EMPLOYEES WITH BENEFITS THE CHANGING FACE OF THE COMPANY ‘PERK’
The link between wellbeing and productivity in the workplace has long been understood by many businesses, but the increased focus on issues such as absenteeism and press attention around the pension gap has highlighted the need for all organisations to take a serious look at the Employee Benefits that they offer. A dviser spoke to James Bolton , Scrutton Bland’s newest Partner, whose remit it is to create and develop Employee Benefit schemes for corporate clients, about the changing attitudes of employers regarding the importance of employee engagement. Q. Some of us are old enough to remember the introduction of the Luncheon Voucher, is this kind of thing that is meant by Employee Benefits (EB)? A. Essentially yes, the Luncheon Voucher was developed as a ‘perk’ encouraging employees to stay with a company and was often tax efficient. In fact they are still around today!. However, the industry has moved on a long way since then and today’s employee benefits are much more about combining an employer’s responsibility to meet its duty of care for staff with rewards and benefits which attract, motivate and retain them.
Q. Why would an employer need employee benefits and rewards? Surely a pension scheme is enough? A. Pension schemes can be a valuable part of an employee benefit package but should be reviewed periodically to ask whether they are understood by the members; if the funds performing well and appropriate, and finally, whether charges are competitive and the member options and administration working efficiently. There are also many other benefits and rewards which can be considered and which employees value such as healthcare, protection and wellbeing benefits which can include things like health cash plans, life assurance and critical illness cover or even discounts for gym membership and discount shopping vouchers. A. Staff bonuses can be a useful way of rewarding staff, however they can become pretty expensive as bonuses are taxed and liable for national Insurance (nI). I believe that a ‘real’ benefit for employees must add value in some significant way. This could be a tax/nI benefit such as pension, group life or cycle schemes which are not taxed on the employee. It may be that the premiums/ costs of a benefit are significantly discounted versus the cost of the member providing it themselves such as Medical Insurance or Income Protection. Or it might be that the benefit programme provides an immediate gain such as discount vouchers, dental cover and gym membership. Q. Wouldn’t it be easier just to give staff a bonus?
Q. The term ‘financial education’ often comes up in conversations about Employee Benefits, what does it actually mean? A. This can encompass many aspects but essentially it’s helping your employees understand their wider finances, benefits and options. It can include help answer questions such as: When can I afford to retire? What investment options might be right for me? What difference would it make if I pay more into my pension? What happens to my fund and other assets if I die? What retirement options do I have and what is right for me? This education can take the form of presentations, online calculators and one- to- one advice surgeries. Q. People are used to making choices about their lifestyle decisions How are employee benefits providers keeping up with this? A. There have been a lot of changes in Employee Benefit offerings in recent years. It is essential to make sure that the benefits remain competitive and the fees and premiums are appropriate. Personal delivery and service is more important than ever. Members are also demanding more choice to get the benefits which they want. What is suitable for Millennials may not be appropriate for Generation x or wanted by those approaching retirement. ‘Flex’ benefit schemes can meet this demand and be managed and administered via online systems. These have improved significantly in recent years and the costs of implementing and running them have fallen.
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