Why Employee Benefits are Crucial for Employee Retention

Attracting and retaining the right staff can be one of the biggest challenges for many businesses. For small to medium-sized businesses, it can be especially tough if your company competes directly with bigger, better-resourced companies.

A strong Employee Benefits package could make your staff feel significantly more valued, without the costs being prohibitive. This could result in better staff morale and productivity as well as lower staff turnover.

Losing staff and hiring replacements can come with many hidden costs, not to mention delays and added demands on your existing staff to cover workload as well as being involved in recruiting and training new staff.

With the right benefits package, employees can be happier, healthier and more engaged in their roles. In this article, we’ll explore some of the more popular employee benefits and how they could help you compete in the job market.

What are the most common Employee Benefits for staff morale and retention?

In our experience the most popular and effective benefits for employees are:

• Private Medical Insurance – This provides private medical care for the employee and can be extended to family members. This can reduce the worry and waiting times for important medical treatments.
• Group Life Insurance – This provides a cash lump sum (usually a multiple of their salary) to your employee’s beneficiaries in the event of their death whilst an employee of your company.
• Critical Illness Insurance – This provides a lump sum in the event that an employee suffers a critical illness during their employment. Illnesses covered typically include cancer, heart attack and strokes among others.
• Income Protection – This protects your employees’ income if they should suffer long-term health issues, including mental health conditions and stress-related illnesses.
• Health Cash Plans & Dental Plans – These can provide some funding towards routine treatments such as dental care, optician appointments and glasses, physiotherapy and more.
• Employee Assistance Programs (EAP) – These provide valuable specialist services for counselling and support for a vast range of situations. Impartial & proactive guidance for all employees & immediate family to access
• Wellbeing & Reward Initiatives – These can help encourage your staff to take greater care of their physical and mental wellbeing. This may include the option to buy additional paid leave, up to a certain limit.

Your employee benefits package will typically be tailored to the specific needs and budget of your business and towards the benefits that you feel your employees would most value. It’s crucial that the process is simple too, to ensure that your employees get to use and value their benefits with as little effort on their part as possible.

Employers will typically have access to insurer portals and have the support of their broker to aide with policy administration and mid-term changes.  Employees have access to secure insurer Apps for personal management of their policies, tracking of claims & policy benefits information.  This makes your benefits scheme easier to administer and is usually very popular with employees as it helps with their understanding of their benefits and the options they have available.

Why your Employee Benefits are only part of the picture

It’s important to point out that any employee benefits you arrange are only a part of your overall proposition as an employer. It’s still important to ensure that pay, working conditions, paid time off and company culture among other things are aligned with what people want.

However, the right package of benefits can complement those existing benefits to make your employer proposition much more compelling. It can give staff the feeling of working for a bigger company and even help you attract key staff from larger competitors.

Do Employee Benefits really benefit businesses and their employees that much?

So far it sounds like a straightforward decision to invest in improved benefits for your staff if you can afford to do so. It’s only fair to ask though whether it really does benefit the company in the long run.

In 2021, research from the Association of British Insurers (ABI) demonstrated that health and wellbeing benefits have a significant positive effect on employee productivity, with 60% of SME businesses saying that they had a high impact on employee productivity.

The following year, People Management reported that a report by MetLife UK had revealed that roughly half of employees would be happy to sacrifice some of their pay for personalised benefits. This is a sign of how highly they value such benefits, with the report also saying that employees felt that they would work harder for a company that provided such benefits.

In 2023, People Management reported that a strong benefits package is especially important to younger workers between the ages of 18 and 34. In the coming years, this cohort will make up an even greater proportion of the workforce so it is important to acknowledge the needs of younger employees to help you plan for the future of your business.

So the evidence suggests that employees really do value employee benefits packages that go beyond the basics. So how do you ensure that you get the right benefits that make them feel valued, whilst also offering the flexibility to suit their specific circumstances?

Finding the right Employee Benefits for your business

The first step in the process is to consult with your employees to find the biggest challenges they have and what you might be able to do for them, realistically to make their lives easier. If you already have regular staff surveys or other internal communications you could use these to gather information on the benefits they’d like to have.

It’s almost certain that staff will vary based on their age, seniority, level of experience and their domestic and family circumstances. It can also be very beneficial to speak to employees with recent experience with other employers, including your competitors.

Once you have some clarity from your employees, you’re a step closer towards your goal. From here, you can develop an employee benefits scheme that delivers significant value to your employees and your business.

If you’d like to know more about Employee Benefits and the role they can play in helping you attract and retain the best staff for your business, call us on 01943 969 131 and ask for our dedicated Employee Benefits team lead by Marc Smith or contact us through the website. We’ll be happy to discuss your requirements and help you get started.