What are the best employee benefits?

How do you solve a problem like employee retention? Offering competitive compensation is no longer enough to attract and retain talent, as employee benefits are rising quickly, and with them, employee expectations.

Today, a competitive package of the best employee benefits has become a status symbol in businesses and is critical to building a happy, high-performing team.

In this post, we'll be looking at the best employee benefits workers today are demanding - as well as how much they might end up costing.

What are employee benefits?

First, a quick definition. Employee benefits are additional incentives from employees, offered in addition to a worker's regular compensation or earnings. They are intended to aid in employee happiness and well-being and may range from dental care plans and pension plans to flexible work hours and family leave assistance programs. 

According to Willis Towers Watson, 75% of workers are more inclined to remain with their firm due to their benefits package. Considering that just 41% of UK employees are pleased with their benefits, this area might be improved significantly.

Ok now we know a bit more about what employee benefits are and why they're valuable, let's take a look at the best employee benefits in 2022.

Only 41% of UK employees are pleased with their benefits.

Our 7 best employee benefits

1. Private healthcare

With the NHS under growing pressure, providing employees with private health insurance is a certain crowd-pleaser. Through a private healthcare plan, employees will gain access to high-quality healthcare services for various diseases and ailments, including mental health and physical disorders. Furthermore, there are reduced wait times for treatment and more accessible hours in general.

Group health insurance packages typically cost between £250 and £1,000 per employee each year. Numerous factors will influence the cost of premiums, including:

• size of the group
• average age
• what is included

2. Flexible working

Employers and employees alike need a healthy work-life balance. Moving away from a typical 9-to-5 work schedule that determines an employee's locations and toward a more current work paradigm that increases employee happiness and productivity is perfect in today's working market. Some individuals will even accept a lower-paying job in return for more freedom.

There has been a noticeable trend away from standard 9-5 work hours toward a more flexible schedule. Currently, thanks to remote system access and conference call capabilities, employers may now work from almost anywhere.

Employees might only provide a quota for working from home, which is usually up to £30 per employee. This might seem like an insignificant expense, as recent data indicates that working flexibly and remotely can save you up to £10,000 per employee.

There are various advantages to implementing flexible working methods, ranging from greater productivity to giving you an edge over the competition when recruiting.

3. Workplace pension

One of the paramount employee benefits is represented by a great pension with good employer contributions, which guarantees a stable future in the latter life of the employee.

Workplace pensions are a statutorily required benefit in the United Kingdom, as employers are obligated to offer a certain level of pension coverage to their workers via pension auto-enrolment. Nonetheless, pensions are seen as a critical benefit in the UK, with many companies contributing substantially more than the statutory minimum.

For the majority of persons, the minimum total contribution amount required under automatic enrolment is 8% of qualified wages. Employers must contribute at least 3% of this amount in most situations, with the remainder paid by employees from their after-tax salary. Firms may provide contribution matching, meaning they will match an employee's contribution up to a certain amount.

Employers may contribute up to the current annual allocation of £40,000. If the employee is allowed to use 'carry forward,' the amount might be considerably higher. In rare instances, up to £160,000.

Overall, choosing the best pension provider is paramount to maximising the benefits for employees. While seemingly expensive, it also comes with a range of attractive tax benefits - helping to lower company National Insurance contributions and help your workers keep more of what they earn.

The Penfold workplace pension is a cutting-edge, award-winning auto enrolment scheme designed to make running your company's pension, painless. To find out more about how we can help offer a better pension that your team will love, get in touch today.

4. Holiday allowance

Every employee who works a five-day week is legally entitled to at least 28 days of paid annual leave every year. This would mean 5.6 weeks of vacation (statutory leave entitlement or annual leave).

To get the average hourly rate, you just add up the hours worked by the worker and the remuneration associated with those hours.

Nevertheless, firms in the United Kingdom choose to provide their workers with more than the statutory minimum vacation and provide the option to 'purchase' additional days via their flexible benefits scheme. Not only is this an effective way to combat burnout, but also serves as a very attractive way to stand apart from your competitors.

5. Sick leave

Businesses are required by law to give a minimum amount of Statutory Sick Pay. However, most employers voluntarily supplement this minimal benefit by adding contractual sick pay benefits.

One popular practice in this area is paying sick pay (for example, two to four weeks) at full salary and subsequently lower payments. Certain industries are quite generous, while others do not give any additional sick pay.

Today CEO illustrated the typical expense of sickness absence. In 2016, the illness absence rate was 2.2 % for businesses with 25-49 workers. This equates to a loss of 2.2% of all working hours each year.

There are 1,740 working hours in a regular year, excluding vacations, of which 38.28 are lost per employee at this 2.2% rate. These sick days would cost a firm with 49 workers a total of £26,972 based on the average hourly rate of £14.38 — almost the whole of the typical UK employee's income.

6. Life insurance

In our pandemic-aware era, relatively young individuals are more concerned about what will happen to their loved ones if they die early. For most, accumulating enough money to create a safety net is impractical, and personal life insurance plans may be prohibitively costly and limited, decreasing their attractiveness.

However, the opportunity to get high-quality life insurance that they would not be able to obtain is an inducement that may attract the greatest individuals. Over 20% of employees now see life insurance as a more critical benefit than before the outbreak.

Each firm and group of workers is unique, with unique demands and priorities. Calculating premiums is consequently a lengthy procedure that takes into consideration a variety of criteria, including the following:

• age of employees
• employee income
• industry/sector

93% of workers believe that well-designed employee training programmes boost their engagement.

7. Learning and development

Employees must upgrade their abilities in today's rapidly changing world, especially since most talents are transferrable. It is a win-win scenario for all parties, as the employer benefits from a more well-rounded team member. 93% of workers believe that well-designed employee training programs boost their level of engagement.

Nonetheless, employees can go beyond the work environment and provide sponsorship for extensive degrees, such as MBAs, that may cost up to £65,000 in the UK.

Of course, there are also a number of cheaper alternatives, like Udemy or SkillShare that let you access a hand-picked roster of skill courses for a much better price.

Uncovering employee benefits

As staffing requirements rise, their personal requirements also increase. This compels companies to explore employee benefits that are compatible with the dynamic work culture. Therefore, enhancing the quality of employee benefits is in everyone's best interest in this scenario, and a better pension scheme like Penfold might unlock unprecedented opportunities for your enterprise and workers.

Request more information today to discover how we can transform your company pension. Or find out more about Penfold's award-winning workplace pension.