I’m a small business owner looking at building a good employee benefits package for my employees but I don’t have a lot of money to spend.
What should I focus on, and do added benefits really make a difference for attracting talent?
A good employee benefit package can help SMEs attract and retain top talent
Myron Jobson of This is Money says: Nowadays, getting top talent on your team sheet is no longer a case of simply offering a hefty pay packet.
People want more. Perks such as a dental plan, flexible working times and a bumper holiday allowance can coax skilled workers to turn their backs on big corporates and help you to scale your modest enterprise.
Offering a good benefits package to employees, no matter the size of your business, can also help with employee retention.
However, good benefits packages don’t come cheap, so it is important to establish the right amount and mix of perks for your business without breaking the bank.
To help you on your way, we’ve asked two experts in the field to offer guidance on how to find right blend for your business.
Vanda Cox, executive director of EQ Workplace, replies: An attractive employee benefits package can be an excellent way to retain employees, contribute towards improving staff well-being and enhance engagement.
Phase in new benefits over a period of time to coincide with revenue, profit and growth targets
Getting the formula for your scheme right for your staff demographic is critical if you want to attract new talent and compete in your sector.
If the target talent is likely to be recruited from larger, established competitors with comprehensive, generous benefits packages that can’t replicated on a small budget then being honest about the inability to compete is the best policy.
Instead, highlight the lively, fast-paced culture and friendly, open working environment and social aspects, assuming these exist.
Have a clear employee benefits plan and phase in new benefits over a period of time to coincide with revenue, profit and growth targets.
This shows that you want to provide benefits but also underlines the need to achieve business targets and helps people to focus and pull together to achieve them, which contributes to the culture.
Now that legislation requires all employers to provide a workplace pension and auto enrol staff, and with statutory minimum contributions increasing in future, embracing a save for tomorrow culture might make sense.
Exchanging part of salary or bonus for a higher pension contribution is more tax efficient for the company as no national insurance contributions are payable on pension payments and employees also get tax relief on personal contributions.
Employees without dependants are likely to value perks such as gym membership subsidy, more than traditional benefits such as group life assurance
Younger, junior staff are likely to value training and mentoring and potential career progression. If these things are feasible, advertise them and follow through on promises.
Employees without dependants are likely to value perks such as gym membership subsidy, cash plans and workplace discounts more than traditional benefits such as group life assurance, group income protection and private medical cover.
If target recruits are likely to be more experienced and older, then life cover and annual health screenings are likely to be highly valued.
Employee surveys often show that flexibility around working hours and place of work are highly prized. Allow staff to take occasional or regular long lunches to enable them to take an exercise class or to arrive late or go home early from time to time or regularly.
The hours worked each week or month can be set, and flexibility provided within clear parameters – for example eight hours a day between 7.30am and 7.30pm or five days a week Monday to Saturday inclusive.
Depending on the business type and team tolerance levels, you can even let staff work out between themselves who will provide cover and when – empowering them and drawing them together as a team.
If target recruits are likely to be more experienced and older, then life cover and annual health screenings are likely to be highly valued
Peter Lawrence, director at business consultancy Human Capital Department, adds: Employees working for larger corporates typically have access to a generous employees benefit package on top of a decent salary.
This usually comes in the form of good pension contributions, sick pay, car or travel allowance, a bonus scheme, gym membership, flexible working and holiday entitlement.
These benefits can be difficult for small and medium sized enterprises to match as resources are more constrained.
However smaller firms can score over the big employers as they offer things that are sometimes missing in big corporates, such as interest in the work itself, praise and recognition for a job well done and a feeling of belonging.
This is what experts call ‘intrinsic rewards’ and sometimes owners and managers need to be reminded of the importance of these positive employment practices which can be forgotten in the maelstrom which is business.
Adopting flexible benefits is also something that can work in the favour of small businesses.
This is a relatively recent innovation. The idea is that employees have different needs and priorities. For example, one person might value gym membership while someone else would prefer a travel allowance.
Flexible benefits allow workers to pick and mix their benefits package up to a certain monetary value. All employees get the same money value but have an individually tailored package.
For key employees SMEs could consider some form of share ownership, as an alternative to a cash bonus, which could be part of a succession plan.
Small Business Essentials