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A flexible approach to benefits is gaining in popularity for two main reasons. Firstly, businesses need to recognise the diversity of their employees and adopt an individualised approach to meet the needs of their workforce. Secondly, flexible benefits are essential to remain competitive and crucial for recruitment and retention.
When a business adopts this style of benefits package, they must ensure that their workforce fully understand the advantages and financial implications of all the benefits available to them. As always, communication and education are key.
Popular flexible benefits
The mix of people in your organisation will determine the flexible benefits you offer, but let’s look at some of the most popular benefits and explore in more detail the advantages to both the employee and employer.
Buying and selling annual leave. Every company will have a policy which states the minimum annual leave an employee must take every year. As long as this policy is adhered to, an employee can sell back any days they won’t be needing or buy some more under this scheme – whichever suits their needs.
Benefits to employer: The buying of extra holidays will reduce the salary bill and in turn reduce their NI contributions.
Benefits to employee: The scheme provides extra cash if the employee does not plan on using all of their holiday entitlement that year. And for individuals who want to buy extra days, their net pay won’t be impacted.
Cycle to work schemes. We all know the benefits of cycling for our health so why not cycle to work. To encourage this healthy lifestyle a business must look to install changing rooms – preferably with a shower! If not, then your HR department may be receiving some complaint calls.
Benefits to employer: There are both tangible and intangible benefits for this scheme. When an employer provides access to a bicycle loan scheme, including bike accessories, they will see a reduction in their NI contributions and a reduction in the need for car park spaces. A healthy workforce will result in greater productivity and adopting a firm position on an environmental issue will boost the brand’s reputation too.
Benefits to employee: They will receive savings on items they may not have been able to afford themselves and they’ll feel fitter.
Pension contributions. Many companies are able to offer their employees an option to make contributions to top up their pension on a salary sacrifice basis.
Benefits: Salary sacrifice can reduce income tax and NI contributions for both employers and employees.
Gym membership. It’s a great idea to secure a corporate discount for your employees. It not only boosts health but will boost morale and productivity too.
Benefits to employer: In addition to a reduction in NI contributions, a healthier workforce will result in less absenteeism and an increase in staff retention.
Benefits to employee: It reduces the cost of a ‘regular’ gym membership, and as it is through salary-sacrifice the employee will save on NI contributions too. All in all, employees who take up this benefit will get fit, feel happier and be more productive.
Health screening. This promotes wellbeing and empowers your employees to take control of their future health.
Benefits to employer: Above all else, this supports the health of a workforce and has a positive impact not just for the employee, but for their friends and family too. Treatment for issues found early will reduce time taken off work.
Benefits to employee: The cost of screening will be reduced, and early detection of a health issue is invaluable.
Empower your employees
Every one of your employees is unique and this should be reflected in their flexible benefits package. And never under-estimate the power of choice – choosing your own benefits is a benefit in itself.
How we can help you
If you’d like to discuss any of the issues detailed in this blog, get in touch with us today. We’re here to help.
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