Employee benefits – what is important to you?
PUBLISHED: 09:28 11 January 2019
Do companies do enough to keep their staff with workplace perks like pilates? Peter Sharkey investigates.
How was it for you? I’m referring, of course, to the first full week back at work.
No doubt Colin in accounts was still there, despite his drunken declaration at the staff Christmas party that he was heading off to California with his guitar and songbook. And that ‘awkward client’ file surreptitiously hidden to one side of your desk just before the holidays almost dared you to open it. Sound familiar?
By Wednesday lunchtime, I thought it was 6pm Friday. Dry January? You’ve got to be kidding; if ever there was a month when you fancy a drink, it’s the opening 31 days of the new year...
Nevertheless, there’s every indication that matters will improve during 2019.
For a start, wages are rising and will likely continue to, with nominal pay increases hovering close to 3.5pc. With unemployment as low as it’s been for more than 40 years, we can expect further growth in wages as employers compete for talent.
Traditionally, employers have reacted to this favourable combination of rising wages and tighter labour markets by topping-up their list of employee benefits, which is why free iPhones and holiday travel vouchers seem almost conventional nowadays, though an online search can unearth dozens of additional benefits of varying quality.
One firm provides its staff with weekly chair massages, in-house yoga sessions and organic lunches. Another offers staff ‘paid puppy leave’ to help their newly-acquired dogs settle in, while one employer has a company-wide ‘self-management structure’ enabling staff to come in when they want and decide what they want to work on.
Google, deemed “the masters of staff happiness”, offers an array of perks, including physical therapy, a masseuse, laundry facilities, haircuts, swimming pools, a gym, table tennis, video games, free taxis to and from work and free access to scooters in the office...
It’s noticeable that very few of these occasionally odd-sounding perks include ‘attractive pension with flexible benefits’ among the mountains of free food, tanning beds and monthly grooming budgets.
This is surprising because employers who create appealing retirement benefit arrangements for their employees are providing themselves with a competitive edge when it comes to recruiting and retaining quality personnel. Indeed, shrewder employers will be turning their attention away from faddish benefits and considering the advantages of offering staff something longer lasting.
Many businesses have found that given the option, employees tend to prefer flexible pension arrangements ahead of pay rises. Research conducted by PwC found that employees value tax-efficient savings such as pensions and share plans more than any other staff benefit.
PwC’s survey asked 2,400 employees at different firms which are the two most highly valued employee benefits. Almost two-thirds (65pc) said contributions to their pension pots, while 50pc said they would participate in a company share scheme. Company cars and private medical insurance were much farther down the list.
Yet a sizeable number of employers remain unaware of the benefits of tailoring their perks to satisfy employee demand. On paper, financial benefits which go beyond the minimum statutory requirement to provide workplace pensions may appear little more than an additional cost, but such schemes help retain staff which, in turn, reduces turnover and recruitment costs.
But what if your employer insists that a combination of pilates classes, arcade machines or ‘wellness allowances’ represents the limit of their largesse? Fortunately, you have two options: you should ask your employers if they would consider something more conventional than a ‘food evangelist’, such as a company share scheme, or you could do it yourself.
Assuming you’re earning £25,000, you might expect a pay rise of around 3.5pc (£875) this year. As you’ve never had this additional money before, it could prove worthwhile to immediately transfer the after-tax sum you receive (around £700) into a stocks and shares ISA, or use it to start a personal pension. Do this every year, at a net cost of £58.33 a month, and after a decade, you could, with reasonable growth, have built a pot worth more than £10,200. That’s enough to attend as many pilates classes as you like.
TAM Asset Management Ltd offer investors the opportunity to invest in a variety of mainstream and ethical ISA portfolios based upon their attitude towards risk. For further details, please visit the MoneyMapp website.
THE WEEK IN NUMBERS
Britain’s local authorities generated £847 million from parking operations during the 2017/18 financial year, an increase of £165 million over the past five years. Over the same period, money spent by local authorities on road repairs fell from £2.8 billion to £2.4 billion.
Online retail giant Amazon now has 16,000 click-and-collect locations across the UK. As high street sales continue to plummet, Amazon claims its pickup points are good for retailers as “they drive footfall to their stores.”
German psychologists claim that the ‘Mona Lisa effect’ where the eyes of a painting appear to follow you around the room, does not actually work for Leonardo Da Vinci’s portrait, painted between 1503-06. At best, the Germans suggest the Mona Lisa’s gaze is glancing at an admirer’s right ear.
For more financial advice, read Peter Sharkey regular column, The Week In Numbers.