It’s no longer enough to simply offer a competitive salary. Whether you want to engage and retain your current employees or recruit top talent, you need to stand out against the crowd.
One way of doing this is by adding a discount scheme to your employee benefits package. This can add real value to your staffs everyday life by helping to stretch their income further.
But what exactly is an employee discount scheme?
What Are Employee Discount Schemes?
Employee discount schemes are a simple way for employers to help their staff make big savings on everyday purchases. These savings can help them to save hundreds of pounds a year.
As an employer you can go directly to a retailer and negotiate a discount, or you can sign up to an online platform.
Online discount schemes tend to be more popular than going directly to a retailer. This is because for a relatively small cost, employers can provide their staff with a vast range of discounts all in one place.
They are easy to set up and often come with extra features baked in to improve employee engagement and make it easier to manage HR functions.
There are plenty of platforms to choose from, each with its own features, and the amount of savings you get and how you get them can depend on which one you pick.
Which Type Of Retailers Offer Discounts?
Employee discounts schemes offer savings for just about any kind of retailer. This means all your employees, regardless of age or interests, will be able to benefit.
The most common category of retailers include:
Categories of retailers
Supermarkets
Most big chains including Tesco, Morrisons, Sainsbury’s, Waitrose, M&S, Aldi, Lidl and Iceland
Clothing and accessories
Hundreds of high street retailers like ASOS, Nike, Debenhams, Go Outdoors, Selfridges, H&M and more
Entertainment
All major cinemas, theatres, heritage sites and experience day companies
Health and fitness
Brands such as Boots, Decathlon, CyclePlan, etc
Travel
Providers like Virgin, Travelodge, Cottages.com, Railcard and JustPark
Bars, restaurants and food delivery
Everything from Just Eat and Graze to Costa and Pizza Express
Technology
Retailers like Currys and Argos, as well as brands like Apple and Canon
Home and garden
B&Q, Halfords, Hobbycraft, IKEA, Cherry Lane, Emma Bridgewater and many more
Do Discounts Come In Different Forms?
As mentioned, each discount scheme is different and the formats in which they offer discounts will vary. Some will offer online cashback whereas others will offer discounts via reloadable cards.
It’s important to understand the different options available, as some will provide better discounts than others.
Online Cashback Provides a certain % of discount when an employee goes to a retailers website via the discount platform. Once a purchase has been made the employees cashback will be paid back into the discount platform. This can then be transferred out into their chosen bank account. Online cashback tends to offer a lower discount compared to other forms.
Digital Vouchers Employees can purchase vouchers for different values e.g £25, £50 or £100 to use in a particular shop such as Tesco. They then receive cashback on the value of the vouchers. Unlike online cashback which provides cashback on a one time purchase, digital vouchers allow an employee to get discount on the value of their vouchers which can be used on different occasions.
Reloadable Cards Like a gift card, reloadable cards allow employees to add a monetary value to a physical card which they can then use at a specific retailer. They then receive cashback on the amount they added to the card, which is paid back into the discount platform.
Discount Codes Certain retailers will provide specific codes which employees can use online on their website when making a purchase. An employee simply has to add the code when paying and the discount gets applied there and then.
What Are The Benefits Of Employee Discount Schemes For Employers?
Employee discount schemes offer so much more than just discount. As part of a comprehensive employee benefits scheme, they can offer a number of benefits for employers.
Cost Effective Benefit
Not all employers can afford to offer big bonuses or pay increases as an employee benefit. Employee discount schemes are a cost effective benefit which are valued by employees as they can help them to save money on every day purchases.
Easy To Set Up And Use
Unlike other employee benefits such as salary sacrifice schemes, discount schemes are easy and straight forward to set up.
Most online platforms do all the leg work for you. This means as an employer you can offer a great benefit without having to spend a lot of time and money implementing and maintaining it.
Increased Employee Engagement
Benefits such as discount schemes can help to make employees feel more engaged.
Helping them save money shows that as an employer you care about their overall wellbeing. As a result of this employees feel more valued and in turn become more engaged with you as an employer.
Increase Productivity
Off the back of having a more engaged workforce, employers can benefit from higher levels of employee productivity.
This is why it is important for employers to look at providing benefits such as discount schemes that help to engage staff. Employees benefit but employers have a lot to gain as well.
Losing and replacing people is expensive and time-consuming for companies. That’s why it’s so important that you treat staff well; so they stay longer.
Investing in meaningful employee benefits such as a discount schemes can help retain staff and avoid high staff turnover.
Recruiting Top Talent
Not only can benefits such as discount schemes help reduce staff turnover, they can help employers to recruit top talent.
Employees are looking for more than just a good salary, they want other, real tangible benefits which they can utilise in their life outside of work.
What Are The Benefits Of Discount Schemes For Employees?
Everyday Savings
The most obvious advantage for employees is the savings on offer. They genuinely can help salaries stretch further.
For example, a household spending £400 a month on food, could save up to £336 a year and that’s just on groceries. There are hundreds of other discounts waiting to save employees hundreds of pounds more.
Feeling Valued
Employees widely report feeling much better about their job when they feel valued. Employee benefits such as employee discount schemes are a great way to achieve this.
Helping employees save money helps to show that you as an employer care about them outside of the office and value them as people.
Providing everyday discounts can help reduce the cost of living. Paying less for everyday items such as food, travel and insurance can make salaries stretch much further. This in turn can relive money worries and feelings of stress.
Read more!
How Much Can Employees Save With A Discount Platform?
Depending on the lifestyle of your employees and the platform you choose, thousands of pounds can be saved each year.
The different types of shops have different levels of discount, some being higher than others. Employees could expect to save the following at different retailers:
Supermarkets: up to 7%
Restaurants, bars and food delivery: up to 12%
Fashion and accessories: up to 15%
Electrical’s: up to 9%
Days out and experiences: up to 20%
Entertainment: up to 20%
Travel: up to 15%
Health and wellness: up to 20%
Home and garden: up to 10%
Examples Of Employee Yearly Savings
The average family in the UK (2 adults and 2 children) spends around £100 on food shopping each week. With up to 7% off at some supermarkets, as much as £336 can be saved each year just on groceries – that’s over three weeks of food for free!
Example Savings
Retailer
Monthly Spend
🛒 Food & Groceries
£400
🍔 Eating Out
£230
👖 Fashion
£170
🚘 Motoring & Fuel
£350
🏡. Home, Garden, Pets & DIY
£100
🍏 Health & Fitness
£60
🍿 Days Out & Experiences
£100
✈️ Travel
£200
💄 Beauty & Fragrance
£60
💐 Gifts & Flowers
£40
Total yearly saving
£1,710 😮
*Discounts calculated from the My Drewberry savings calculator
It’s clear, then, that the more employees engage with their discounts scheme, the more they stand to gain.
Salaries can stretch further, financial wellbeing can improve and levels of stress can be reduced. This can ultimately lead to improved mental health.
How Much Do Employee Discount Schemes Cost To Set Up?
In terms of value for money, it’s hard to argue that employee discount schemes are one of the most cost-effective employee benefits you can offer.
There is no set up fee associated with putting one in place, employers just need to pay a small ongoing monthly subscription fee.
The cost of this monthly fee will vary depending on a number of different factors, so it’s important to understand what these factors are.
Size Of Your Business
The more employees you want to offer the discount scheme to, the more expensive your monthly fee will be.
For example if you have 10 employees and opt for a scheme with a monthly fee of £5 per person, you will be charged £50 per month. For a team of 20 you would pay £100.
Most providers offer tiered plans based on features and number of employees. This means that there are options for companies of all sizes and different budget needs.
It’s often worth paying that little bit extra to provide a benefit that employees really value, rather than go for the cheaper option that no one uses.
Martyn Coates
Senior Employee Benefits Consultant at Drewberry
What Your Company Wants
If you’re looking for an all-singing, all-dancing discounts platform, naturally, you’ll be looking at a bigger monthly bill.
Platforms that offer the biggest range of discounts and largest savings will demand a higher premium.
If you’re happy to go for a basic plan then you can keep the cost lower. You’ll still give your team access to a range of different discounts but they might not be the most desirable.
The Discount Scheme You Choose
Different discount schemes will charge different monthly fees. Most platforms cost below £10 per employee, per month. Some of the most basic packages are on offer for as little £5 per employee.
Like with everything in life though, you get what you pay for. The higher the monthly subscription you choose, the better services and discounts you and your employees can expect.
Frequently Asked Questions
What is the difference between staff discount and employee discount schemes?
Employee discount schemes often get confused with a staff discount, however they are very different.
A staff discount is a percentage saving for employees on what the company they work for sells. For example, one of the best staff discounts is from Lush, where the employees get 50% off Lush products and Lush spa treatments.
This is a great saving for Lush employees who use their products, however for those that don’t it isn’t a valuable benefit.
Employee discounts schemes differ as they provide a wide range of savings from hundreds of different retailers and services. Yes as an employer you have to pay to access these benefits, however they provide savings for everyone. Savings which can make a real difference to reducing an employees everyday costs.
What is the difference between salary sacrifice and discount schemes?
Salary sacrifice is another employee benefit that can sometimes be confused with employee discount schemes.
Unlike a discount scheme, salary sacrifice is a contractual agreement between an employer and their employee. A worker agrees to give up a portion of their annual salary to receive a specific non-cash benefit, such as childcare vouchers, cycle to work scheme or pension contributions.
Using this type of scheme, the employee saves on tax, and both the employee and employer save on National Insurance for the amount that’s sacrificed.
An employee discount scheme on the other hand, is a platform which simply offers a range of different discounts for common retailers. Employees do not need to give up a proportion of their annual income and there is no need for a contractual agreement.
Both salary sacrifice and employee discounts bring their own distinct advantages to the table. And, since the outlay for the employer is relatively low, it makes sense to allow employees access to different kinds of savings through both of these schemes.
The main thing is, they’ll both be appreciated by your staff because they show you value and appreciate them and it will also make their money go further, which is always a good thing.
Are employee discounts schemes a taxable benefit/benefit-in-kind?
As a non-cash perk, discount schemes are classed as a non-taxable benefit in kind.
They can be deemed as a ‘Trivial Benefit’, which means that as an employer you can provide each of your employees with a gift or benefit up to the value of £50 tax free and without having to include it on your P11D.
To be deemed non-taxable a trivial benefit benefit cannot:
cost you more than £50 to provide
be cash or a cash voucher
be a reward for an employees work or performance
sit within the terms of an employees contract
There is no limit to the number of trivial benefits an employee can receive, unless they are a director and then the total value cannot exceed £300 a year.
Like when adding any perk to your employee benefit scheme, it is always best to check the tax implications with a tax specialist.
Do Employees pay anything to access a discount scheme?
No. As an employer you pay the monthly subscription fee which gives your employees access to the different discounts.
How Do I Start An Employee Discount Scheme?
Setting up a discounts scheme can differ between platforms, but it tends to be extremely simple to do. As different businesses have different needs, before looking for a provider its good to ask yourself the following:
Why do you want to offer a discount platform?
Do you want the employee benefits discount scheme to improve engagement? Help reduce absenteeism? Or attract new employees? By understanding what you want you will be able to measure more accurately if the scheme is having the desired affect.
What do you want the platform to do?
Some platforms will offer more than just discounts. Additional features can include rewards and recognition or HR management. It’s worth understanding what it is you need the platform to do. If you don’t you could find yourself paying for a something that isn’t fit for purpose.
How will an employee discount scheme work alongside your existing employee benefits package?
It’s important if you have an existing employee benefits package to think about how another benefit such as a discount platform will fit in.
What is your budget?
The cost of schemes will vary depending on what they offer. It’s important to understand how much budget you have so you can research the schemes that offer platforms in your price range.
Do Your Research
Based on the answers to the above questions you can start looking at the different platforms on offer with a clear understanding of what you want. This will help you instantly rule a number out. For those left in your short list think about:
Value for money Which platform is the best value for money, based on what you’re looking for and want to pay?
Features available Which platform has the most features and, more importantly, the most features that are useful and relevant for your business?
Discounts on offer What platforms offer the best discounts? Are the discounts for common retailers that your employees will actually use?
Ease of use Do any of the platforms you’ve seen stand out from a convenience standpoint? Perhaps they make a point of how user-friendly their software is, or the ongoing support they provide?
If you need help deciding which platform to use it might be worthwhile speaking to independent expert like one of the Drewberry team.
Once you’ve decided which platform you want to learn more about, it’s time to enquire.
You’ll need to provide some basic information like the number of employees you have and your contact details. This will help the provider outline some suitable options.
At this stage, you’ll be able to get concrete information on the price, features and discounts available. You will also be able to get an understanding of how you can integrate a platform into your business. It’s also important to understand:
What terms and conditions come with using the platform?
Can the platform can be white labelled with your companies branding?
How will your employees be enrolled and what data is needed?
How long does it take to set the platform up once you have decided you want to implement it?
What ongoing support is offered with the platform?
Integrate Scheme Into Your Company
One of the many great things about employee discounts schemes is that they are designed to be easy to get up and running. Most providers will do all the leg work for you to make the process as painless as possible.
In most cases you will just need to send your provider a list of employees who need access and they will generate logins for them.
Communicate New Benefit To Employees
Once everything is set up you need to think about how to communicate the benefit to staff. Without effective communication the likelihood is that the scheme won’t be used by your employees.
When introducing any new employee benefit you need to let your employees know that it is available. It can be tricky to get them to engage in internal communications, but this is something that is vital for the success of any employee perks.
If you want your employees to pay attention it’s important to reiterate the benefits your company provides. You can do this regularly through channels such as:
Email
One to ones
Staff meetings
Annual pay reviews
Interviews
Tailor Communications
When communicating the benefits of employee discounts put them into context for your employees.
For some people, a 4% discount at their local supermarket isn’t that inspiring. However, if you explain that over the course of a year it could save them enough money to pay for multiple weekly food shops, this becomes more engaging.
Measure Engagement
As an employe, it’s in your best interest to keep track of how much your employees are engaging with a discounts platform.
If you don’t have the time or resources to do this in-house, you might be able to work with the platform you’re using.
It’s worth keeping reporting in mind when you research providers. Being able to see how and if employees are using the platform can help you determine if it is a success or not.
Review Regularly
By reviewing engagement levels regularly, you can see if you are providing a valuable benefit that employees use.
If they aren’t using it, it might be a sign that you need to implement something else. After all there is no point in paying for a service that no one is using.
Best Employee Discount Schemes / Platform Providers
There are a number of discount scheme providers in the UK, each offering different discounts and features. It’s important to compare them against each other to make sure you pick the one that aligns with your needs.
Top providers
My Drewberry This flexible, easy to use online portal offers an all-in-one employee benefits platform. Its employee discount feature gives staff access to hundreds of discounts for different brands. You can also easily add and manage other benefits such as Group Income Protection, Group Health Insurance, Death In Service and your corporate pension.
Perkbox
Offers employees access to a range of discounts as well as benefits relating to wellbeing, recognition and engagement. These are all wrapped up in one employee experience platform.
Reward Gateway
One of the largest all-in-one employee engagement platforms on the market. Reward Gateway offers a range of discounts for over 900 retailers. It is a flexible platform which allows employers to pick and choose which engagement tools are right for them.
Staff Treats
Is a simple platform offering employees discounts on groceries, entertainment, travel and more. Offers a tiered pricing system starting from just £2.50 per employee, per month.
People Value
Provides some of the best discounts on an easy to use platform which can be personalised to your company.
Compare Employee Benefits Quotes & Get Expert Advice
If you want to add an employee discount scheme to your benefits package we’re on hand to help. Our experts can ensure you get a scheme thats right for you and your business.
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