Employee benefits aren’t just for your workforce. Provide them well and the business will benefit too from a rise in productivity and staff retention. Debbie Lovewell discovers a host of schemes you need to know about
Simply offering a top-notch salary to attract and retain staff is no longer enough. The employee benefits industry is growing rapidly and, with it, so are employees’ expectations. A good benefits package is now a sign of status in a business like yours and is the key to motivating a top-performing workforce. Read on to find out what the most effective schemes available to you are:
While you cannot prevent employees from becoming ill, healthcare benefits can help them return to work more quickly, reducing absence costs and boosting productivity. These benefits are a valuable recruitment and retention tool, which will increase staff loyalty and earn your business a caring reputation.
PRIVATE MEDICAL INSURANCE (PMI):
• Helps with the costs of private treatment and enables staff to jump hospital waiting lists.
• Most policies do not cover HIV/AIDS and pre-existing medical conditions.
• PMI is also perceived to be the most expensive healthcare benefit. Tobin Coles, sales director of Jelf CorporateHealthcare, estimates that businesses like yours can expect to pay about £700 per person per year.
INCOME PROTECTION (IP):
• Pays an ongoing monthly income to employees that become physically unable to work.
• You should expect to pay somewhere between 1.25% and 1.5% of payroll.
• If an employee uses IP, the cost will rise because you are legally obliged to continue paying for all their benefits plus National Insurance (NI) and any pension contributions.
CRITICAL ILLNESS COVER:
• Pays employees a single tax-free lump sum should they suffer permanent disability or a serious illness.
• Most schemes cover a core list of approved conditions, which can be extended for a further charge.
• Premiums are based on age, gender, health, family history and occupation.
• Once the payment has been made employees are removed from the payroll, making them less of a long-term liability.
HEALTHCARE CASH PLAN:
• Provides tax-free contributions towards the cost of everyday treatments such as prescriptions, dental and sight tests.
• Prices start from £1 per person per week, which is often passed on to employees.
• Only helps to fund, not provide, treatment.
Businesses that offer a good pension scheme also score highly in the recruitment and retention stake. Understanding pensions can be tricky but advice is available from pension consultants and bodies such as the Occupational Pensions Regulatory Authority (OPRA) or the Pensions Management Institute. There are four main types of scheme.
FINAL SALARY SCHEMES:
• Pay employees a pension based on a percentage of their final salary. This is calculated using their basic salary (excluding commission, bonuses or benefits) and depends on their length of service.
• The most attractive type of scheme to employees, but few businesses are now establishing fresh plans.
• Your business takes the financial risk and you will need to provide additional funding if a deficit occurs.