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Can employee benefits counteract the pressure of low wages?


Posted on: Wednesday March 31, 2021

From 1 April 2021, the National Living Wage (NLW) will rise by 2.2%. And for the first time, it will apply to employees aged 23 and over.

Employee benefits are a popular way for employers to top up their offer for employees on the National Living Wage. But is your benefits package doing enough to help recruit, retain and motivate your staff?

Curating a deal that suits your workforce is a vital part of making yourself attractive as an employer, especially in industries with high turnover. So read on for six key considerations.

1. What do our people want?

There’s no hard and fast answer – it depends on the needs of your organisation and its employees. Get out there and ask them! People may want traditional benefits, such as life cover and a pension, or they may prefer to save money immediately with retail employee discounts or hospital cash plans.

Discounts on the organisation’s goods or services are a relatively common perk, especially in the retail sector, and can help to boost staff engagement with their employer, as well as helping to increase their familiarity with its products.

2. Value for money

Salary is the most important thing for people at the lowest end, but it is also important to focus on the value of group benefits. If you pay people an extra 10p an hour, what they can buy with that 10p is probably a lot less than what you could provide collectively via an employer negotiated discount.

3. Sick pay

Offering sick pay should be a priority if you can afford it. However, some companies face a dilemma: they want to keep workers safe and productive, but a limited benefits budget means they are unable to provide cover for ill health. For these employers, the best solution may be to partner with an insurer who can provide workers with easy access to cost-effective, individual policies. Employees also value the chance to safeguard themselves from the impact of ill health on their earnings.

4. Salary sacrifice

Benefits offered through a salary sacrifice arrangement, like holiday exchange or cycle to work schemes, are tax-efficient for the employer. However, where employees earn on or near the NLW, you need to be careful – it must not bring the employee’s hourly wage below the minimum wage level.

5. Flexible work

Not all perks will come at a cost to an organisation or its employees. Flexible working arrangements can be a significant benefit, especially for those with family commitments. This type of arrangement can work particularly well for organisations that operate shift patterns, as employees can flex their hours as needed.

6. Use it or lose it

If you’ve gone to the trouble of putting in benefits, you don’t want employees to make the wrong choices. You can deliver advice and information online in a cost-effective way and this will help to maximise the value of your package.

You also don’t want employees to miss out because they don’t know what’s on offer. Employee communication is key. You can enhance the value of your benefits package by matching it to your internal brand and marketing it to employees face-to-face to increase take-up rates.

Personal Group are experts in helping you stand out as an employer of choice. Talk to us about creating a winning benefits offer by emailing or call on 01908 605000.


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