Do your staff know about your company’s benefit scheme? Recent research by Cass Business School, at City University found that 64% of businesses failed to tell their staff about the array of benefits on offer.
This seems like a waste; offering benefits is a great way to reward and keep your most valuable resource: your staff. By not spreading the word to staff companies are not getting a return on their investment.
Research by the insurer, Unum1, looked at the ‘communications chasm’ between what employers offer and what employees think they are entitled to. They found that businesses which did not tell staff about benefits had a higher staff turnover and absence rate. Unum argued that for a business with 1,000 employees the costs associated with sickness absences and high staff turnover could be £470,000 more than for a business with good communication policies regarding staff benefits.
Providing that staff know about benefits they can have a great impact on recruitment, employee engagement, loyalty and productivity.
How staff feel about benefits
- 30% of staff said that employee perks were a key reason for joining their organisation.2
- 36% of staff said that the benefits package was the key reason for staying with their employer.2
- Over a third of employees said that a lack of benefits makes them more inclined to leave their employer.3
- 60% of staff with 3 or more benefits can see themselves staying with their employer for the next 5 years compared with 35% of staff who don’t receive benefits.3
Spread the word regarding staff benefits
Many companies communicate the benefits on offer via a variety of media:
- The company intranet
- Posters and notice boards
- One to ones
- Desk drops
- Email newsletters
- The employment contract
- The original job advert
Whilst it is great that the message is getting to staff members they might not actually understand the value of the benefit on offer.
For example, although income protection is viewed by ‘Which? Money’ as the benefit that every working adult in the UK should consider, many employees would not know what it is if they saw it written down on a contract or job advert. Employees tend to understand benefits such as buying extra holiday and gym membership, however certain benefits might need to be more clearly communicated so that staff can recognise their value.
Among the top ten benefits on offer by businesses are death in service benefits, critical illness cover and income protection.
Death in service benefits
Life insurance is a popular option with employees. Offered as a death in service benefit it pays out a lump sum should the employee pass away whilst in service with your company. Multiple people can be covered and the policy is owned by the business. You can also offer different levels of cover to different staff.
A tax efficient option for employers is to offer a relevant life policy. This can be offered to any employee or company director. Relevant life policies are a popular choice with small companies as they allow you to cover fewer people than a group policy and you can even just cover one company director.
Relevant life plans are tax efficient as they are not considered a benefit in kind and therefore not subject to national insurance or income tax. From your point of view employer national insurance contributions are not charged and you can claim it as a business expense saving corporation tax of around 21%.
Critical illness cover
A critical illness policy pays out a lump sum if the employee suffers from a critical illness. The critical illnesses covered vary depending on the insurer but include around 12 core serious conditions such as heart attack or stroke. There is an option to extend the policy to cover additional conditions.
As with life cover you can cover employees by multiples of their salary and offer different levels of cover to different people.
Income protection can be used to supplement existing staff sick pay as it pays out a monthly benefit if the person covered is unwell or injured. Many policies offer own occupation cover which means that they would be covered if they were too ill to do their own job.
The employer has the option to choose a deferred period which is the length of time the employee would need to be off work before the policy pays out. This is usually set for when the occupational sick pay would run out.
Expert support is often provided by the insurer to help employees get back to work. This helps the business as well as the employee as it minimises the effect on the business of the employee’s absence.
With such an array of group insurance policies on offer it can be helpful to speak to an expert. At Drewberry Insurance we can discuss your requirements and shop around for the best deal for your company.
- Unum (2013) Failing to tell staff about employee benefits is money down the drain. Available from: http://blog.unum.co.uk/news-and-views/failing-to-tell-staff-about-employee-benefits-is-money-down-the-drain
Mercer (2012) What’s working survey