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Employee Benefits, What’s Most Important?

Posted on: 16 Aug, 21

Do you expensively try and compete with the big brands and offer everything under the sun or should you focus on key areas? Oury & Clark debate the pros and cons, and what really matters to staff.

Mind if I bend your ear a bit about employee benefits?

Ooh, am I being spoilt?

Not exactly, but you’re on the right track.

Boo! But go ahead.

A client came to me needing some advice about what they could do to improve worker retention and the recruitment process.

Not quite as exciting as a night out on the town, but I can see that’s important.

Exactly. And it’s not as simple as increasing their salary.

Or giving them a bit more of a bonus? Like, say, giving them a 1963 Ferrari GTO as a company car?

You’re not having one.

I was talking hypothetically, obviously.

Moving swiftly on. What it boils down to, is what makes your workforce (both existing and potential) a happy one.

And an appreciated one.

Exactly.

Ok, I see where you’re going with this. So, when we’re talking employee benefits, what are we talking about?

Well, now we’re getting into the meat of it. It really depends on several things: the company size, and the type of workforce. And you could probably add budget to that as well.

What do you mean?

Well, picture a large financial company. They are going to have the muscle to provide extensive perks to all their employees: private healthcare, quality pension, discounts on high street brands, public transport season tickets, company cars… the list goes on.

And I imagine the smaller companies can’t provide this many.

You’re correct. Take private healthcare for example; for an ageing workforce, that’s going to be more expensive. However, there are still options.

Such as what?

The key reasons that might tempt somebody to move to a small or even medium sized company tend to have nothing to do with perks.

What are they then?

In a smaller company, you have the chance to gain a broader range of skills, as you are likely to interact with staff from all different areas.

Also, as the company grows, I should imagine it has the potential to be a lucrative move, especially if you come in on the ground floor.

Nevertheless, these companies still would want to provide some basic perks.

I should imagine a pension would be one of the main ones.

You’re correct. Although pension can almost not be considered in this category anymore; they are compulsory for any company, big or small, and employees are auto enrolled.

But I should imagine the size of employer contributions to a pension could be considered as a perk.

You are right.

Any others?

Private health insurance is probably the next big one. It could definitely be a big deal for somebody to lose their health insurance when moving from one company to another, and very well put them off moving: particularly if the health insurance covered family members.

And if the private health insurance covered a chronic illness, somebody would be very reluctant to move to somewhere without that health insurance.

You’re completely right.

What about young staff members? Private health insurance won’t have the same lure; they’re healthy and fit, and less likely to have their own family about whose health they would worry.

Yes. And this brings us to a key point: if you want to make your employees happy, the first step is to observe their demographic. If you do that, you will understand their needs and wants

I see now. If you have an older workforce, decent pension contributions and private health insurance is probably a priority. For a younger workforce, they’d be more interested in things like a gym membership or a dental plan.

In this way, smaller companies can increase the worth of their employee benefits.

And this worth makes up for the reduced number of perks.

Bang on.

But what about a start-up, where money is particularly tight? I should imagine that for a very small company, group schemes aren’t that practical.

That’s right. In these cases, you may need to use some creative thinking. You could increase their salary a bit and ask them to arrange their own benefits. Or you may want to offer your employees specific benefits.

What do you mean by that?

Well, the first employee on the payroll will quite often come from a larger employer, and as such would have had more perks. Start-ups will be aware that the first few employees are the key ones, so they may want to consider what benefits are important to employees on an individual basis, while still bearing in mind budgetary restraints.

Until the employee size increases to the point where group schemes become more viable, I should imagine.

Exactly. I think you’ve got to grips with this now.

So, can I have my Ferrari please?

No!

How about a Tesla? I mean, it is tax-free.

I’m not listening to you anymore.

Disclaimer

We are but two fictitious characters throwing out ideas and comment to stimulate debate and collect information. As professional service firms, we are open-minded people and think independent thought and debate are essential to help us understand as well as navigate complex problems. By joves – doing business across Europe (and the world) is set to become a whole lot more complex in light of recent seismic political events. As businesses – we provide information and hopefully some wisdom – and we see this blog and its caricatures merely as a much more fun, perhaps slightly controversial, way of stimulating debate and collecting ideas. We’re searching for some true pearls of wisdom, and as we find them, we’ll share them with you.