by David Kindlon, CEO at Eppione
It’s a challenging time for business. Rising costs across the board, with many analysts predicting a future recession. Consequently, businesses are quite rightly looking at ways to tighten their belts. But should employee benefits be one such area, especially at a time when employees are facing increases in food prices, energy bills. mortgage rates and rent, to name but a few?
Cutting back on benefits can be a double-edged sword. Although you might see an immediate return through reduced spending, employee wellbeing and engagement could suffer – resulting in declining performance and productivity.
Choosing the right benefits mix to support employees and deliver a strong return on investment is rarely easy, with many options and schemes to choose from. Here are some of the top benefits for businesses to consider to support their workforce’s financial wellbeing.
Supporting employees to plan and prepare for the future can be a great way to provide financial peace of mind and increase employee loyalty. State Street Global Advisors’ Global Retirement Reality Report found that 46% of respondents did not feel financially prepared for retirement, with 13% having reduced their contributions in recent months.
Helping employees to manage and maximise their pensions can provide valuable reassurance and support for those worried about funding retirement. Providing access to educational and advisory services to help employees understand and manage their pension plan can be hugely valuable. The options range from online educational resources to one-to-one advice from a qualified pensions adviser to help employees become more comfortable with retirement planning objectives.
To get the maximum return on contributions made by both the business and the employee, its important businesses have the right pension plan in place. Consider the scheme’s tax relief method, default investment funds and performance, and any additional charges such as exit fees – and businesses should speak to a qualified adviser if they are unsure of which plan is best for their workforce.
Of course, with auto-enrolment expected to be introduced in Ireland in the near future, businesses should now be preparing for the changes, which will see around 750,000 people automatically enrolled into a private pension scheme.
Health & wellbeing benefits
With the public health service under significant strain, resulting in long waiting times for treatment, providing comprehensive health benefits – such as health insurance and cash plans – can support employees to access the care they need, when they need it.
But health benefits can also help improve employees’ financial wellbeing. For those employees currently funding, or considering taking out, their own health insurance policy, funding a company plan as an employee benefit can save your workforce hundreds – if not thousands – of euros a year.
Another popular wellbeing benefit is gym memberships. As people look to curtail their spending, costly gym subscriptions could be one of the first things to be cancelled. By either fully funding employees’ gym memberships, offering access to discounts, or allowing employees to pay through salary sacrifice, employers can support their workforces to stay fit and healthy, while reducing spending.
Life & sickness protection
Financial wellbeing isn’t just about providing support in the short-term – offering protection for employees and their families in the event of sickness or death can provide peace of mind that they and their loved ones will be financially supported should the worst happen.
Income protection cover is a hugely valuable benefit to offer the workforce. Not only can it be costly to fund privately, but it provides a welcome reassurance to employees that they won’t be left desolate if they need to be off work for an extended period due to sickness. Income protection usually provides monthly payments to the employee when they’re unable to work, typically calculated as a percentage of their salary.
Likewise, providing life cover as an employee benefit can reassure employees – particularly those with families – that their loved ones will be cared for financially if they were to pass away. There are a few different options for this kind of cover, including life insurance, life assurance and death-in-service.
The options for life and sickness cover are vast, and deciding which types of schemes businesses want to offer (and the specific plans to choose) can be hugely complicated. If businesses are looking for cover for the first time or to change to a better plan, they should speak with a qualified broker to help choose the best plans for their business and workforce.
If businesses are looking to provide more immediate support for their employees’ finances, there are a few benefits they can offer to ease the strain on their wallets. These include:
- discount schemes (on items such as retail and hospitality)
- free or subsidised meals and travel
- financial education and wellbeing workshops
Flexibility is key
When it comes to financial wellbeing, the priorities of each employee could be vastly different to each other. While those approaching retirement might be focused on pension planning, those just out of university might prioritise discounts and budgeting support. The key is to offer choice from a wide range of valuable benefits, with a platform that supports flexible benefits, to let employees choose the benefits that will assist them most.