By Robert Stewart, Corporate Consultant at Chase de Vere
With UK unemployment at its lowest since the 1970’s, employees can become increasingly choosy about who they work for. So the task of retaining quality staff is becoming a crucial issue.
Recent research by XpertHR into 288 organisations showed that 15.5% of employees resigned from their jobs in 2016, continuing a steady increase that has been in evidence since 2012 – when the resignation rate stood at 10.6%.
A general rule of thumb often quoted in business is that when someone leaves it tends to cost around a year of their salary in lost output and in recruiting and training a suitable replacement. This means that new recruits who last only a short time can prove especially expensive, so the fact that the XpertHR research shows that 10% of staff that had recently joined organisations resigned within the first year is of particular concern.
Forward thinking employers are highly aware that employees are motivated by far more than merely the size of their monthly pay cheque, and the importance of a good employee benefits package in helping with the retention challenge should never be underestimated. Indeed, research has consistently shown that around two thirds of employees say they are more likely to stay with an organisation that offers one.
Furthermore, the definition of what constitutes a good benefits package has been changing rapidly. A few years ago a business owner might have regarded themselves as being enlightened and progressive simply because they offered their workforce a group pension scheme and death in service benefits.
But the advent of auto-enrolment has meant that offering a pension scheme has become compulsory. Employers have also increasingly cottoned onto the fact that group death in service schemes can have a high perceived value for a relatively modest outlay and, according to Chase de Vere’s own benchmarking research, 58.3% of retail and wholesale organisations already offer one.
So we are seeing a notable increase in clients who are now willing to consider new ways of attracting and retaining staff. These do not have to involve any massive outlay on the part of the employer and can be tailored to suit a particular organisation’s needs.
Interestingly, the most marked rise in interest from employers that we are experiencing has been towards employee discount schemes. This is because they realise that virtually every employee wants to spend money in the High Street and that schemes can be set up very inexpensively. Even for SMEs they can cost only a few pounds a year per employee.
Flexible benefits schemes are also proving a popular way of enabling health-conscious employees to purchase voluntary benefits like critical illness cover, health cash plans and dental insurance at more attractive rates than can be obtained via the individual market. Additionally, the fact that employees know that their employer has identified and vetted a suitable provider offers them important reassurance.
Childcare vouchers and Cycle to Work schemes are also being increasingly valued for their ability to offer NI savings to employers in addition to attractive benefits for employees, and there is a growing realisation that group income protection schemes provide employers with a great deal more than just their core insurance function – which pays a regular income when employees are unable to work as a result of illness and injury.
Most good group income protection schemes now offer free Employee Assistance Programmes (EAPs) and early intervention and rehabilitation services that can help the bottom line by combating absenteeism and presenteeism. These added-value services are automatically included even on low-cost schemes that pay out for only two to five years – as opposed to right up until the employee’s intended retirement date – and can cost as little as 0.25% of payroll.
If employers are unsure exactly what employee benefits they should be offering their workforces then a good way to start is to benchmark their business against their competitors. Chase de Vere has conducted extensive employee research across a number of sectors to enable us to undertake a highly effective benchmarking exercise.
If you would like to find out more about benchmarking your employee benefits package or the options available to improve your package, please don’t hesitate to contact Chase de Vere on 0161 848 3367.