Nearly two-thirds (63%) of small and mid-sized enterprise (SME) owners are concerned their staff face a benefits gap in comparison with the workforces of larger employers, according to a study commissioned by MetLife UK.
The research, carried out by Opinium in March 2018 among 508 decision-makers at organisations employing between 50 and 299 staff, found that 69% of senior managers believe they have a duty to provide benefits beyond pensions. However, one in 10 (10%) of respondents said they are unable to do so.
Adrian Matthews, employee benefits director at MetLife UK, said: “SMEs are very much focused on retaining and recruiting staff and recognise the significant role that benefits in addition to salaries can play. It is interesting they believe they have a duty to offer staff more.
“The issue of the protection gap between SME staff and employees at larger corporates is, however, a concern for substantial numbers of senior managers who see the life insurance and income protection that major employers offer and wonder how they can compete.”
Lack of budget was the biggest reason cited by respondents for not providing benefits beyond pensions (58%), followed by the organisation not being big enough (15%).
“Budget is clearly a perceived issue for SMEs, but in reality the costs are much more affordable than they think,” Matthews said. “Group life can cost as little as 0.3% of payroll and group income protection 0.5%.”
Some 39% of SMEs surveyed provided employer pension contributions higher than the statutory minimum. Extended maternity and paternity leave was offered by 28%, and the same percentage provided employee assistance programmes (EAPs).
Life insurance, health-related benefits such as gym membership, and eye care were the next most popular benefits offered by SMEs, each being provided by 23% of respondents, followed by financial wellbeing initiatives such as employee loans (22%) and critical illness support (18%).
Season ticket loans and dental cover were provided by 17% of respondents and disability/income protection by 15%.