Employee retention poses a complex challenge that goes beyond merely offering a competitive salary. The prominence of employee perks is on the rise, and as such, workers’ expectations are also climbing.
In today’s business environment, a comprehensive and attractive suite of employee incentives can serve as a hallmark of a company’s prestige and plays a crucial role in fostering a productive, satisfied workforce.
This article will delve into the most sought-after employee perks that today’s workforce is demanding, and the potential costs associated with them.
1. Private Healthcare
Given the increasing strain on the NHS, offering private health insurance to employees is bound to win favour. With a private healthcare plan, employees have access to top-tier healthcare services for a wide variety of conditions, including mental health and physical illnesses. Furthermore, it also means shorter wait times for treatment and more convenient availability.
Group health insurance packages typically range between £250 and £1,000 per employee per annum. The cost of premiums will be influenced by factors such as:
- the group size
- average age
- coverage included
2. Flexible Work Arrangements
A healthy work-life balance is crucial for both employers and employees. A shift from the traditional 9-to-5 work routine to a more flexible work model enhances employee morale and productivity. Some people may even accept a lower-paying job in exchange for more freedom.
The cost for employers to enable remote work is usually a provision of up to £30 per employee. This may seem minor, as recent statistics show that flexible and remote work can save up to £10,000 per employee.
Implementing flexible work practices offers several benefits, from boosting productivity to giving you a competitive edge in hiring.
3. Workplace Pension
A substantial pension plan with generous employer contributions represents one of the most valuable employee perks, ensuring a secure future in an employee’s retirement years.
Workplace pensions are a statutory requirement in the UK, as employers are mandated to provide a certain level of pension coverage to their employees via auto-enrolment. Despite this, pensions are viewed as a crucial perk in the UK, with many companies contributing significantly more than the statutory minimum.
The minimum total contribution for most people under automatic enrolment is 8% of qualifying earnings, with employers required to contribute at least 3% in most cases. The remaining amount is covered by employees from their post-tax salary. Some companies offer contribution matching, where they match the employee’s contribution up to a certain limit.
Selecting the best pension provider is essential to maximise the benefits for employees. Choosing the right workplace pension provider can also offer a tax benefit via salary sacrifice – reducing the company’s National Insurance contributions and enabling your employees to retain more of their earnings.
Penfold’s workplace pension is a cutting-edge, award-winning auto-enrolment scheme designed to simplify your company’s pension management. To learn more about how Penfold can help in providing an improved pension that your team will enjoy, contact us today.
4. Vacation Allowance
Any employee working a five-day week is legally entitled to a minimum of 28 days of paid annual leave each year, equating to 5.6 weeks of holiday (statutory leave entitlement or annual leave).
To calculate the average hourly rate, you just add up the hours worked by the employee and the payment related to those hours.
Nevertheless, UK companies often grant their employees more than the statutory minimum holiday and provide the option to ‘buy’ extra days through their flexible perks scheme. This is not only an effective measure to prevent burnout but also a unique way to differentiate your company from your competitors.
5. Sick Leave
By law, companies are required to provide a minimum level of Statutory Sick Pay. Yet, many employers voluntarily enhance this minimum benefit by adding contractual sick pay perks.
One common practice is to offer sick pay (for example, two to four weeks) at full salary, followed by lower payments. Some sectors are very generous, while others do not offer any additional sick pay.
According to Today CEO, the average cost of sickness absence was 2.2% for companies with 25-49 employees in 2016. This amounts to a loss of 2.2% of all working hours each year.
Given that there are 1,740 working hours in a standard year, excluding holidays, this 2.2% rate represents a loss of 38.28 hours per employee. Based on the average hourly rate of £14.38, these sick days would cost a company with 49 employees a total of £26,972 — almost the entire annual income of the average UK employee.
6. Life Insurance
In the wake of the pandemic, many relatively young individuals are becoming more concerned about the financial security of their loved ones. For most, it’s unrealistic to accumulate a sufficient safety net, and personal life insurance plans can be expensive and restrictive.
However, offering the option for high-quality life insurance, which they might not otherwise be able to afford, can act as a significant draw for top talent. Over 20% of employees now view life insurance as a more important perk than before the pandemic.
Each company and its workforce have unique needs and priorities. Thus, calculating premiums is a complex process that considers various factors such as:
- the age of employees
- employee earnings
- industry or sector
7. Learning and Development
In today’s fast-paced world, it’s important for employees to continually enhance their skills, especially considering that most skills are transferable. This presents a win-win situation, as employers benefit from a more versatile team member. 93% of employees believe that well-structured employee training programmes increase their engagement.
Employers can go beyond the workplace and fund comprehensive degrees, like MBAs, that could cost up to £65,000 in the UK.
Of course, there are also more affordable alternatives like Udemy or SkillShare that offer access to a curated selection of skill courses at a much better price.
The Future of Employee Benefits
As recruitment demands grow, so too do individual needs. This necessitates companies to investigate employee benefits that align with the evolving workplace culture. Consequently, enhancing the quality of employee perks is in everyone’s best interest.
A superior auto-enrolment scheme, like Penfold’s workplace pension, could open an unprecedented opportunity for your business. Request more information today to discover how we can transform your company pension