Employee Benefits for Small Businesses

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10-09-2020

Employee Benefits for small businesses are just as important as they are for big corporations. However, not many small business owners offer their staff a benefits package.

Often, smaller businesses find that employee benefits clash with a limited budget. Yet this can make it difficult to give the business the competitive edge it needs to attract new talent.

Cost doesn’t have to be everything when it comes to employee benefits, though. There are many different benefits and perks that are both affordable and in high demand. As such, they’re particularly popular among small businesses with a limited a budget.

Why Provide Employee Benefits?

60% of UK workers are unsatisfied with their workplace benefits. However, only 39% of employers are aware of their workers’ general dissatisfaction. Clearly, there’s a big mismatch between employees’ opinions on their current benefits and companies’ awareness of the issue.

Yet offering employee benefits has numerous perks. For instance, it can:

  • Improve employee retention, reducing staff turnover and cutting recruitment costs
  • Make your business stand out when you’re looking to attract new talent
  • Increase productivity
  • Improve employee morale
  • Reduce stress and associated sickness absence.

Benefits for Work-Life Balance

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

25-34-year-old UK workers have it worst, spending an average of just 4.8 hours a day indulging in leisure activities, excluding time spent eating, sleeping or doing household chores.

Presenteeism is becoming a serious problem in the UK. It’s where employees feel so pressured to be present at work that they come in even when they’re ill or are supposed to be taking their holiday.

This can lead to burnouts and health problems in the long run 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

The Best Work-Life Balance Benefits

  • Hotjar: Gives new employees €4,000 to build their own office space at home.
  • Netflix: Unlimited holiday allowance and no official work hours.
  • AirBnb: $2,000 stipend to travel to any Airbnb location.
  • Daimler: Employees can choose to have work emails deleted automatically when on holiday.

Affordable Alternatives

  • 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.

A better work-life balance can reduce stress and associated health problems, as well as improving productivity.

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. When employers set strict work hours with no leeway, employees may find themselves missing out on life outside of work.

Benefits to Improve Employee Engagement

44% of HR professionals believe that employees lack the support they need to thrive. Improving employee engagement is hard without this support.

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.

The Best Benefits on Offer

  • Money.co.uk: An in-office Star Wars themed cinema with regular film screenings for employees.
  • JustEat: Weekly wind-down events with free food and drink and a live DJ.
  • Buzzfeed UK: Regular live performances from British artists for employees.
  • VisitBritain: Regular giveaways of West End theatre tickets and trips to top attractions and events across Britain.

Affordable Alternatives

  • 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 an employee is engaged with your business, they associate the success of the company with their own success. To achieve this, small business owners need to make their staff feel as if they are a part of the business.

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 Employees’ Families

Parents are struggling to find a good balance between caring for their children and their careers. Inflexible or long work hours and expensive childcare seem to be the main culprits.

Even with both parents working full-time, families can still expect to spend as much as 45% of their disposable income on childcare.

Despite this, too few businesses offer provisions to parents and carers to help them strike that important middle ground where they can both pursue a career and support their loved ones.

The Best Benefits on Offer

  • VisualSoft: No set work hours and the ability to work from anywhere.
  • Brewdog: Pawternity leave, which is one week paid leave to help new dogs settle in.
  • Netflix: Unlimited parental leave.

Affordable Alternatives

  • Childcare resources (Adobe provide weekly vouchers towards the cost of childcare)
  • 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 by introducing 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. 70% of workers say that flexible working makes a job more attractive to them.

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.

The Best Benefits

  • Reebok: Crossfit classes and onsite gym.
  • Nike: Onsite fitness centre with regular classes and a range of facilities.
  • Patagonia: Provides company bikes, yoga classes, and time off for surfing.
  • Transferwise: Onsite sauna and hammock for regular breaks.

Affordable Alternatives

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

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.

Of course, there will be instances where employees unfortunately face an illness. The ultimate way to support in such circumstances is to offer a benefit such as Group Health Insurance.

This pays for employees to have private medical treatment for eligible conditions, getting them seen faster and potentially back to work quicker. Group Health Insurance is popular — in fact, it’s the insurance benefit that workers would most like their companies to offer.

Financial Support

Money worries are one of biggest causes of stress. More than 1 in 5 UK employees feel stressed because of their finances.

This may have something to do with the 1 in 4 people that have less than £100 left at the end of the month or that 1 in 4 Brits have a mortgage of at least £100,000 left to pay.

To help employees in this area there are a few valuable employee benefits that small businesses can offer which don’t cost very much but can make a big difference.

The Best Benefits on Offer

  • Starbucks US: Full tuition reimbursement.
  • Facebook: Free accommodation for interns with a free shuttle service to and from campus.
  • Google: Death benefit of 50% of worker’s salary paid out for 10 years.

Affordable Alternatives

  • Group Life Insurance
  • Group Income Protection
  • Matching employee pension contributions
  • Student loan support
  • Season ticket travel loans.

Group Life Insurance is one the most popular employee benefits to offer. It’s inexpensive yet also highly valued among staff. It pays out a multiple of a worker’s earnings to their loved ones should they pass away.

This can provide comfort for workers, who know that their families will be taken care of financially should the worse happen.

Another area of concern for employees surrounds what would happen should they fall ill and be unable to work. How would they cope with no money coming in?

Employers can step in here as well, offering benefits such as enhanced sick pay over and above the minimum statutory sick pay you’re legally obliged to pay.

A step further would be Group Income Protection. This pays out monthly benefits to incapacitated employees equal to a percentage of their pre-tax salary should they be unable to work through illness or injury.

Employee Benefits Quotes and Expert Advice

While small businesses do face some constraints when it comes to putting together a good employee benefits package, budget doesn’t have to be one of them.

There are many ways that employers can be creative with their perks that won’t require them to bankrupt their business just to reward their workers.

At Drewberry, we have experience of building comprehensive employee benefits packages for businesses of all sizes across the country. If you would like to learn more about employee benefits for small businesses, why not speak to us on 02074425880? We’d be happy to assist.

I had a great experience with Drewberry, they have a lot of knowledge and expertise with life insurance and income protection and were able to advise me and arrange suitable products. Highly recommend.

Lachlan Mellings
12/08/2020
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