To attract and retain employees, it's no longer enough to pay a competitive salary. Employee benefits are continuously expanding, and employee expectations are rising in tandem. A robust employee benefits package can aid any UK company's success. However, with only 41% of UK workers satisfied with their benefits, this is an area where there is room for improvement. Today, a comprehensive benefits package is regarded as a symbol of a company's prominence and is essential for motivating high-performing personnel.
Excess workload and a lack of assistance, among other factors, have been linked to workplace stress. However, people don't necessarily suffer stress at work because of their jobs. A vigorous employee benefits package can go a long way toward assisting employees in resolving these challenges. The importance of employee benefits are as follows:
Retirement, holiday pay, maternity/paternity pay (sometimes exceeding the statutory limit as part of a comprehensive benefits package), and sick pay are all mandatory employee benefits in the United Kingdom.
In the United Kingdom, pensions are a legally mandated benefit, and employers must follow the law and automatically enrol qualified employees in a pension plan. Employers are required to offer a minimum level of pension provision for their employees under pension auto-enrolment. The current minimum contribution rate for occupational pension plans is 8% of 'qualified earnings' (as defined in the legislation), and the employer must pay at least 3% of this. On the other hand, pensions are regarded as a critical benefit in the United Kingdom, with many employers contributing far more than the legal minimum.
Businesses with a good pension plan also perform well in recruitment and retention. Pensions might be challenging to comprehend, but pension advisors and organisations like the Pensions Regulator and the Pensions Management Institute can help. There are four different kinds of schemes, namely, Final Salary Schemes, Money Purchase Schemes, Stakeholders Scheme and Group Personal Pension Scheme.
While employers cannot prevent employees from being ill, healthcare benefits can assist them in returning to work sooner, lowering absenteeism costs and increasing productivity. These bonuses are a significant recruitment and retention strategy that will boost employee loyalty and give your company a caring image.
The National Health Service (NHS) in the United Kingdom is a state-funded healthcare system that anyone residing in the country can utilise without paying the total cost of care. This includes the following:
The NHS is 'publicly funded,' with the majority of the funds coming from taxes paid by UK residents. Given the present strains on the NHS and longer wait times, a rising number of businesses are contemplating private healthcare options to ensure that their employees have quick access to healthcare advice and treatment when they need it most.
All employees who work a 5-day week are entitled to at least 28 days of paid yearly leave every year. This equates to 5.6 weeks of vacation time (known as statutory leave entitlement or annual leave). Public holidays can be included in an employer's statutory annual leave, and employers in the United Kingdom frequently grant more paid vacation time than required. Furthermore, as part of a flexible benefits agreement, many businesses may provide employees with the option of boosting their holiday entitlement by 'purchasing' extra days.
Companies are required by law to provide a minimum level of Statutory Sick Pay; however, most employers choose to supplement this minimal benefit by providing contractual sick pay benefits. In the United Kingdom, it is usual practice to pay full pay for a period of sick leave (2–4 weeks, for example) before reducing compensation. Some industries are quite generous, while others do not offer additional sick pay.
A father's minimum leave entitlement would increase from two to six weeks under proposed reforms to the parental leave system unveiled by the government in early 2011, and new parents will be allowed to split the nine months' leave formerly allocated solely for the woman.
Statutory maternity leave: Pregnant and working professionals are entitled to 52 weeks (1 year) of maternity leave, regardless of how long they have worked for a company. This consists of 26 weeks of regular maternity leave and an additional 26 weeks of maternity leave. Individuals have several privileges during this time and can also request flexible working arrangements from their employer if they desire to return to work at the end of their leave. While professional women are on Statutory Maternity Leave, their job terms (for example, their pension payments) are safeguarded; if a person is laid off while on Statutory Maternity Leave, they have additional rights.
Statutory maternity pay: If all of the following apply to you, you will be eligible for Statutory Maternity Pay (SMP). Before your 'qualifying week,' you worked for the same job for 26 weeks. Before your qualifying week (£123 from 3 April 2022), you must have earned at least £120 per week on average for the previous eight weeks.
SMP (Statutory Maternity Pay) is paid for a period of 39 weeks. You collect 90% of your average weekly income for the first six weeks. You get whichever of the following is lower for the next 33 weeks, £151.97 per week ( £156.66 from 3 April 2022,) 90 per cent of the average weekly income.
In the case of twins, you will receive the same amount of maternity pay.
Statutory paternity leave: Employees have the option of taking one or two weeks off in a row. Even if they have more than one child, the amount of time is the same (for example, twins). Leave cannot begin before the baby is born. One of the following dates must be used as the start date:
The leave must be completed within 56 days of the birth (or due date if the baby is early). If the employee is adopting, the start and finish dates are different.
Statutory paternity pay: According to the UK Government website “Statutory Paternity Pay for eligible employees is either £151.97 a week or 90% of their average weekly earnings (whichever is lower). Tax and National Insurance need to be deducted”.
The other forms of benefits offered by organisations for their employees working in the United Kingdom are as follows:
Through flexible benefits or Flex programmes, individual firms can construct a custom package of benefits for their employees, including daycare vouchers and extended vacation days to corporate automobiles and free cell phones. According to estimates, flexible programmes are now offered by over 500 UK employers.
Employees must agree to give up a portion of their compensation in exchange for the benefits they choose under the rules of a Flex plan, and most firms provide their employees with a self-service menu of alternatives to choose from, with money deducted from their overall salary for each perk.
Employees have more flexibility with voluntary benefits plans. Organisations make various discounted products or services available to their employees, but they must purchase them themselves. Optical, medical, and dental cash plans, childcare vouchers, and leisure services such as gym membership are examples.
Benefit management systems are offered by companies like Edenred and Benefex, allowing corporations to choose whatever benefits they want to provide their employees and, if desired, set up a plan for payroll deductions. These organisations often have connections with hundreds of retailers and can connect their employees with companies that can give the perks and discounts they are looking for.
Employees are eligible for a redundancy reimbursement after two years of continuous service if their position is discontinued. Employees between the ages of 18 and 21 will earn half a week's pay for each year of continued employment, employees between the ages of 22 and 40 will receive a week's compensation for each year, and employees aged 41 and up will receive a week and a half's pay for each year of continuous service. However, If employers do not wish to pay the whole sum, the weekly entitlement is capped at £400. These payments will be tax-free for the first £30,000
Most employers provide an EAP as a stand-alone benefit or part of their Income Protection package. Employees increasingly embrace virtual GP services as a decent way to get healthcare advice and support online, and this is typically offered as a value-added service as part of a PMI or GIP benefit.
Despite the fact that many businesses publish a list of benefits in their job descriptions, it is not always evident what is on offer right away. However, before accepting any job, you must question a potential employer to validate the benefits they provide. Not only it may influence your decision, but it may also allow you to haggle on the package you receive, whether it's to cover moving costs or gain more flexible working hours.