How happy are your employees?

01 June 2018

I ask the team once a year 'if you could change one thing, what would it be?' Possibly a dangerous question! However, as an employer, there are some things that you can change to help your employees that they may not necessarily know are available, but would still value.

You are probably only too well aware of how hard it can be to attract and retain good employees. The unemployment rate for the period January to March 2018 was 4.2% - the lowest since 1975 – and the employment rate was 75.6%, the highest since comparable records began in 1971 (source: Office for National Statistics, May 2018). Therefore, attracting and retaining the right people is a priority for any business. With so much choice available to those looking for a change in role, the culture of a firm and the benefits it provides to staff are likely to play a significant part in an individual's decision on whether to make a move or stay put.

There are a number of valuable benefits for staff. Indeed, you may have already achieved similar planning for the business directors / partners. However, cost effective benefits can be provided without breaking the company bank account and we have suggested some 'benefits package' ideas (either stand-alone or as a combination) below.

Death in Service Benefit – high value for relatively low cost

Death in service cover can be a highly effective way of providing team members with additional cover at (usually) a relatively low cost to the employer. Usually focusing on cover of three or four times base salary as an example, the company can arrange group cover for the whole team (subject to minimum numbers), often with minimal or no underwriting.

Death in service cover provides a cash lump sum for an employee's beneficiary in the event of their death whilst employed and some providers also include facilities such as bereavement and probate support for family members. In our experience, employees really value the security of knowing that their families would receive financial support at a difficult time and this can strengthen staff loyalty and improve employee attraction and retention. Also, it's not currently classed as a benefit in kind, meaning that employees don't have to pay tax on this benefit.

Private Medical Insurance

Private medical insurance (PMI) is another benefit which is often highly valued by potential employees and it can be a good differentiator, as not all SMEs offer this as a company benefit. Cover can be extended to family members of the employee if desired to enhance benefits further.

These plans usually have an 'excess' level – an amount that must be paid before the policy will start paying out – and as a general rule, a higher excess would normally result in a lower premium, although this is not always the case.

It should be noted that any premiums paid by the company on behalf of the member and their family are a taxable benefit in kind.

Pension contributions – can you go higher?

Under current auto-enrolment legislation, employers are now obliged to provide a workplace pension scheme for staff members and to make contributions on behalf of eligible individuals. As this legislation now applies to all employers, it may not be seen as a distinctive 'benefit' if companies are basing contributions on the legal minimums. If your company pension scheme is currently on a minimum basis, it is worth considering whether it would be affordable to offer higher benefits to staff – as examples, this could take the form of a higher employer contribution than is currently required, or an offer to match employee contributions up to a certain level if members decide to contribute more than the minimums currently required.

In addition, you might want to consider the type of pension scheme you currently offer to your staff. There are a number of simple, low-cost schemes available which serve their purpose and are excellent in terms of ensuring that an organisation complies with its auto-enrolment duties. However, depending on the size of the company, it could be possible to set up a group personal pension scheme arrangement which complies with workplace pension's legislation, whilst offering a wider range of fund choices and investment options than the standard schemes. This could be something to consider for the whole workforce or potentially for more senior staff members (possibly combined with higher employer contributions) to create a distinct additional benefit for higher level employees.

Permanent Health Insurance / Income Protection

Permanent health insurance (PHI) or income protection are policies that pay out a proportion of the employee's net income in the event of inability to work due to ill health. These types of plan are arranged to pay an agreed level of income in the event of inability to work due to ill health until a fixed age (say 60-65 as examples) after a waiting / deferred period (benefit will only be paid after this time). The waiting period (selected at outset) is usually 4-8-13-26-52 weeks and the longer the waiting period the lower the premium paid per month. You can also build other options into these types of plan, such as protection against the effects of inflation, as one example.

The benefit allows the employer to protect the employee whilst unable to work due to ill health, without being a significant drain on the business profits. This is not a benefit in kind to the employee.


These are just a few ideas for ways in which you can make existing and future staff feel valued and encouraged to remain part of your team.

You may be comfortable that you remain competitive with your employment offering. As we noted at the start of this blog, markets and economic factors change, and keeping an eye on the overall package you offer is usually worthwhile in delivering your business outcomes.

No individual advice is provided during the course of this blog and if you would like to consider these opportunities a stage further then please let the team at Chapters Financial know.

Keith Churchouse FPFS


CFP Chartered FCSI

Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899