With a more competitive employment market, the need for employers to offer a wide range of appealing employee benefits has changed from being a ‘nice to have’ to a ‘must have’. The recruitment process is almost a two way interview with employees more carefully selecting which companies they work for, based on the range of benefits they’ll have access to.
Last year saw many businesses review their overall employee benefits strategy to include more highly valued benefits, over and above the traditional ‘nice to have’ benefits.
A comprehensive benefits package now includes a number of ‘must have’ salary sacrifice schemes:
- Childcare vouchers
- Cycle to work schemes
- Salary sacrifice cars
- Car parking
- Annual leave purchase
- Computer / mobile phone schemes
Along with the more traditional ‘nice to have’ benefits such as:
- Employee assistance schemes
- High street discounts
- Travel discounts
- Leisure discounts and gym memberships
- Cash back deals
- Reward and recognition programmes
Research shows that 25% of UK employees are not offered any sort of benefits package. However, according to studies conducted by Mercer; 36% of businesses say they actually saved money by having a flexible benefits scheme and 46% said there was no additional cost to the business.
As more comprehensive benefit packages are being explored by most companies in order to better attract, retain and reward staff, and taking into account that benefits are only one part of most HR functions many objectives and priorities, which ones should an organisation focus on implementing and just how much time will it consume. A common misconception is that the implementation of either a complete comprehensive range of benefits offered through a single benefit provider, or stand-alone schemes implemented to strengthen an existing benefits package could be time consuming and admin intensive. There is little truth to this, with benefit providers having refined the implementation, along with ongoing day to day management of the scheme, to be seamless.
Employers looking specifically at recruitment and retention concerns should pay particular attention to those benefits that employees actually want. Research conducted last year by PwC found that for almost a third of male employees in the UK (29%) a car benefit was the one that they would most like to see introduced by their employer. The research found that the most highly prized benefits were those that saved employees money or helped to make their salaries go further.
Salary sacrifice car schemes are rapidly growing in popularity and expected to make up an astonishing 10% of new car sales by 2025. At least 18% of employers currently offer salary sacrifice cars, and research conducted by Employee Benefits magazine last year in conjunction with flexible benefits consultant, Towers Watson, found that salary sacrifice car schemes are the most popular benefit that employers intend to add to their flexible benefits plan with 22% of respondents planning to introduce a scheme.
Both employees and employers benefit greatly from the introduction of a salary sacrifice car schemes. Not only do employees have the chance to get a brand new car of their choice and save an average of £80 per month in Tax and National Insurance (and an average of £40 p/m in fuel), but employers save an average of £257 per car per year, and improve overall staff satisfaction and retention.
According to the Office for National Statistics, over 50% of employees in the UK are now driving to work, prompting more and more employers to look closely at introducing a car benefit to their wider employee base and not just for essential users, management or director levels.
By choosing the right provider and actively promoting the scheme to employees through regular communications, these schemes can be extremely popular. Take up rates in excess of 10% (and in some cases much higher) are regularly seen by Tusker, the market leading provider of salary sacrifice cars, supporting just how popular these schemes really are.
In addition, getting staff into newer, more efficient vehicles that are properly maintained and insured (for business use as well as for social, domestic and pleasure) is addressing another vital need – that of health and safety. A carefully structured scheme can also significantly reduce an employer’s carbon footprint and introduce savings to the business, which otherwise would go unnoticed.
It’s encouraging to see the increased focus from employers to ensure their employees have a full suite of benefits available to them, and it’s evident that employers are looking to fill the gaps and prioritise the implementation of any outstanding ‘must have’ benefits.
We've seen a surge in interest in our scheme and in discussions with more than 330 companies (most of which are large organisations) who are interested in introducing a scheme, with more than 25% of those currently in the later stages of implementation.