But a benefits programme that is not effective or well optimised for the business offers the reverse of these - and can instead constitute a risk.
If your business offers staff a benefits package, evaluating whether it constitutes an asset or a potential liability to your business should be a priority.
We explain why - and how it can be efficiently assessed - below.
Visit our Employee Benefits page to find out more about how Clear can help your business.
Employee benefits as risk management
Employee benefits programmes are perhaps most usefully considered as a method of managing the risk associated with staff - a risk every business carries - and the commensurate risk associated with falling short of targets as a result of staff turnover, low productivity, or other human resources issues.
To fill this risk management role effectively, your employee benefits must be selected with care to fit the particular needs of your business’s workforce. Not doing so can render a benefits package ineffective - or, at worst, a potential liability.
How to evaluate your employee benefits package
Among the many areas that should be considered when assessing your business’s benefits package, there are three key issues:
- The suitability of the offering for your particular workforce
- The cost to the business of providing the benefits
- The potential financial risks of the benefits to the business
Each of these areas and more is covered in a Gap Analysis - an undertaking we recommend every business owner or HR director currently supplying a benefits package to their staff considers undertaking (more on this below).
Of critical and immediate importance to many businesses who undertake Gap Analyses are points 1 and 3 - i.e., are the benefits helping to deliver a happier workforce and therefore smoothing the path to achieving the business’s overarching goals? Or is there a possibility that they are ineffective in doing so, or even represent a potential barrier?
An example: Death In Service
Death In Service, a commonly offered benefit, exemplifies the importance of undertaking a Gap Analysis evaluation of your benefits. It can be a significant asset - but only when deployed in the correct circumstances.
An example of the correct circumstances may be a business with a predominantly middle-aged workforce. They are likely to have dependents, and to perhaps be more concerned about developing significant health issues in the future.
They may find significant value in a Death In Service provision as a result, and the business may commensurately see an appreciable difference in their satisfaction, and/or the business’s attractiveness to new members of staff in this demographic. Although Death In Service provision will not be at its cheapest when supplied to a workforce in this age group, the cost may be well be justified to the business by this clear return on investment.
But Death In Service will not be right for every business.
Those with a younger workforce may find the cost of Death In Service very reasonable, due to the insurer’s evaluation that the risk of a claim is relatively low, and it may be attractive to the employer or HR department as a result. But this younger workforce, many perhaps without dependents and without significant health concerns, may not value this benefit - and the funds used for it could therefore be more fruitfully used elsewhere.
Likewise, those with an older workforce may find that Death In Service, when delivered without a proviso regarding the expiration of the benefit at pensionable age, may also be unsuitable. If staff within a business are frequently choosing to continue working rather than retiring, the business could be at risk of significant pay-outs in the future.
How a Gap Analysis can help businesses ensure their employee benefits are an asset
A Gap Analysis, ideally conducted by a specialist such as the team at CLEAR, can be of use to almost any business that offers their staff benefits.
Where the benefits may have been an afterthought versus straightforward remuneration, it can help to ensure that they become a significant asset in enhancing staff happiness, and as a result, productivity.
It can also help to predict future issues that may arise as a result of a particular benefits offering - and form the first step in rectifying them.
And for businesses who have a benefits package that satisfies their workforce and presents no potential issues, it’s an opportunity to discover how the provision may be made more cost-effective. This is particularly true with the ‘whole of market’ view that a specialist broker like CLEAR are able to provide.
To discuss a Gap Analysis of your benefits provision, contact the author, Nick Skipper, at email@example.com or on 020 8329 4983.