Sleeping pods, treadmill desks and indoor ball pits are just some of the ways that big companies keep their employees engaged and help maintain a positive atmosphere. If unlike Google your office or budget doesn’t allow for an indoor slide, looking for a cost effective and innovative way to boost employee morale may seem tricky. We recently conducted a survey that showed that 75% of employers agreed that being able to offer a varied range of benefits helps to attract and retain top talent.
Hiring and firing employees can be far more expensive than maintaining employee morale, worker satisfaction and keeping retention rates high; so it’s important that employers take time to understand which types of benefits are the most attractive to their employees.
These days most of us work with technology all day every day, relying on gadgets to complete our daily chores. Salary sacrifice schemes allow employers to offer staff access to such items, including smart phones, tablets or even top of the range bikes at discounted rates. Being able to offer employees the chance to make considerable savings on the latest must have technology, is now an enticing proposal for many, especially when the cost to the employer, however large or small, is minimal and in some cases can even make them money for example bikes, childcare vouchers and phone schemes can all generate national insurance savings.
Clearly salary sacrifice schemes are growing in popularity, driven by ever increasing expectations from employees as well as the countless choices of providers available, many companies see these schemes as an easy way to boost existing benefits portfolios and stay ahead of the game. However there is still quite a bit of misinterpretation surrounding salary sacrifice schemes: from what they actually mean; how they work; and most importantly how much they cost the employer. To help clear up the misconceptions, here are the top three most common myths debunked.
1. Salary sacrifice is a confusing term. True. Sacrifice is a poor choice of words, as many automatically presume that to take part in a scheme you must sacrifice a large sum of your salary all at once. In reality employees are simply paying a small contribution every month to pay off the cost of the latest gadget or the newest bike. Since the repayment happens before tax is taken, employees actually gain by paying less tax and save from buying at a discounted rate. It’s not really a sacrifice when you gain and save!
2. Salary sacrifice schemes are complex to administer. False. Compared with many of our European counterparts, who have simplified the process of benefit provision by not taking money directly from people’s salaries, the UK’s approach can be seen as a little complex. In reality most salary sacrifice schemes should be fully administered by the provider. The employer should have access to some kind of simple administrative online portal for managing approvals of purchases, yet the rest of the administration should sit with the provider. As well as helping to overcome any fear surrounding the burden of administration, which can put many employers off, a trusted provider should also be able to help train employees on how to access the benefits and provide guidance on using the benefits as a way to support staff retention.
3. Salary sacrifice costs businesses money. False. With the administration of the scheme managed by the benefits provider, employers can sit back and enjoy their own NI contribution savings, with many schemes saving employers up to 13.8% from every purchase their employees make.
These days being able to understand what employees want and expect from their benefits packages can give your company the upper hand. And while benefits can come in many forms, it’s important to know that if your budget doesn’t match the likes of Google and Pixar, being able to offer your employees what they want doesn’t have to cost the earth, in fact you can actually save your business money.
