3 surprising but profitable reasons to improve your employee benefits now

Whether you currently employ five, 50, or 250 people, your staff are the driving force behind the success of your business. That means you need to look after them.

In exchange for their hard work, you provide a salary and a pension, helping them to save for their life beyond work. According to the Department for Work and Pensions, UK workers’ combined pension pot in 2021 amounted to a massive £114 billion.

But in an ever-evolving employment market – and a post-pandemic society – there are other ways to look after your existing staff and to stand out to prospective employees.

Keep reading for a look at some of the ways you might opt to improve your employee benefits package and three reasons why you should.

1. A generous benefits package can help you retain experienced staff

While the so-called “Great Resignation” began in the US, post-pandemic shifts in worker priorities have affected the labour market at home too.

Statista confirms that the UK’s Great Resignation peak occurred between April and July 2022, when job-to-job resignations reached a record 442,000. 

Employers reacted by offering flexible and hybrid working. The effects of Covid lockdowns, though, could be more long-lasting.

An increased focus on wellbeing and a healthy work-life balance has aided the rise of “quiet quitting”. A predominantly Gen Z phenomenon, it involves doing only the bare minimum, a work ethos borne of frustration at pandemic job losses, perceived poor pay, and a lack of recognition.

As a small to medium-sized business, you’ll have experienced staff and key personnel that your business can’t do without.

Employee benefits are a great way to ensure these staff feel valued. This promotes a feeling of belonging, nurturing the emotional investment they need to contribute effectively to the running of your business.

2. Thinking outside the box with your benefits could help attract new talent

Last year, the Independent published the findings of a survey into the benefits employees look for when considering a new role.

Salary, flexible working, and career development are most important to UK workers. But 20% look for a health plan or other wellbeing benefits, with 61% saying they would be more likely to apply for a job that offered health perks. These might include:

• Private medical insurance

• Health cashback plans

• Access to a retained counsellor.

COVER magazine recently reported that the healthcare trust provider, Helix, offers skin cancer screening for employees following a rise in waiting times for assessments and referrals.

Back in 2020, meanwhile, the company review website Glassdoor listed some of the quirkier wellbeing benefits offered by UK firms, like:

• Yearly all-expenses-paid holidays for staff members

• An annual Christmas party for employees’ children

• Days off for birthdays, Christmas shopping, and preparing for a wedding

• On-site gyms, swimming pools, tennis courts and even a football pitch

• A four-week sabbatical for every four years of service.

While not all of these will be feasible for your business, offering additional benefits – and communicating them clearly – could help make you more attractive to new talent.

3. Improved staff wellbeing could lower absence and increase profit

Happy and emotionally invested employees feel valued, are more engaged, and could be more productive, ultimately increasing your profits.

A study by Oxford University has suggested that happy employers are 13% more productive, while a Social Market Foundation report saw this figure hit 20% over the short term.

Harvard University research gathered over a decade, meanwhile, found that employee happiness increased:

• Sales by 37%

• Productivity by 31%

• Accuracy by 19%

A well-thought-out benefits package won’t just make your employees happier. It can also improve their physical and mental wellbeing, helping to cut staff absence.

According to FTAdviser, employee ill health costs businesses more than £138 billion during 2023. The report found that UK workers lost just over six days a year on average, with mental health issues the largest cause of lost productivity. These issues included depression, fatigue, and burnout.

Encourage your staff to be open about their health struggles, adopt robust sickness and return-to-work procedures, and be sure the employee benefits package you offer supports physical and mental health across your workforce.

Remember that your workplace pension is the biggest benefit you provide

Whatever benefits package you settle on, remember that after the salary you offer, it’s your workplace pension that provides the biggest benefit to your employees.

Take the time to revisit your pension scheme and ensure it is fit for purpose. This might mean checking your provider offers competitive fees, intuitive online functionality, and funds that align with your company's ethos on sustainability issues.

Keep an eye out over the next couple of months for further pension guidance, including on making your company pension kinder to the planet.

Get in touch

In the meantime, if you need any help deciding on the right pension or employee benefits provider for your business, be sure to speak to Parker FA’s team of experts. Contact us to talk about what we can do for you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment and the value is not guaranteed. Any advice or considerations are personal to each individual’s circumstances. Levels and bases of, and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor. Advice on auto enrolment pensions is not regulated by the financial conduct authority. Workplace pensions are regulated by The Pension Regulator.