Sign up to our newsletter to get the latest from Business Advice.
HR Fred Heritage · 5 December 2017
Rising costs prevent smaller firms from implementing employee benefits schemes
Increasing costs have been shown to be the main hurdle faced by small business owners when delivering employee benefits programmes. New research has shown that half of HR managers at UK companies view rising costs as the biggest challenge to implementing an employee benefits programme in the next three years, whilst 35 per cent are worried they?ll have insufficient funds to put employee benefits in place. The study, from insurer Willis Towers Watson into trends in employee benefits, also found that 40 per cent of Britain?s HR decision makers don?t know their firm?s total spend on employee benefits. Recognising the need for change in delivering benefits programmes to staff across the UK, the research revealed that 67 per cent of companies plan to review their employee benefits strategies over the next three years. Whilst the majority of business owners will review their strategies to better manage overall costs, 69 per cent will do so to influence employee behaviour. Commenting on the research, sales and marketing head in the Health and Benefits department at Willis Towers Watson, Mark Ramsook, said that employers shouldn?t be put off by employee benefits programmes because of perceived increasing costs. He said: ?An increase in the cost of traditional benefits will understandably provide cause for concern but it shouldn’t be seen as prohibitive to implementing a programme of employee benefits that delivers business value.? Hangover days and festivals: The unusual workplace perks proving a hit with staff The study revealed other challenges HR professionals faced when introducing employee benefits programmes at their business. These included a lack of data to measure the results of programmes (27 per cent), changes to statutory benefits (26 per cent) and a lack of the technology needed to implement employee benefits programmes. ?The challenge for businesses is to become more creative in the design of benefits schemes because a one-size-fits-all approach is rarely appropriate,? added Ramsoik. ?Instead, consideration should be given to how benefits can be targeted towards areas of greatest need and how traditional products, such as medical insurance, might be supplemented by more niche products that can be used to address specific health issues in a more cost-effective manner. ?Employers should start by using available health risk data and employee feedback to identify trends and the underlying root causes. It is then important to build a clear picture of cost and desired outcomes resulting from each area of spend. This will make it easier to measure progress, reallocate spending where necessary and provide clearer evidence of return on investment.? How small firms can match big business on employee benefits
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.