Are you a small business owner in the UK looking to attract and retain top talent? Are you struggling to find the right employee benefits to keep your employees engaged and satisfied? Look no further! In this comprehensive guide, we will explore the importance of effective employee benefits. We’ll provide you with practical insights and strategies to design a benefits scheme that boosts staff retention and satisfaction.
Why Employee Benefits Matter for Small Business
Employee benefits for small businesses are more than just salaries. They represent the support and value that employers provide to their workforce beyond their monthly wages. In today’s rapidly changing professional landscape, where job changes are becoming increasingly common, attracting and retaining high-quality talent has become vital for the success of small businesses.
According to recent surveys, one-third of UK employees are contemplating job changes, while two-thirds of SMEs are struggling to fill their job vacancies. This makes it crucial for small businesses to have an effective small business employee benefits scheme in place to ensure they can offer competitive benefits for small businesses.
Employees now prioritise financial wellness, work-life balance, and health benefits in their employee benefits package. With rising living costs and the growing remote work trend, traditional benefits may no longer be enough to keep employees engaged and satisfied. Designing an effective benefits strategy that meets legal requirements and aligns with cultural expectations is key to attracting, retaining, and motivating your workforce, ensuring they achieve work-life balance and financial wellness.
Key Insights for Designing Effective Employee Benefits
To design an effective small business employee benefits package, it’s important to understand legal requirements, identify objectives, research market trends, and tailor benefits to your employees’ needs. This approach to employee benefits small business strategy ensures that the benefits are well-suited to your team.
Let’s dive deeper into each of these key insights:
1. Understand Legal Requirements
Compliance with legal requirements related to employee benefits is mandatory for all businesses in the UK, ensuring that companies meet the necessary compliance standards.
This includes statutory rights such as National Insurance, Sick Pay, and Parental Leave. While these are essential, they can also be enhanced to provide more attractive benefits to your employees, thus fulfilling the legal requirements while offering additional value.
Consider going above and beyond the minimum legal requirements to stand out as an employer of choice in the competitive recruitment market. This is especially important for small businesses to consider when striving to attract and retain top talent.
2. Popular Employee Benefits for Small Businesses
To effectively design employee benefits for small businesses, it’s crucial to understand what benefits are most valued by employees. According to surveys, some of the most popular benefits among UK employees include employee preferences for comprehensive health coverage, flexible working hours, and additional wellness programs.
Private Medical Insurance (PMI):
Many small companies expect PMI to be out of their employee benefits budget. Yet it is a highly valued benefit where 88% of surveyed SME business employees in 2023 said they’d love to have private medical insurance as part of their small business employee benefits packages. Providing access to private healthcare can greatly enhance the well-being of your employees and their families.
Health Cash Plans and Employee Assistance Programs (EAP):
If your budget doesn’t quite stretch to private medical insurance for your team, you should consider a different, more cost-effective option called a Health Cash Plan.
Your employees can claim back for eye tests, dental check-ups, physio, private GP, consultant fees, MRIs, and so much more through a health cash plan. Your company’s investment it priced from about £8 per employee per month plus an extra £1 per employee per month for the EAP.
For health cash plans, speak with the team at Excellect and tell them the team at YPP sent you. They’re our Go-To employee benefits company, and we trust them with all things Employee Benefits. Excellent will be able to guide you through an independent small business employee benefit packages search of the entire market.
Offer Flexible Hours:
Work-life balance has become a top priority for many employees. Sometimes, many prefer a flexi time and a mature, flexible approach to their hours to a higher salary. Offering flexible working hours can help your employees achieve a better balance between their personal and professional lives.
Promote Learning and Development:
Investing in the professional growth and upskilling of your employees is highly valuable. Providing opportunities for training and development can boost employee satisfaction and loyalty.
Wellness Packages:
Promoting employee wellness through wellness packages, such as gym memberships or mental health support programs, can significantly improve productivity and overall job satisfaction.
We partner With Juno, which offers a simple way for small business owners to offer flexible well-being benefits. Our team are given points each month, and they decide what to spend them on. One treated themselves to a new Apple watch, another saved their points and bought their return flights to Dubai, whilst another had a subscription for their omega-3 supplements set up with one of the wellbeing providers partnered with Juno.
Companies like Spill offer mental health support via their chat function and phone or video counselling sessions as needed.
Employee Discount Platforms:
Employee discounts help in this time of increased cost of living. If you invest in the Health Cash Plan with many of the UK’s leading companies, such as Health Shield or Westfield, your employees will have access to Perks, which include discounts on many day-to-day costs, including Sainsbury’s, John Lewis, as well as technology from Apple or holidays with Expedia. I saved £200 per person on a 5-night trip to New York using our employee discounts.
Enhanced Sick Pay:
Often, smaller companies struggle more than larger organisations when a team member is off sick. The NHS offer their staff up to sick months full-pay and then a further three months at half-pay. Clearly a company with 18 members of staff would struggle to match this. However, this doesn’t mean you cannot consider an enhanced sick pay benefit.
Employee benefits that include enhanced sick pay, even if it is for five or ten days per year, will go a long way towards reducing the stress of your employees when they’re too unwell to work. Without enhanced sick pay as part of your employee benefits, even as a small business, consider the impact on people continuing to work whilst unwell.
This will ultimately cost you money as this affects their efficiency, delivery, and ability to do their role as well as their mental and physical health and your other employees’ mental and physical health. Presenteeism is a very real issue in companies that don’t enhance their employee benefits with enhanced sick pay.
You can also increase enhanced sick day allowances with tenure, so perhaps in the first year, you offer statutory sick pay. Once they’ve been with you for a year or more, increase the allowance and ensure they have five days minimum of enhanced sick pay.
Group Health Insurance, Income Protection, Group Life Insurance and Critical Illness Insurance:
Group Health Insurance, Income Protection, Group Life Insurance and Critical Illness Insurance, as well as dental insurance, enhanced paternity leave, enhanced workplace pensions, and other types of perks, are all easily accessible employee benefits for small companies.
If you cannot afford many of these employee benefits as part of your team’s benefits packages, consider which ones really make a true difference to them and you as a company.
Workplace Pension:
For some, they don’t think about pensions (until it’s too late!) However, many employees in small businesses understand and appreciate their employer may not be able to offer competitive workplace pensions like those in the corporate world. Strides have been made in the UK, ensuring all employers automatically enrol their team into workplace pension schemes as part of their employee benefits packages. The employee has the right to opt out of the workplace pension plan.
3. Identify Your Employee Benefits Objectives
Before designing your employee benefits for small businesses, it’s crucial to define the goals you aim to achieve, such as attracting new talent, retaining current employees, enhancing satisfaction, supporting work-life balance, or ensuring they reflect your company values. Clearly articulating your objectives will guide you in making informed decisions and prioritizing the benefits that will most positively impact your workforce.
4. Research Employee Benefits Market Trends
To stay competitive in attracting and retaining talent, it’s essential to stay informed about industry standards and competitor offerings. Conduct research and read industry reports, of course. Plus, you can consult with recruitment and HR professionals specialising in small business recruitment to stay abreast of market trends. This will help you understand the employee benefits package your employees may expect and provide you with valuable information to shape your own strategy.
As part iof your hiring process, do ask candidates what their employee benefits packages are made up of and what is important to them. Bear in mind that employee benefits can be very subjective. Where it may be important to one candidate to have dental insurance, others may list paternity leave, enhanced sick pay and income protection.
5. Understand Your Employee’s Needs
One size does not fit all when it comes to employee benefit packages. Each employee has different needs and preferences. To design an effective benefits scheme, it’s important to understand your employees’ needs and tailor benefits accordingly. You can gather employee feedback through tools like SurveyMonkey or Google Forms to ensure anonymity and encourage honest responses. By actively listening to your employees’ feedback, you can create a benefits package that truly resonates with them.
6. Use HR Technology
Leveraging hiring technology can streamline the process of designing and managing employee benefits. Consider using software and platforms that allow employees to choose their own benefits from a flexible scheme. This empowers employees to select the benefits that best suit their individual needs, increasing their satisfaction and engagement. Hiring technology can also help you track and manage employee benefits, making the process more efficient for employers and employees.
We’ve used CharlieHR for many years, and they provide a cost-effective plan for small businesses of 5 employees. They offer a Perks at Work portal where our team can access discounts to everyday things like trips to the movies, holiday discounts and supermarket savings. We are a referral partner for CharlieHR so let them know we sent you!
7. Communicate Your Employee Benefits
Once you have designed your employee benefits package, it’s crucial to communicate benefits to your team effectively.
Use clear and consistent messaging, supported by visual aids such as infographics or videos, to ensure employees understand the value of their employee benefits package.
Encourage two-way communication, allowing employees to ask questions and provide feedback.
Leadership can play a key role in promoting employee benefits and perks, showcasing their own engagement with the work benefits scheme.
8. Budgeting for Employee Benefits and Perks
While designing your employee benefits scheme, it’s important to ensure financial sustainability. Small businesses may face budget constraints, so it’s essential to seek cost-effective options and negotiate favourable rates with benefit providers. Conduct a thorough cost analysis to determine the financial impact of each benefit and make informed decisions about what fits within your budget. Regularly review and adjust your benefits strategy to align with changing needs and trends.
The Benefits of an Effective Employee Benefits Strategy
Designing an effective employee benefits strategy can lead to several positive outcomes for your small business, setting the stage for business success. By offering attractive benefits, you can:
Attract and retain top talent:
A competitive benefits package can make your small business stand out in the job market, attracting high-quality candidates and reducing employee turnover.
Enhance employee satisfaction and loyalty:
When employees feel valued and supported through meaningful employee benefits, their job satisfaction and loyalty to the company increase. This leads to higher productivity and overall business success, guaranteed.
Support work-life balance:
Providing benefits that promote work-life balance, such as flexi time / flexible hours or remote working options, can help your employees achieve a better balance between their personal and professional lives. Work from home support can certainly be part of your employee benefits package if your manager knows how to manage remote working easily. If they don’t, this is not a benefit and could hinder team cohesin, happiness and employee loyalty.
Improve employee well-being:
Offering benefits like private health insurance or wellness packages can greatly improve the physical and mental well-being of your employees, leading to healthier and happier individuals.
Align with company values:
A well-designed employee benefits strategy can align with your company’s values and culture, reinforcing your employer brand and attracting candidates who share your vision and mission.
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Conclusion
In today’s competitive job market, designing an effective employee benefits package is crucial for small businesses in the UK. An innovative and thorough employee benefits package does not need to cost loads. Plus, the right employee benefits package will enhance employee loyalty. By understanding legal requirements, identifying objectives, researching market trends, and tailoring benefits to meet your employees’ needs, you can create a staff benefits scheme that not only attracts and retains top talent but also enhances employee satisfaction and contributes to overall business success. Benefits for small businesses are possible. You just need to know where to seek the right suggestions and solutions.
Regularly review and adjust your employee benefits strategy to align with changing needs and trends, and collaborate with small business recruitment professionals, like Your People Partners, to ensure you’re developing a comprehensive approach that meets the unique employee benefits needs of your small business.
Your People Partners is your trusted partner in helping small businesses hire and retain top talent. With our YPP trademarked process, we have supported over 200+ scaling companies and business owners since 2014. Our comprehensive approach includes building your Employer Value Proposition (EVP) and Employer brand, ensuring you attract the right candidates and create a positive employee experience. Don’t just take our word for it – check out our client reviews and book a time to learn more about how our team can support your growth. Hire, Nurture, and Grow with Your People Partners.
