A pick ‘n’ mix of rewards makes for a happy workforce
With the continuing squeeze on disposable incomes showing little real sign of abating, it is not surprising that more and more employers are introducing flexibility to employee reward, enabling staff to “take ownership” over how they are paid – choosing the mix of salary and rewards that works best for them.
We work with many clients to introduce flexible benefits, and by far the most popular staff benefit we have seen in the last couple of years is the opportunity for any member of staff to have a company car under a Salary Sacrifice arrangement – and they can even take a second car for other family members. The cars are on two or three year contracts with no deposit and the package includes all servicing, maintenance and repairs, as well as insurance, which is fixed for the duration of the contract. The scheme makes brand new cars affordable for those who might not otherwise be in a position to buy one – there are over 6,000 models to choose from, and the whole package can cost the employee as little as £150 per month. There is very little admin for the business – it is handled by the leasing company – and employers actually save money via a reduction in Employers’ National Insurance Contributions (NICs). The arrangement has also been “de-risked” from the employer perspective, ensuring that no hefty early termination costs result if an employee leaves part way through the contract. There is no doubt that this has significantly aided retention and motivation where it has been introduced.
Another very popular development in Salary Sacrifice is an arrangement for smartphones, computers and other IT. Staff are able to select from a vast range of computers, laptops, tablets, smart TVs etc and can take advantage of discounts and tax efficiencies. For example, iPads are available for as little as £7.00 per month, and again, Employers’ NIC is saved in each case.
All of the more “traditional” Salary Sacrifices, such as Childcare Vouchers, Cycle to Work, discount vouchers, healthcare and pension contributions, remain popular as a part of overall reward strategy, together with car park season tickets and Work Related Training. If structured correctly and well communicated, the introduction of these arrangements can deliver significant cost savings for the employer, as well as a happy and motivated workforce.