Employee retention remains a business priority as we step into a new year. Our research found that almost half of UK employees say they’re likely to look for a new role in 2024. Financial wellbeing benefits and incentives were at the top of the list of ways to persuade them to stay. Budgets are tight, and HR managers are trying to do more with less. That’s why SmartPay, our cost-neutral salary deduction scheme, is the employee benefit your people and business need in 2024. Read on to discover why.
45% of Brits made their personal finances part of their resolutions for 2024 (Workplace Wellbeing Professional).
Financial, physical, and mental wellbeing are intrinsically linked, impacting the overall state of our health. It’s hardly surprising that financial health is a 2024 priority for so many in the UK. It’s a top priority for employers, too, and 50% plan to increase spending on financial wellbeing benefits instead of offering pay rises over the next two years.
Why are so many businesses considering offering salary-stretching employee benefits over pay increases?
Affordability.
The average salary increase in 2023 was 4.2%, and experts predict it will drop only slightly to 4.1% in 2024. A 4.1% pay rise across an entire business could add millions to an organisation’s annual pay bill.
Employee benefits are a sustainable alternative or addition - especially when they’re cost-neutral.
An employee benefits package that enhances financial wellbeing is an affordable way to offer impactful support and can have the same impact on your employees as an increase in pay!
Affordability… we’ve mentioned it a few times already. Why? Because that one-word links to multiple elements of employee wellbeing, spanning beyond financial health:
Our finances can cause anxiety…
- The cost-of-living crisis has made it harder to afford essential items.
- 42% of Brits cancelled their gym membership during the peak of the crisis (YouGov).
- Holidays boost our mental and physical health, but they can be expensive.
- Household items… we need them, but affording to replace them can be a challenge.
- Household repairs and enhancements, whether essential or an upgrade, cost money.
- Hobbies boost social, mental, physical and emotional wellbeing, but affording the kit needed has led to 34% of Brits quitting theirs (YouGov).
Employers and businesses are also facing affordability issues…
- The cost of recruiting new skills.
- The impact of the National Living Wage increase.
- Offering financial employee benefits that support wellbeing.
- Increasing cost of doing business.
- Building an EVP that attracts and retains talent.
64% of employers consider the cost of recruiting fresh skills to be a considerable financial risk over the next two years.
When affording the employee benefits needed to retain your talent becomes challenging, but you can’t afford to lose and recruit essential skills, cost-neutral employee benefits form part of the solution.
Salary deduct schemes… cost-neutral employee benefits
A quick note on salary deduction schemes…
Salary sacrifice and salary deduct are often interchanged. For clarity, this is how they differ:
- Salary sacrifice = any benefit paid from your salary at a gross level (before tax and NIC calculations).
- Salary deduct = any benefit paid from your salary at a net level (after tax and NIC calculations).
SmartPay falls under a salary deduct scheme as there are no tax or NIC savings for employers or employees. SmartPay significantly impacts employee financial wellbeing by helping your people afford the essential and lifestyle-boosting products they need by spreading the upfront cost of purchases - repaid to their employees via salary deductions.
What are cost-neutral employee benefits?
Any benefit that doesn’t have a per-person cost or set-up fee is cost-neutral, as there is no cost to the business to embed the employee benefit.
What makes SmartPay cost-neutral?
SmartPay ticks the box for cost-neutral because it’s free* to add to your employee benefits offering. There’s no buy-in or set-up fee at the point of the contract. Your business only spends on the SmartPay applications your employees submit.
The four steps to helping your employees afford more of what matters with SmartPay!
SmartPay Salary Deduct Scheme… making life more affordable
The 2024 landscape will be challenging. The cost of living remains high, the National Minimum Wage is increasing, and financial benefits and incentives are essential to retain your employees.
Employees expect more, and employers must do more with less!
We’re focusing on our SmartPay salary deduction scheme, but salary sacrifice schemes also form part of the narrative. Discover what role they play in making employee benefits cost-neutral here.
How can a salary deduct scheme like SmartPay enhance employee wellbeing?
SmartPay reduces financial anxiety by making high-cost purchases with retailers, including Currys, Wickes, John Lewis, Argos, Decathlon, Ikea, and B&Q, affordable for your employees.
- The extensive list of retailers we partner with makes home improvements affordable.
- Broken washing machine, slow laptop, the latest fitness tech… these essential and lifestyle-enhancing purchases are more affordable when employees can spread the cost via salary deductions.
- Make hobbies and fitness-boosting activities affordable again.
How can a cost-neutral employee benefit like SmartPay alleviate affordability concerns within your business?
Financial benefits that help make life more joyful for your people will reduce employee turnover, lowering recruitment costs.
When external factors - like the National Living Wage increase - impact your business’s profitability, SmartPay is a sustainable solution. The only money your business spends on SmartPay is on the applications you approve, and you recoup that expense through salary deductions.
Cost-neutral employee benefits free up funds that you can spend on other wellbeing or business initiatives.
It’s not about offering employees the most benefits that sets you apart. It’s providing the benefits that enhance employee wellbeing and experience helps attract new skills, and speeds up recruitment.
More affordability with SmartPay… More control with Pluxee UK
SmartPay is a salary deduct solution that’s affordable for your business and your people.
What about the upfront expense to the company?
SmartPay is cost-neutral to your business and free* to embed, but you do need to cover the cost of the vouchers your employees receive as part of their application. That’s why we help you remain in control!
When you enrol your business into our SmartPay salary deduction scheme, your account manager will hand you the reins after establishing your terms. You’re in control with SmartPay since you can…
- Decide the repayment schedule over 12, 18, 24, or 36 months.
- Set specific application dates or allow employees to apply all year round.
- Offer SmartPay to employees paid weekly and monthly.
- Set a minimum application value, starting from £100.
- Set a maximum application limit per employee, ensuring your business can afford the initial voucher purchase.
SmartPay is the smart way to pay and the cost-neutral salary deduction solution your people and business need in 2024. Arrange a call today to open up a world of opportunities with SmartPay.
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Notes:
*Terms and conditions apply.
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