Do workers value employee benefits?
CIPD's Good Work Survey 2023asked employees whether they were considering leaving their jobs in the next 12 months and, if so, why. Of the 18% considering a move, 34% were doing so to get better benefits elsewhere. This outweighed other reasons, such as increased job satisfaction, more opportunities for promotion and professional development, and the desire to do a different type of work.
Employee benefits play a crucial role in attracting and retaining staff. However, offering the right employee benefits is essential. In addition to creating a high-quality employee benefits package, it's worth considering the impact your working environment and company culture have on staff. In the CIPD survey, many respondents mentioned issues in their relationships with senior managers as a potential reason for changing jobs.
What advantages does a high-quality benefits package offer employers?
A good-quality employee benefits package supports employees and businesses. As we've mentioned, employees considering a job change often do so to seek better benefits elsewhere. Highly valued employee benefits can reduce staff turnover and increase employee retention. This has a positive impact on employee engagement and morale, which typically results in increased productivity.
Happy employees can also act as ambassadors, helping your company attract top talent. Sharing details of your benefits packages can help you stand out from the crowd when you advertise current vacancies.
Which benefits do employees value most?
If you're reviewing your current offering or considering introducing a new employee benefit, it's worth asking your team which key benefits they value most. Ensuring you include the most important benefits increases the benefits for you and your employees.
HR and payroll software providerCiphrsurveyed 1,000 UK employees to discover which benefits employees valued most. Their research includes 25 benefits, but we're focusing on the top benefits employees mentioned in their responses.
According to the survey, employees value the following benefits the most:
Paid sick leave
Sick pay was the most valued benefit in Ciphr's survey. Serious illness can cause lengthy absences, which quickly impact an employee's financial security. Including generous paid sick leave in your employee benefits package gives your staff peace of mind. However, hiring temporary staff or placing an extra burden on your existing team can significantly impact your business.
Thankfully, there is a cost-effective solution.
Income protection insurance
Group income protection insurance pays a regular income to employees during sickness absences. You pay a premium, which is typically cheaper than paying the employee's wages, and the policy pays a fixed percentage of their salary until they return to work.
It's also worth considering adding critical illness cover to your benefits package. This pays a lump sum to employees diagnosed with a serious illness listed in the policy. It can help to fund home adaptations in the event of an ongoing disability. Some providers will add employees' children to the policy at no extra charge, benefiting parents who need time off to care for a sick child.
Flexible working
Flexible working can help your staff improve their work-life balance.
Flexible hours
Flexible hours let employees structure their work around their other commitments. It can enable parents to do the school run or support employees caring for elderly relatives. Flexible hours also allow staff to start or finish work earlier or later to manage their mental health or avoid commuting on a packed train or in heavy traffic.
Flexible work location
Advances in technology have made working from home easier, and many employees have discovered the advantages of remote working, such as increased flexibility to manage their other commitments or the lack of a daily commute. However, remote workers are at risk of increased isolation, so you should consider a combination of home and office-based working.
Pension contribution matching
A company pension scheme is now mandatory for UK employers. However, the contributions you make to your employees' pension fund can help you stand out as an employer of choice. Employees value pension contribution matching, where employers offer to match the amount an employee pays up to a specified percentage.
It demonstrates your commitment to looking after your staff, even when they're no longer an employee.
Health insurance
You can offer employee health benefits in two ways. Group health insurance lets your employees access private healthcare quickly without spending time on anNHS waiting list. You can tailor your private medical insurance to provide access to various treatments and choose the financial limits that will apply to your policy. You pay a single premium to cover all staff. Business health insurance typically also offers other benefits, such as support in developing workplace well-being initiatives or a workplace vaccination program.
Private medical insurance premiums are an allowable expense for corporation tax purposes, so help reduce your tax bill. However, HMRC treats it as a benefit-in-kind, meaning employees must pay income tax on the benefit.
If health insurance premiums are beyond your current budget, health cash plans offer a cost-effective alternative. Employees can claim cashback on routine medical expenses such as dental check-ups, eye tests and private physiotherapy, helping employees save money.
You can learn more about the pros and cons of eachhere.
Mental health and well-being support
There's growing awareness of the importance of supporting good mental health in the workplace, and employees increasingly value employers who provide tangible support.
If you decide to invest in health insurance, basic policies typically include 8-10 counselling sessions. However, if you upgrade your policy to extend the mental healthcare on offer, your employees can benefit from more therapy sessions and a broader range of treatments. Most health insurance policies also include 24/7 online GP appointments, telephone helplines and self-help resources, enabling employees to seek help at a time that suits them.
Business medical insurance typically also offers the option to add an employee assistance program, which offers confidential, third-party support for various issues, including mental health problems and legal and financial concerns.
Financial compensation
A good-quality financial compensation package should include a competitive salary. However, that's only part of the picture. In Ciphr's survey, a market-value salary was ranked at number 10, but a performance bonus appeared at number 5. This suggests that employees value recognition for a job well done over simple financial compensation.
You can award bonuses in various ways. An annual cash bonus based on performance could be a fixed sum or a percentage of each employee's salary. You could also offer a profit-share bonus or a specific amount as a reward for completing a project. Equally, a Christmas bonus can be a welcome addition to an employee's pay packet, giving them more money to spend on gifts or other festive treats.
Holiday allowance
Holidays give your staff valuable time to spend with their loved ones and relax. Time away from the office lets your employees unwind and reduces the risk of burnout and other health issues. As we've mentioned, a good work-life balance is an essential benefit for many employees, and annual leave can contribute to this.
Employees in the UK are entitled to28 daysof paid leave per year, so you could offer a higher allowance to every employee. Increasing employees' annual leave allowance based on their length of service can improve employee retention.
Alternatively, you can offer unlimited leave. This approach demonstrates a high level of trust in your staff's ability to take appropriate leave and requires careful management to meet business needs. Some employers find that an unlimited leave policy creates uncertainty and reduces the amount of annual leave employees take, which can negatively impact their health and well-being.
Some employees surveyed said they'd appreciate a day off on their birthday so they don't have to spend it in the office.
Employee discount scheme
Employee discounts help your staff save money, which is particularly valuable during a cost of living crisis. Many discounts reduce the cost of treats, letting your staff enjoy a night out at the cinema or lower the price of their summer holiday.
Some perks include health and well-being benefits, such as discounted gym memberships, health checks, and spa days.
Most health insurance providers offer membership benefits, meaning you can provide employee perks as part of the package with private medical insurance. Alternatively, there are standalone packages providing various perks and discounts.
Death in service benefits
Death benefits show your employees that you're willing to invest in their family's future should the worst happen.
A group life insurance policy can cover your entire workforce and pays a lump sum to an employee's loved ones if they pass away during their employment with you. Their death doesn't have to be work-related; they just need to be a current employee. Group life insurance is a fixed-term policy that ends on an employee's anticipated retirement date, meaning it's worth speaking with them about their retirement plans to ensure adequate coverage. The lump sum is typically between two and four times an employee's current salary, and you can set the multiple to suit your budget.
Relevant life cover is a potential alternative for high-earning staff as it doesn't count towards the pension lifetime allowance, which can help to cut their tax bill. Although the pension lifetime allowance was recently abolished, relevant life cover is still worth havingin some circ*mstances.
Support for parents
Balancing work and family life can be challenging, and employers offering support to parents can bring employees back into the workforce. In 2023,27.6% of womendidn't work due to family commitments. While some may have other caring responsibilities, many of these are likely parents.Some parentsalso take lower-paid roles or jobs that don't fully utilise their skills to improve their work-life balance.
Flexible working can help parents manage their time but parental leave and help with childcare costs are also valued benefits. TheWorkplace Nursery Benefitlets employers partner with a nursery and pay a monthly fee, and then employees pay for their nursery place via salary sacrifice. Employees pay less income tax and National Insurance and employers also pay less NI.
Extended paid parental leave following the birth of a child gives new parents time to adjust and eases the pressure to return to work for financial reasons.
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At Globacare, we help our clients find the right insurance policies to offer their employees benefits they'll value.
