Carefully chosen employee benefits packages can benefit SMEs in several ways – but SME’s often report that the price point for a benefits platform for a smaller number of staff can make this unaffordable…
CREDIT: This is an edited version of an article that originally appeared on SME News
As setup and management of schemes are often proportionally higher for smaller numbers, affordability is a very real issue to overcome.
SMEs also fear becoming locked into a package which is scarcely used by employees, while larger companies may find that 10% uptake of benefits still delivers a value which will appear worthwhile to the board. In these cases, taking the more easily demonstrable value of ‘100% of staff attend accept the £10 voucher and attend the free lunch’ feels appealing, even if its true value to employees can be much lower and less flexible.
But pizza Fridays and a voucher for an online retailer once a year does not address the day-to-day challenges that a good employee benefits package resolves.
Carefully chosen employee benefits packages can benefit SMEs in several ways:
Attracting and retaining employees
A well-designed employee benefits package can help SMEs attract and retain talented employees by offering competitive benefits that add value to their compensation package and meet their needs. This is especially true if the SME is competing to recruit from the same pool as larger companies who offer these benefits as standard.
By offering competitive benefits that add value to their compensation package, SMEs can provide employees with the support they need to meet their goals and objectives. In fact, SMEs can often improve on the offering from larger companies for many staff as the bigger the company the more ‘cookie cutter’ the benefits provided often are. An HR team at an SME can really understand what the staff (or potential employees) will value and what will never be used.
Improving employee engagement and morale
Providing employee benefits can improve the overall job satisfaction and engagement of employees, leading to increased productivity and reduced turnover.
Employee engagement and morale are essential for any organisation that wants to be successful. One way to improve employee engagement and morale is to provide employee benefits. Employee benefits can improve the overall job satisfaction and engagement of employees, leading to increased productivity and reduced turnover. By providing employee benefits, organisations can improve employee engagement and morale, leading to a more productive and successful workplace.
Tax advantages
Some employee benefits such as health insurance, pension plans, and salary sacrifice schemes can provide tax advantages to the employers as well as the employee as they are deducted before tax and NI are calculated.
Your employee benefits from a lower out of pocket cost for their goods or services, and sometimes, in the case of salary sacrifice schemes, from a zero-cost loan, but this also reduces employers NI payments and the total tax payable making it wins all around for SME’s and their staff!
So, as an SME what’s the best way to implement an effective (and cost effective) benefits platform?
Speak to your staff – find out what they would really value and what they feel would be a waste of money. Even in a small company it’s unlikely one size will fit all, and of course staff needs change over time, but this is one of the most important parts of the process
Speak to suppliers – most will promise they’re the best. Most aren’t! Take your time in choosing the right one for your organisation.
Once you have a plan in place, ensure your staff understand the offer and can take advantage of the benefits to get the most out of them. Getting the word out about your scheme not only maximises the benefits to your staff, but also gives you the best possible reputational boost amongst staff and potential recruits.
Designing a cost-effective package that meets both their budget requirements and the preferences of employees can be a challenge for SMEs, but with the right balance of benefits, even smaller organisations have an opportunity to compete in the job market and reward their employees.
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