Offering employee benefits is an effective incentive for both existing and future workers. In fact, two-thirds of employees admit that benefits are an important factor when applying for a new job, whilst 80% said that they would choose an ‘enhanced benefits package’ over a pay rise.
It’s clear that a compensation package is no longer complete without additional benefits.
Since they not only help to attract top talent, but cultivate a positive and supportive workplace culture that proactively enhances the employee experience, employers across the UK would be wise to think about what they can offer.
However, benefits can be wide ranging and diverse, making it difficult to pin down exactly what types you want to include in your compensation package. This brief introduction to benefits for employees in the UK gives you a quick overview of the key types of statutory and discretionary benefits that you can choose to offer your workers.
Before we take a look at the different types of benefits, let’s go back to the basics. What are employee benefits? Employee benefits can refer to a diverse range of things but generally they form part of a wider employee compensation package in addition to their salary. Some types of benefits are statutory employee rights and others are offered at the employer’s discretion.
Just because there is a plethora of different benefits out there, doesn’t mean that they necessarily make sense for you or your workforce. Tuning into your employees’ wants and needs is a great place to start. This should indicate to you what your workers want in their compensation packages.
All employees in the UK enjoy a certain number of statutory entitlements which employees can choose to supplement. There are also many types of discretionary benefits that can be added-on to compensation packages.
Statutory benefits are benefits that UK employees are entitled to by law. This means you must honour these benefits in your employment contracts.
In the UK, almost all workers have a legal entitlement to 5.6 weeks (or 28 days) of paid holiday every year. This is what is known as ‘statutory leave entitlement or annual leave.’ Bank holidays and public holidays do not have to be counted as paid leave, but employers can choose to include them in their workers’ statutory annual leave.
Employers can choose to offer their workers additional leave as a benefit to supplement statutory leave entitlement. They can either do this by offering additional paid days off to their employees or allow their workers to ‘buy’ additional holiday too.
All employees have the right to take time off work when and if they fall sick. The only requirement is that if they are off work sick for more than seven days, they need to show their employer proof.
In order to supplement this legal entitlement, some employers may offer a policy that promises to pay workers more than statutory sick pay (SSP) for a longer period of time.
Workers who have or adopt a baby are eligible to take the relevant type of leave following the birth or adoption. The mother gets 52 weeks of paid Maternity Leave, which is split into Ordinary (the first 26 weeks) and Additional Maternity Leave (the latter 26 weeks).
1 to 2 weeks of paid Paternity Leave is available to workers whose partners have had a baby or have adopted a child.
If a worker adopts a child, they are entitled to up to 52 weeks of Statutory Adoption Leave. However, only one person within the couple is allowed to take adoption leave.
Eligible workers have a right to take unpaid parental leave in order to take care of their child’s welfare. This could include simply spending time with them, arranging child care, or touring prospective schools for example. It’s important to bear in mind that parental leave entitlement applies to each child and therefore does not reset if an employee changes jobs, for example. Eligible workers get a total of 18 weeks of leave for each child until they turn 18.
The law requires employers to offer a workplace pension scheme into which their workers are automatically enrolled. Employers also have to a make a minimum contribution of 3% to each worker’s pension fund, but they can choose to offer more if they want to.
Employees in the UK also enjoy the statutory right to ask for flexible working arrangements. This essentially means changing their working pattern from their current one.
There is no requirement for employers to offer anything above the statutory employee benefits that we’ve covered. However, many employers choose to supplement their compensation package with attractive benefits that support and reward their employees in other ways. This can look different in every workplace, but a few common examples of discretionary employee benefits include:
Some employers in the UK choose to offer their employees private medical insurance and/or mental health support. Indeed, a study carried out last year showed that UK business leaders are boosting their investment in mental health and wellbeing support by 18% this year. Some employers also supplement their health support with private dental plans too.
An Employee Health Assistance Programme is a type of employee benefit offered by some employers in the UK that aims to support and help workers when they’re facing personal problems. Often, these EAPs consist of therapy or counselling services where employees can seek advice and support when they are facing adversity.
Wellbeing is a broad term and different employers can interpret this as they like. For example, employers might offer a Cycle to Work Scheme, a complementary gym membership, or ‘Help to Buy’ schemes that assist employees in purchasing the latest piece of tech that they want to use for work or a bicycle, for instance.
Some organisations also choose to offer subsidised food or discounts where they have an established partnership with a supplier, for example.
Offering a learning and development budget is a great way for employers to support their workers whilst also benefitting their business. This helps to cultivate employees’ skills whilst also helping them to feel valued and supported if they want to pursue further education or develop their professional abilities.
Some employers may choose to supplement the legally required pension contribution with an additional top-up.
Offering life insurance or assurance is a promise to provide for a worker’s family or dependents should they pass away whilst still working for you.
Offering employee benefits is not only advantageous to your workers but to your business and brand. Firstly, this is a great way to boost employee morale and show proactive support for their wellbeing outside of work. Overall, this should lead to an improved employee experience which directly correlates to employee retention rates. Finally, when it comes to attracting new hires, your compensation package is often what makes your offer the most competitive.
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