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Ten cost-effective tips for a competitive benefits package
People are motivated to succeed in their job in many different ways. A multitude of factors contribute to motivating employees to succeed in their job. Career advancement and better work/life balance are among the top motivators for employees to stay with their current employer or change jobs.
If the basic salary is at market rate, there are several cost-effective perks and incentives that can be provided to attract and retain talent motivated by more than the cash value of a salary package.
There is never a ‘one size fits all’ solution that will appeal to top performers and engage existing staff, but we’ve compiled ten suggestions that could complement the basic salary for a competitive benefits package.
To attract and retain employees with a competitive benefits package, you could consider including the following perks.
Extension of medical insurance
Access to private healthcare for the individual often forms the cornerstone of a standard benefits package. If offering full family cover is a cost burden, it’s possible to allow the employee the option to extend their membership to their family at your business rate. The cost of this can be deducted in instalments from their net salary.
This can include flexi-time around a set of core hours, working from home and compressed hours. Especially for those motivated by a greater work/life balance, this can benefit performance by improved motivation and productivity.
The ability to increase the annual leave entitlement (5.6 weeks including bank holidays is a statutory requirement) is often a sought-after perk. This can be facilitated by allowing employees to purchase extra days, or accrue extra holidays through long service.
To appeal to employees’ altruistic side, you could consider allowing at least one paid day off a year to dedicate to charity work. There are also several payroll giving schemes available, which allow individuals to give directly from their pre-tax salary to their chosen charity. In some cases, organisations match employee contributions.
If a contributory pension scheme isn’t available to staff, you could facilitate group-wide access and complementary financial advice to a stakeholder pension scheme. The nature of the pension means that employer contributions are not required, but would allow employees without a private pension plan the opportunity to initiate a savings plan.
UPDATE: Legislation regarding pensions is now changing. Find out what you need to know about pension’s auto-enrolment.
Learning and development
Continual improvement is essential to career advancement, and one of the most important ways to attract and retain high performers. Facilitating learning and development can include; developing a mentoring programme, regular internal appraisals and access to external training courses. In some cases, educational sabbaticals and loans could also be appropriate.
For employees relying on public transport to reach the workplace, the offer of a loan for the price of an annual train ticket can help reduce their costs. When a vehicle is included in the package, the flexibility to take this as the cash alternative is often appreciated.
With onsite childcare facilities a fantastic perk for working parents, unfortunately it’s unrealistic for the majority of UK employers. An alternative is to offer a childcare voucher scheme which could ensure that employees realise substantial tax savings on childcare costs.
Motivation and productivity can be improved by small gestures that indicate that employees are appreciated. A favourite is giving each employee their birthday off, or providing free beers and a chance to socialise in the office late on a Friday afternoon.
Perhaps the most attractive option for employees is to be able to pick and choose from a set range of benefits, including the suggestions above, to suit their personal circumstances. Many flexible benefits are run using salary sacrifice arrangements, so if the employee doesn’t need any of the benefits on offer, they keep the cash equivalent.
Get a feel at interview or appraisal time for what motivates the individual to ensure that they’re aware of the employee benefit(s) available that may be of interest to them.