With the average cost of replacing an employee now over £26,000, investing in employee wellbeing isn’t just the right thing to do – it makes financial sense.
One of the most tangible ways for employers to show staff they value and care for them is to provide a benefits package which can consist of everything from financial benefits, such as Income Protection, to ‘softer’ perks such as flexible working or gym membership.
However, doing this isn’t always straightforward, especially when taking into account the UK’s diverse – and ever-changing – workforce. So what do SMEs need to bear in mind when developing a comprehensive employee benefits package?
Account for the increasingly diverse workforce
First and foremost, the benefits your business offers should reflect the makeup of the workforce – and it’s important you keep pace with how this might change.
Two thirds of employers haven’t reviewed their benefits package in three years or more , yet demographic, economic and social changes mean that employee needs and priorities have evolved significantly over that time. For example, the abolition of the Default Retirement Age, combined with factors such as improved healthcare and greater life expectancy, means that there are now more people aged over 50 in employment than ever before.
A ‘one size fits all’ approach doesn’t work
It is important, therefore, to evaluate what benefits older workers might value the most. Our research shows that, unsurprisingly, support in ill health becomes increasingly valuable to us as we get older and, what’s more, has a real influence on our decision to join or to stay with a company. There are a number of options employers should consider to provide older employees with this support.
Elective health insurance, for instance, can help staff cover the cost of medical treatment, while early intervention measures such as Employee Assistance Programmes can help both employees and employers spot potential problems early in order to lower the likelihood of long term absence from work.
At the other end of the scale, younger workers are typically more interested in benefits such as gym membership or cycle to work schemes. Flexible working opportunities are also seeing increased take-up among younger employees, particularly with new parents seeking a degree of flexibility as they return to work following maternity or paternity leave, or who need to balance work with childcare arrangements.
Financial security is valued at any age
Although the task of meeting such a broad spectrum of requests and requirements may seem overwhelming, what’s key is to make sure you review your offering regularly in order to adapt to evolving needs.
Don’t forget that there are also a number of core benefits which are important to employees at any age – benefits which offer financial security being a good example. For instance, Income Protection – depending on the terms and conditions of the policy – provides a back-up plan for the 1 in 10 employees who will go on long term sick leave during their working lives. It is also one of the few benefits to provide a payback for the employer if they need to claim (by not having to pay Occupational Sick Pay and through other indirect cost savings). Another protection product which can be beneficial for SMEs – employers and employees alike – is Sick Pay Insurance, which provides employees with a regular income if they are off sick for up to twelve months. With Sick Pay Insurance, benefits can kick in after as little as one week’s absence, while insurer validation can help employers manage absence consistently across the workforce. This makes it a worthwhile consideration for small businesses, particularly those who may not have a formal HR department in place to handle this process.
Communication is key
Finally, it’s not uncommon for employees to be completely in the dark as to what benefits they are entitled to. In fact, our research has shown that two thirds of SMEs that have invested in employee benefits have then failed to communicate what’s on offer to staff . In short, this is money down the drain; a failure to communicate benefits packages is costing UK companies a massive £2.7bn every year through increased staff turnover and sickness absence.
To counteract this, it’s essential that all staff are made familiar with the benefits the organisation has invested in. For smaller companies, who may not necessarily have a separate HR division, this task often falls to line managers, who need to receive the appropriate training to ensure they can clearly communicate exactly what is available, and to whom. This isn’t just a one-off job. Benefit entitlement can quickly change due to updates to legislation or employment policies, or as an employee’s role changes. Benefits also become more important at certain times in an individual’s life as their personal circumstances change, so training should be carried out on a regular basis to make sure everyone is kept up-to-speed.
As for when benefits should be communicated, it’s a good idea for a run-through to form part of the induction process for new joiners. This provides a great opportunity to show new employees the amount of support on offer and to promote the company’s wellbeing strategy. Again, though, it shouldn’t be a case of ticking the box and forgetting about it; make sure all benefits and perks are clearly written up and available to all employees to access when they need to – perhaps through the company intranet or in the employee handbook. Remember to take the time to speak to staff six or twelve months down the line to see if the benefits described to them on their first day are still suitable for their needs, and see if they have any questions around their entitlement. As your workforce grows and evolves, these regular touch points ensure your current offering reflects what’s most important to employees.
As the war for talent ramps up, the pressure is on SMEs to retain experienced staff and attract fresh talent. A robust approach to benefits, which can be evolved as needs and requirements change, is a proven, tangible way to attract and retain the very best people – while fostering a workplace which, at its heart, is a healthy and happy one.
By Peter O’Donnell, CEO of Unum