cite continuing education and flexible working hours as their most important employee benefits requirements—even ahead of cash bonuses. They might also be more attracted to time in lieu benefits or gym memberships.
Employees with children, on the other hand, will be more attracted to childcare vouchers or retirement plans. And 70% of adults across all generations are more interested in companies that offer long-term employee benefits.
Financial types of employee benefits
We've talked a lot about the importance of competitive employee benefits. Now let's take a look at some specific employee benefits ideas you might be able to implement as part of your employee compensation strategy.
Which of these would make your employee benefits package shine?
A workplace pension allows your employees to save for retirement that you (the employer) arranges. A percentage of the employee's pay is put into the pension scheme automatically every payday.
Common types of pension schemes include:
- Final Salary Schemes
- Stakeholder Schemes
- Money Purchase Schemes
- Group Personal Pension Scheme (GPP)
How much gets paid in depends on the type of pension scheme and whether your employees opt for auto-enrolment.
2. Share schemes
By sharing company ownership with your employees through share schemes, they'll feel personally invested in the business.
Common share schemes include:
- Share Incentive Plans (SIPs)
- Save As You Earn (SAYE)
- Enterprise Management Incentives (EMIs)
- Company share option plans
Share schemes also allow your employees to enjoy tax advantages as a perk.
3. Travel Loan
Travel loans allow your employees to purchase an annual rail ticket or bus pass. It could also be used to purchase a suitable bicycle and related equipment for their commute to work.
4. Life insurance
This is a company-organised group insurance scheme that provides a lump sum to an employee’s family if they pass away. It may also apply if they're diagnosed with a terminal illness while working for your company.
When the employee passes away or receives a terminal diagnosis, a claim is made to the insurer. Also known as Death in Service, it offers bereavement and other benefits to surviving family members.
5. Income protection
Group income protection insurance provides financial benefits and rehab support if an employee can't work due to long-term illness or injury. It provides continued income for incapacitated employees, helping to alleviate money worries.
6. Paternity pay
New fathers are entitled to 1-2 weeks of paid paternity leave after the baby arrives. This might also include time off to join their partner for antenatal appointments.
Some employees will always be motivated by the promise of more money. No one will ever complain about a one-off cash bonus to boost company morale or performance-based bonuses for a job well done.
8. Car allowance
Car allowance benefits add a cash allowance to your employee's base salary. This enables them to buy or lease a car to use for their commute to work.
Health and wellness types of employee benefits
Money isn't the only thing to consider with an employee benefits package. What about considering other employee perks to help your employees look and feel their best?
1. Gym memberships
You could provide a free gym membership as part of your employee benefits package, or you could arrange for a discount or reimbursement. Bonus points if you install an in-office workout room for your employees to use!
2. Dental and optical insurance
Don't end those private healthcare options at basic medical insurance. Include dental and optical coverage for your employees to ensure their needs are met.
3. Extended paternity leave
One or two weeks of paternity leave may not be enough incentive. Extended or shared paternity leave allows greater flexibility for new parents, perhaps allowing the father more time to stay home with the baby while the mother returns to work.
4. Private health insurance
Private healthcare benefits can help your employees return to work more quickly after an illness. This reduces absence costs, increases worker loyalty, and earns your business a reputation for caring.
5. Sick pay
Prolonged stress can wreck productivity and lead to physical and emotional health problems. How can you help your employees feel more secure with their financial situation?
A comprehensive sick pay policy that with increased statutory sick pay benefits reassures them that they can continue drawing wages if they fall ill.
6. Flexible working
21% of UK workers between 25 and 34 are dissatisfied with their work-life balance. Offering flexible working hours or "flexi-time" is one of the most competitive employee benefits you can offer.
Millennials especially love this benefit. But it's also attractive for parents or others who may wish to work at home or work outside the typical "9-to-5" workday hours.
7. Duvet days
Duvet days or "personal" days give employees the option to stay home from work for any reason with no prior notice. This is categorised as separate from sick days or annual leave.
Additional employee benefits ideas
Still keen on employee benefits ideas? Here are a few more fun incentives your employees will love.
1. Meal vouchers
Some people are motivated by money, while others will happily work for food. Can you provide meal vouchers or discounts to a local favourite restaurant or coffee shop? If not, take a look at our expense management software.
2. Childcare vouchers
You can give your employees up to £55 of childcare vouchers or employer-contracted childcare per week, tax and NI free. Parents will love you for it!
3. Continuing professional development
As stated earlier, opportunities for continuing professional development is #1 on the list of many job seekers. Give them what they want by arranging for ongoing training or tuition reimbursement if they enroll in a local college or university.
4. Days off on birthday
Come on—who wants to work on their birthday? This should be a built-in perk in every employee benefits package.
5. Company car
If it's within your budget to do so, offering your employees a company car is a fantastic employee perk. It gives them one less thing to worry about during the workday.
6. Days off on Birthday
Come on—who wants to work on their birthday? This should be a built-in perk in every employee benefits package.