Employees today are looking for more than a paycheck and the statutory pension - they’re looking for that appreciation, and unfortunately, an employer who doesn’t give that to them will not keep on being their employer for long, if they manage to recruit them in the first place, that is.
As a manager at an SME, you’re aware of the pressure to provide Google-quality employee benefits, but you’re also concerned about the energy, time and cost that it will incur. We wanted to take the time to share with you why we think a good benefits scheme can not only be cheaper than you think, but also save you money, create a more productive workforce, and make your employees happier and healthier.
What your employees actually want
If we asked you how happy your employees are with the benefits you currently offer, you’re likely to answer that they’re quite happy. In fact, 61% of employers believe their employees are happy with their benefits package. However, only 40% of employees are actually happy with the benefits they’re getting. So there seems to be quite a gap there.
This gap means employers are less inclined to purchase benefits for their team, although their team wants them. Placing little importance on perks can create frustration amongst your people, who may be feeling under-appreciated based on what you’re currently offering - especially in SMEs, who tend to have smaller benefits packages in the first place.
This frustration means your employees may be less engaged and motivated about their work, which is obviously the last thing you want from your talented employees. The more engaged and motivated they are, the more successful your business is - we know that businesses with engaged employees outperform those with low engagement by 202%!
The good news is that even if your employees aren’t crying out for more employee benefits, they’re likely to help engagement either way, as 27% of SME owners say that benefits play a major role in motivating their staff.
Even if you don’t believe in employee benefits, the truth of the matter is that other businesses provide them. And ‘other businesses’ also include your competitors.
Of course, your competitors aren’t great, and who would even want to work there? But in such a saturated market, your employees are likely to sniff around other organisations, and if the benefits they offer are better than yours, that’s just another con to their pros and cons list that you just don’t want them to have.
When it comes to SMEs, the problem is twofold - it’s not only your direct competitors that you might worry about, it’s also your big, established, corporate competitors that may pull in your staff with their tempting benefits. 63% of SME owners are concerned about the difference between the benefits they offer and the benefits larger companies do, so it’s not a small problem.
By looking into the benefits your competitors - large and small - offer their staff, you can sense what your own employees might want you to add to your scheme.
Turn off turnover
The issue with your competitors is not only your pride, or wanting to be as attractive as them for the sake of being attractive. It’s also that employee turnover is an expensive and draining business.
SMEs, in particular, are increasingly aware of the cost of attracting the right talent and retaining it, as they have less money to spare and they’re competing with the majority of the market. You’ve invested time and money in making your employees the best they can be, so their leaving would start the process from scratch. The average cost of employee turnover in the UK is £11,000 per employee - that’s not a joke.
Long are the days of only having one job your entire life. Talented people are aware of the variety of options out there, and when they aren’t happy - they will leave. It’s as easy as that.
It’s even more true for younger workers. More than 50% of Millennials are expecting to leave their current role within the next 3 years, and given the fact that Millennials are now 23-38 years old, it’s a sizeable chunk of your workforce who don’t think they’ll stay with you for long. If each one of them costs £11,000 on average to replace, you can do the math yourself.
Of course, raising salaries would be great, but it doesn’t give the added value you may be looking for. Benefits, however, are an easy way to make sure you’re doing everything you can to reduce those turnover rates and attract the right talent.
According to a study from Glassdoor, almost 60% of employees share that perks are in the top considerations before accepting a role, so if you do a good job on your benefits package not only will you attract better talent, but also avoid them being successfully wooed by another company.
SMEs can sometimes grow really fast - definitely in higher rates than big corporates. Certain SMEs can jump from no employees at all to 300 employees or more in two years! That means your benefits scheme needs to update quickly and be agile enough to include a variety of new roles and requirements.
With great growth comes great responsibility, and even if you had no benefits when you had 10 employees working out of someone’s shed (or a WeWork. After all, it’s not the 1990’s anymore), it may not be the case when you have 50 odd employees. Sure, it’s great to have benefits no matter how big your company is, but the bigger it gets, the more urgent it is to get something in place - and something good at that.
A growing company also means quick shifts in company culture. Benefits can be a great tool to help you create a company culture you and your employees will be proud of, and sway more people your way.
SMEs are not only different because of the size or the company itself. They’re also different because of the employees that choose to work within them.
A recent LinkedIn study showed that people who work at SMEs are more likely to value a company that has a purposeful mission. They want to work at a business that does something good, and they want to feel like they’re pushing the organisation forwards with their role, making an impact on the business, but also on the world.
Benefits are a great way to make your employees feel cared for and appreciated for the work that they do, and also to illustrate that you’re standing behind your mission.
Hopefully, by this point, the advantages of employee benefits are pretty clear. But there’s a disadvantage we haven’t addressed properly yet: it costs money.
SMEs have a lot less budget to spend on anything that’s not an absolute necessity, and although we see benefits as one of those things, the decision-maker in your company may not see it that way.
That’s why we thought it would make sense to bust the myth about employee benefits! Sure, they do cost money - but not half as much as you may think.
For example, group life (also known as death-in-service) can cost as little as 0.3% of payroll - with yulife, you can get a policy for only £4.99 per employee per month!
It may also help to know that 80% of employees would choose additional benefits over a pay raise, so a good benefits package can save you money.
Sick with happiness
You’re paying to hire, train and keep your employees. Of course, they’ll be absent sometimes, but when it comes to sick leave, we all know that employees with unhealthy lifestyles are more likely to be sick. For you, that means paying for absence and lack of productivity. According to a study from the Institute for Employment Studies, up to 16% of annual salary bill may be spent by employers on sickness absence alone!
By purchasing wellbeing benefits for your company, you can help curb that number and support your employees' healthy lifestyle.
What to choose?
There’s a huge variety of possible benefits for your team, and if you’re considering purchasing some - and after reading this blog post, we sure hope you are! - there’s plenty to think about.
Life insurance, health-related benefits and eye-care are the most popular benefits offered by SMEs. yulife’s study in collaboration with Hymans Robertson shows that 53% of employees would always choose an employer which positively contributes to their wellbeing, even if it meant earning less money. So considering these perks is always a good place to start.
We think that yulife is the perfect match for SMEs. We provide group life insurance, as well as a wellbeing app for each of our members. In the app, your employees will earn yucoin, the wellbeing currency, for healthy activities such as walking and meditating. They can then exchange their yucoin for air miles and gift cards from brands like ASOS and Amazon. By getting rewarded for their health, your employees will be more motivated to care for their wellbeing.
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