Employee Benefits for Small Businesses

Going Beyond Your Mandatory Requirements

Beyond these mandatory requirements knowing what additional benefits to provide can be tricky. Most importantly, it depends on the needs of your workforce and where their priorities lie. There’s little point to providing benefits staff don’t use or value.

To help in this area, Drewberry put together our employee benefits survey. This focused specifically on SME workers and found that the top paid-for benefits staff wanted their employer offer were:

• Private Medical Insurance
• Life Insurance
• Income Protection Insurance
• Critical Illness Insurance.

Despite their size, SMEs can indeed offer insurance benefits, even if you have very few workers. To get a group scheme off the ground you typically need no more than three employees.

I’ve personally helped many such small companies get their own insurance benefits up and running.

Nadeem Farid
Head of Employee Benefits at Drewberry

While the above small business employee benefits involve monthly premiums, insurance policies aren’t the only perks out there. Also on the list of benefits employees and small businesses wanted to see were several low-cost or even free options, for example:

• Flexi-time
• The option to work from home
• Free snacks
• Discounts on gym memberships
• Casual dress codes.

The best packages actually include a mixture of both free and paid-for benefits.

After we published our survey results, we wrote another guide you may find useful: The 10 Best Employee Benefits People Value in 2024.

Group Insurance For Employees At Small Businesses

There are four main insurance benefits you can offer employees: Business Health Insurance, Group Life Insurance / Death in Service Cover, Group Income Protection and Group Critical Illness Cover.

Also, all employee insurance policies come with at least some form of additional benefits / employee assistance program that workers can use even if they’re not in the middle of a claim.

Business Health Insurance

Business Health Insurance pays for your employees to have private medical treatment for eligible conditions. This allows them to skip long NHS waiting lists and get treatment exactly when they need it the most.

Prompt treatment for health problems reduces time employees spend off sick. This is something that’s of particular benefit to small companies, where there’s often limited scope to transfer work to other employees should someone be absent.

Corporate Health Cash Plan

While Group Health Insurance is popular, it can also be fairly pricey. Smaller companies tend to find premiums per employee higher than for larger schemes, where economies of scale can bring down prices.

If a full Business Health Insurance scheme is out of your price range, there is an alternative: a Corporate Health Cash Plan.

Rather than paying for your staff to have private medical treatment, it’s a more affordable way of offering them help with the cost of everyday healthcare.

A Health Cash Plan pays towards common healthcare needs, such as dental checkups, fillings, eye tests, glasses and physiotherapy. It also often covers a set number of NHS prescription charges per year.

Death in Service Insurance

Also known as Group Life Insurance, Death in Service Cover pays out a lump sum should one of your workers sadly pass away while under contract with you.

This lump sum is a multiple of their salary, typically between two and four times earnings. The death doesn’t have to occur at work or in the workplace for the insurer to pay out.

In the event of a claim, the insurer pays out into a company-owned trust. The trust distributes the funds to the employee’s family, sidestepping inheritance tax on the payout. The family can use the money however they see fit, from covering funeral expenses to meeting their everyday spending needs.

Relevant Life Insurance For Micro Businesses

You can introduce Death in Service Cover with just three workers on your books. Your company doesn’t need to be massive to offer this valued benefit.

However, if your company is smaller than this, or you’re not ready to expand Life Insurance beyond key directors, you can still introduce company Life Insurance.

Relevant Life Cover is a highly tax-efficient life policy your business pays for. It’s available wherever there’s an employer / employee relationship.

The major difference between Relevant Life Insurance and Group Life Cover is that, with Relevant Life Insurance, the insurer underwrites you as an individual. This means you’ll need to answer a series of medical questions about your health and lifestyle. With a group scheme, very few workers will need to go through this process.

Group Income Protection

Group Income Protection is also known as Group Sick Pay Insurance because it enhances your company’s sick pay policy.

Most employers offer a period of full sick pay to their workers if they need to take time off as a result of illness or injury. Once that period of full sick pay is over, however, employees move to Statutory Sick Pay. This is the legal minimum amount of sick pay you must pay your workers and stands at £116.75 per week for up to 28 weeks.

Statutory Sick Pay is only a minimal benefit. Most employees would struggle to survive on this alone.

To provide further assistance to employees, Group Income Protection steps in once they stop getting full sick pay. It pays a proportion of a worker’s wages as a monthly benefit if they can’t work through illness or injury.

Executive Income Protection For Directors

As with Group Life Insurance, you typically need three workers for a Group Income Protection scheme.

For very small businesses or companies where only the director is looking for Income Protection, one option to consider could be Executive Income Protection.

This is a company-paid Income Protection policy for a single individual. It offers tax efficiency over paying premiums personally. However, as with Relevant Life Insurance, it’s worth noting that your insurer will need to underwrite you individually to get a policy off the ground.

Group Critical Illness Cover

Group Critical Illness Insurance covers your workers should they develop a critical illness from a list of conditions the insurer has laid out.

The most common claims on such policies are for cancer, heart attacks and strokes. However, most policies cover at least 12 critical conditions as standard, with the option to add an additional 20-25 illnesses for an extra premium.

The payout is a multiple of salary, typically between one and five times earnings.

Additional Benefits & Support Services

Insurers provide these alongside the core insurance benefit. These typically include:

• Employee assistance programs
• Digital GP service (check out our director’s experience using AIG’s remote GP)
• Second medical opinion / best doctors service (offering access to leading global experts if an employee becomes ill and wants a second opinion on their diagnosis or treatment)
• Mental health support
• Physiotherapy
• Medical helplines staffed by trained nurses.

Most importantly, these benefits can be used whenever, regardless of whether an employee has made a claim.

This makes them powerful tools to support employee health, wellness and wellbeing, for example by assisting workers in addressing niggling issues before they become full blown concerns requiring treatment, time off sick or a claim.

A survey from Aviva found that 75% of the employees using these services returned to work within 6 months.

The Top Free / Low-Cost Employee Benefits and Perks

As mentioned, there are more to employee benefits than insurance policies. There are plenty of low-cost or even free options on the market that can nonetheless make a major difference to any small business and its workers.

Benefits for Work-Life Balance

A good work-life balance is essential for healthy employees and productive workforces. However, UK employees endure among the worst work-life balances in Europe.

This can lead to burnouts and health problems as well as causing stress-related illness. It’s already apparent, with work-related stress, anxiety and depression now accounting for 15.4 million lost working days each year. Some things you can do to help your staff include offering:

• Flexi-time
• Extra holiday for length of service or for birthdays
• Regular time off or reduced work hours (WWF have ‘Panda Fridays’, allowing workers to take every other Friday off)
• Time off for charity and volunteer work

If you’re a small business, benefits that improve work-life balance are fairly simple to introduce. You can start by giving employees more time off and more control over when they work.

Benefits to Improve Employee Engagement

Employees who aren’t enthusiastic about their work often move on, increasing staff turnover and recruitment costs. That’s why employers need to think more about how to make their work environment more enjoyable for employees rather than focusing on purely optimising their workforce. Some ways to improve engagement include: 

• Company organised social events and wind-down activities.
• Employee rewards and public displays of appreciation.
• Free gifts as a bonus e.g. cinema / event tickets, high street vouchers, or a bonus payment.
• Education and training opportunities.

When employees engage with your business, they associate the success of the company with their own. Benefits that help with this include those which reward employees and show appreciation. Even something as simple as a company get-together can be the first step to showing employees that they are valued.

Benefits to Support Family Life

It’s hard to juggle working with childcare. Many parents find it all but impossible, leading to people falling out of the workforce. Even where both parents work full-time, families can still spend as much as 45% of their disposable income on childcare.

Despite this, too few businesses offer help to parents and carers. Some simple wins include:

• Childcare resources (Adobe provides weekly childcare vouchers)
• Sufficient maternity and paternity leave
• Information about local childcare services
• Flexible hours
• Opportunities to work from home.

Employers can also assist those with childcare needs. Some already do so and offer flexible working or the option for employees to work from home.

Flexible working has a range of benefits beyond simply giving parents more time with their children. For example, according to PowWowNow 70% of workers say that flexible working makes a job more attractive to them.

Retail Discount Scheme for Staff

Given the ever increasing cost of living many employers are turning to employee discount platforms to help their staff with rising costs.

For only a few pounds per month a retail discount scheme will provide your employees with significant savings on everyday expenses from groceries and clothes to technology, travel and fitness. Most discounts are offered in the form of instant cash back when a retail voucher is purchased through the platform.

As part of our technology offering we provide your staff with access to discounted shopping with some of the most popular discounts detailed below.

If you are looking to provide your employees with market leading retail discounts please don’t hesitate to pop us a call on 02074425880 or email help@drewberry.co.uk.

Health & Wellbeing Benefits

The UK currently has a serious health problem. 21% of men and 25% of women are inactive, meaning that they have not made any efforts at all to exercise. It’s no wonder obesity is rising and we’re seeing the associated health consequences.

While there are many reasons behind this lack of activity, ranging from health problems to a lack of time, there are a few minor changes employers can make to help out. A few ways you can help your staff include:

• Discounted gym memberships
• Fitness trackers
• Healthy snacks
• Active team-building events
• Standing desks.

Regular activity tends to keep health problems at bay, both in terms of physical and mental health. This can help reduce sickness burden on your business, particularly important for a small company.

Compare Employee Benefits Quotes & Get Expert Advice

At Drewberry, we have experience of building comprehensive employee benefits packages for businesses of all sizes across the country.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

• We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
• You’ll speak to a dedicated expert from start to finish
• We are very proud of the 3759 and growing independent client reviews rating us at 4.92 / 5
• We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐
• Claims support when you need it most.

If you are running a small company and need help setting up or reviewing your employee benefits give us a call on 02084327333 or email help@drewberry.co.uk.