Employee benefits are not just for your workforce. Provide them well and the business gains too.  
Simply offering a top-notch salary to attract and retain staff is no longer enough. The employee benefits industry is growing rapidly and, with it, so are employees' expectations. A good benefits package is now a sign of status and is one the key to motivating a top-performing workforce. And it doesn't have to cost a lot - many benefits are low-cost or even cost-neutral for SMEs to implement. The key to making this work for you is to think of your own experience as an employee in the sector, and the likely age/life stage of your ideal candidates. Here's are 12 ideas for employee benefits people actually want.  
1. Healthcare 
While you cannot prevent employees from becoming ill, healthcare benefits can help them return to work more quickly, reducing absence costs and boosting productivity. These benefits are a valuable recruitment and retention tool, which will increase staff loyalty and earn your business a caring reputation. 
Private Medical Insurance (PMI) 
Helps with the costs of private treatment and enables staff to jump hospital waiting lists. Most policies do not cover HIV/AIDS and pre-existing medical conditions. PMI is also perceived to be the most expensive healthcare benefit. Expect to pay about £700 per person per year. 
Income Protection (IP) 
Pays an ongoing monthly income to employees that become physically unable to work. You should expect to pay somewhere between 1.25% and 1.5% of payroll. If an employee uses IP, the cost will rise because you are legally obliged to continue paying for all their benefits plus National Insurance (NI) and any pension contributions. 
Critical Illness Cover 
Pays employees a single tax-free lump sum should they suffer permanent disability or a serious illness. Most schemes cover a core list of approved conditions, which can be extended for a further charge. Premiums are based on age, gender, health, family history and occupation. Schemes no longer cover non-invasive skin cancer, or less advanced cases of prostate cancer. Once the payment has been made employees are removed from the payroll, making them less of a long-term liability. 
Healthcare Cash Plan 
Provides tax-free contributions towards the cost of everyday treatments such as prescriptions, dental and sight tests and options for Employee Assistance Programs, often online, for mental health support. Prices start from £1 per person per week, which is often passed on to employees. Only helps to fund, not provide, treatment. 
2. Pensions 
Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension and pay into it. This is called 'automatic enrolment'. The Pensions Regulator is responsible for ensuring that all employers comply with workplace pension law. More details here: https://www.thepensionsregulator.gov.uk/en/employers/setting-up-a-business-what-to-do-for-automatic-enrolment 
However, businesses that offer an enhanced pension scheme also score highly in the recruitment and retention stakes. Understanding pensions can be tricky but advice is available from pension consultants and bodies such as the Pensions Regulator or the Pensions Management Institute. There are four main types of scheme: 
Final Salary Schemes 
These pay employees a pension based on a percentage of their final salary. This is calculated using their basic salary (excluding commission, bonuses, or benefits) and depends on their length of service. The most attractive type of scheme to employees, but few businesses are now establishing fresh plans – many are now scaling back their schemes due to lower life expectancy, low inflation and falling stock markets. Your business takes the financial risk, and you will need to provide additional funding if a deficit occurs. 
Money Purchase Schemes 
Money is paid into a fund which is invested on an employee's behalf. Whatever is in the fund when they retire is used to buy an annuity which provides a regular income for life. Part of the fund can be taken as a tax-free lump sum. Employer contributions are fixed. Members take the financial risk if stock markets and other investments do not perform. 
Stakeholder Schemes 
A list of stakeholder providers can be found at the Pensions Regulator website. Employees who join the scheme must be offered a payroll deduction facility to enable them to make contributions, and employers must maintain an accurate record of all employee payments and deductions. 
Group Personal Pension Scheme (GPP) 
A cluster of individual pensions, which are built up by each member. You must collect their contributions through your payroll system and pass them onto the pension provider. The employer is not required to make any kind of contribution; however, if you want to use the GPP instead of a stakeholder scheme, you must make minimum contributions of 3% per staff member. The scheme provider is responsible for administering the programme, not the employer; however, the employer may face charges if employees stop making contributions. This sort of scheme is typically offered by newer businesses with no previous scheme history. 
3. Cash Bonuses 
Some employees will always be motivated by money, particularly those in strongly performance-driven environments, such as sales. Cash bonuses can be awarded as a one-off payment when staff motivation needs a boost or linked to performance targets and paid on a more regular basis. If you can't offer the same pay package as your larger competitors, one of the things you could do is offer a fairly low basic salary but a really good bonus scheme because you won't have to pay the bonuses unless staff bring the money in. 
4. Holidays 
You must provide all employees with a minimum of 28 days' paid holiday a year, although this can include bank holidays. Many businesses offer above this to differentiate themselves from competitors. And linking holiday entitlement with length of service provides staff with an incentive to stay. Another idea is offering your birthday off as an extra day’s leave. Some companies take this much further – unlimited leave is now becoming a more common occurrence, particularly in the tech sector. 
5. Parental Leave 
Under UK employment law, parental leave is unpaid, but your employees are entitled to 18 weeks’ leave for each child and adopted child, up to their 18th birthday. The limit on how much parental leave each parent can take in a year is 4 weeks for each child. Parents can split the leave which was previously reserved exclusively for the mother. Many companies choose to be more generous with “Family Friendly” policies and enhanced leave, particularly if they have many key workers that they wish to retain. 
6. Flexible Benefits 
Flexible benefits, or Flex, programmes allow individual employers to create a tailored package of benefits for their business, including everything from childcare vouchers and additional holidays to company cars and free mobile phones. It is estimated that more than 500 UK companies now offer Flex programmes. Under the typical terms of a Flex scheme, employees must agree to surrender a portion of their salary in return for the benefits they choose, and most employers give their staff a self-service menu of options to choose from, deducting money for each benefit from their overall salary.  
7. Voluntary Benefits 
Voluntary benefits schemes also offer employees flexibility. These are a range of discounted products or services that you make available to staff, but which they purchase themselves. These can include optical, medical, and dental cash plans, childcare vouchers and leisure services such as gym membership. Companies such as Edenred and Benefex offer benefit management schemes which enable employers to select the benefits they want to offer their staff, and create a system for payroll deductions if they wish. Such firms typically have contacts with hundreds of retailers, so can provide a conduit to companies which can provide the perks and discounts you are after. 
8. Statutory Redundancy Payments 
After two years' continuous service all employees are eligible for a redundancy payment if you eliminate their position. The amount is based on employees' length of service: those aged between 18 and 21 will receive half a week's pay for every year of continuous service, staff between 22 and 40 will receive a week's salary for every year, while those aged 41 and over can expect a week and a half's pay for each year, they have worked for you. However, the weekly entitlement is capped at £400 if you do not want to pay the full amount. The first £30,000 of these payments will not be taxed. 
9. Creative Schemes 
To ensure you get the most from your benefits package, it is vital it appeals to your employees. There is little point investing a great deal of time and money in a scheme if staff do not to use it. So a little creativity can go a long way. Consider what your employees are most likely to value. Beers on a Friday, half a day's leave to accompany a grandchild on their first day at school.... Those sorts of policies are starting to differentiate the better employers. 
10. Tax-Relief Benefits 
For tax purposes, the above options are all treated as benefits in kind and are taxed as employment income. But there are exceptions. Tax relief is available on travel season ticket loans up to £5,000; £150 worth of pensions-related financial advice; staff parties and annual celebrations up to a limit of £150 per employee; corporate gifts up to the value of £250 and long service awards up to the value of £50. 
Before implementing any of these schemes, however, you want to ensure the terms of the arrangement are carefully drafted. This should clearly set out who pays for what and what will happen if staff leave your employment or abuse the benefit. 
11. Cycle to Work Scheme 
This scheme enables employers to lease a bicycle to employees, usually for an 18-month period. The employee can then purchase the bicycle for a fair market payment at the end of the scheme. The initiative saves employees up to 40% in income tax, 11% on NI contributions, and employers can avoid VAT by claiming in the normal way. For more information, please visit Cyclescheme – this contains all the relevant information you need on the scheme and offers links to more than 1,800 bike retailers and distributors. 
12. Childcare Provision 
You can provide employees with £55 of childcare vouchers or employer-contracted childcare per week, tax, and NI free. Further information on the voucher scheme is available from the Employers for Childcare website. 
With this number of options on offer deciding what to offer is not always easy. 
There is not really any limit to what you can put into a benefits package, but you have to make it fit with your business strategy. If you put too many products into a scheme, it dilutes it slightly.  
But get the mix right and you will benefit just as much as your employees.  
If you would like more information on reviewing benefits, creating a postive company culture, say hello@humberhrpeople.co.uk today or join in with our next event, register: here 
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