Employee benefits are an important aspect of any job, but can be overlooked when thinking about changing roles. Depending on those on offer, benefits can be just as valuable as a pay rise, and in some cases, even more valuable.
It is quite natural for us to focus on salary. After all, we all need to make a living. However, benefits are an important aspect of any offering from an organisation, as good benefits can provide security, flexibility, and peace of mind, contributing to a more positive work experience overall.
So what constitutes a good employee benefits package?
Employee benefits are defined as ‘non-salary compensation provided to employees in addition to their salary or hourly pay’. These benefits may include private medical insurance, pension contributions, childcare vouchers, a car scheme, and other perks such as discounts on gym memberships, travel, or education. While these benefits may not show up in an employee’s payslip, they can add significant value to their overall compensation package.
Good benefits packages demonstrate that an organisation values its employees and is committed to providing them with a secure, comfortable, and fulfilling work environment. This can lead to higher job satisfaction, engagement, and productivity. In addition, valued benefits can provide employees with a sense of security, which is particularly important in uncertain economic times. Benefits such as life insurance or disability insurance can provide financial support to employees and their families in the event of unforeseen circumstances.
One of the most significant advantages of this type of employee benefit is that they are often tax-free. For example, deductions for childcare vouchers or for a salary sacrifice car arrangement are made from pre-tax salary, which means that the money is not subject to income tax and national insurance. As these benefits are fixed-cost, in that the amount the employee sacrifices for them is the same every month, they can also be handy for budgeting purposes. This is particularly true for some car schemes, which are an inclusive motoring package, so there are not any car-related financial surprises on the scheme.
Certain benefits can be more valuable than a pay rise in the long run. For example, a pension plan that matches (or more than matches if they are lucky) an employee’s contributions can help people save for retirement, which can be worth far more than a few extra pounds in their salary each month.
Benefits such as flexible work arrangements, including remote working or flexible hours, can help employees achieve a better work-life balance without a cost for the employer. This can be particularly important for employees with caregiving responsibilities or other commitments outside of work. Additionally, offering enhanced annual leave and paid sick days, allows employees to take the time they need to recharge and recover without the added stress of lost income.
Other benefits, such as mental health programmes or wellness programmes can contribute to employees’ overall wellbeing, which means employees are more likely to value their employer. Mental health programmes can provide support for employees dealing with stress, anxiety, or depression, while wellness programmes, such as yoga classes or meditation sessions, can help promote physical and mental wellbeing. Additionally, some employers offer benefits such as financial planning or legal assistance, which can help employees feel more secure and less stressed.
Good employers realise that employee benefits are an essential component of compensation that should not be overlooked. Good benefits can provide significant value to employees and can be more valuable than a pay raise in the long run as they are a considerable part of the employee’s package.
Paul Gilshan is chief executive officer at Tusker