Why employee benefits are essential in the current job market

Many companies believe remuneration is the best tool to retain and attract talent in the current hot employment market. However, increasing salaries may be unsustainable for many companies, while a diverse collection of employee benefits may prove both more cost-effective and impactful.

A change in perception

Employees are becoming increasingly dissatisfied with salaries, according to data from HR advisory firm CIPHR (opens a new window), which claimed 70% of British employees surveyed did not feel that the pay rise received was reflective of their performance, with 44% saying they would seek out a new role.

With many employees being impacted by cost of living rises, most will be seeking a salary increase when deciding to stay in a role or look elsewhere. While this model provides short-term relief for the company and employee, it is not a sustainable model, and will require a company to continuously exceed financial target to maintain regular salary increases.

Offering a varied collection of benefits aimed at improving the professional and personal lives of all employees is therefore becoming an increasingly important avenue for companies to explore. Attractive benefits not only provide relief for workers in a range of ways, they are also designed to tackle financial, physical, and mental concerns employees may have.

Prior to the pandemic, employee benefits rarely strayed from a handful of schemes concerning private healthcare, travel season ticket schemes, group life assurance, and pension schemes, with more attractive benefits commonly used for selected employees.

However, the emergence of environmental, social, and governance trend, along with the pandemic, forced a cultural shift in many workplaces. Mental and physical wellbeing – along with an improved work-life balance grew in importance.

Building a diverse collection of benefits can enable companies to attract a wide set of talent. They can be tailored to specific groups that the company wants to particularly attract and retain as part of the overall business strategy.

How to select the right benefits

Physical health benefits

Benefits focused on physical wellbeing now go far beyond access to private GPs, healthcare, and life assurance.

These benefits could include gym memberships provided by the company, weekly fitness classes during or after work hours, and access to fitness apps. Employers can also provide services focused on women’s health, such as In vitro fertilization (IVF) funding, and on men’s health.

Giving employees access to maintain good physical wellbeing through benefits such as fitness and health can also prove useful in helping workers combat stress and improve mental health.

Mental health benefits

Mental health benefits have become increasingly popular in recent years, with benefits designed to promote a healthy work-life balance.

Schemes such as individual or resilience training, which promotes ways to deal with stress in the workplace, along with other tools, are one example of how mental health benefits can be used.

Other benefits such as employee assistance programmes are designed to help employees learn to deal with personal and professional issues, aimed at reducing undue stress. Some companies also offer mindfulness workshops, healthcare education and tools, such as meditation apps, and access to dedicated mental health helplines.

These benefits work to reduce to stigma that continues to surround mental health, allowing employees to take steps to address stress and become more productive.

Financial benefits

Financial benefits are aimed at assisting employees better manage their funds and educate on ways to save for the future.Benefits could be tailored toward specific demographics or high earners and may include[SA8] [RJ9] share schemes, ISA and LISA schemes, financial planning, and advice – allowing employees to tailor the benefits to their own goals and needs.

Other benefits include debt consolidation schemes and salary advances or loans, offering ways to help employees suffering from short or medium-term financial issues.

Team building benefits

Benefits which offer opportunities for employees to help out with charitable schemes and social events can be beneficial in creating a positive work culture.

Activities like workplace sports teams, networking opportunities both inside and outside the workplace, and schemes such as company lotteries all help build a positive workplace community within an organisation, a key factor when attempting to retain your workforce.

Other cultural schemes include organising charitable events, be that fundraising efforts, food drives, or volunteering opportunities to allow employees to contribute to a cause that is important to them, or else a company-wide charity.

Work-related benefits

Work-based benefits focus on initiative which make commuting to the office more manageable for employees. Benefits include cycle to work schemes, which allow companies to purchase bicycles for employees, with the money being deducted from their salary. Other initiatives like lift sharing, train season tickets, and car parking facilities all work to make getting into the office far easier.

Of course, following the pandemic, a flexible working model which allows employees to work from home or from the office has become a mainstay, with many employees now seeing it as a minimum requirement for jobs.

Other workplace benefits include subscriptions to literature relevant to job roles, mentor initiatives for younger employees, employee recognition schemes, further education opportunities – which could reward those for short-term success or celebrate those who have spent long periods of time at a company.

Workplace benefits are varied, however, they assist in creating a work-life balance which many will see as attractive when choosing to stay or to leave a role with minimum cost impact.

Employers can be flexible in how they approach building the different packages and may place greater emphasis on one section more than another.

Company size shouldn’t impact benefits

A company’s size doesn’t have to impact the benefits it has available, even small companies can offer incentives which could prove pivotal when looking to retain talent.

While larger companies may be able to secure corporate partnerships or fully fund family planning schemes, smaller companies may choose instead to allow employees to claim gym memberships back on expenses, or partially fund health procedures.

Providers are increasingly embedding value-added services within their products and a good benefits adviser should be aligning these to your strategy, highlighting these where relevant and helping you communicate these to your employees.

If you would like to learn more about the ways employee benefits can have a positive impact on your business, please contact:

Andrew Simpson, Vice President Employee Benefits

E: andrew.simpson@lockton.com

T: +442079332799