Financial education & changing habits
Using benefits to fund benefits
Make employee benefits cost-effective with Sodexo Engage
COST-EFFECTIVE EMPLOYEE BENEFITS: HOW TO GET MORE FOR LESS
The cost-of-living crisis doesn’t just impact employees. Businesses feel the strain, too – some more than others. A YouGov survey highlights the areas where Brits are cutting back on their spending to afford the rising food and energy bills.
These cuts will impact some businesses more than others causing them, in turn, to tighten their budgets.
Making Business Savings
Just like their employees, employers are identifying ways to make money stretch further. It’s just in their business space instead of the home. For some organisations, finding the funds to offer employees more support through mental, physical, and financial benefits will be difficult.
Money needs to be spent wisely, which means businesses will review the employee benefits they offer, assess employee uptake, whether they’re fit for purpose, and cost-effectiveness.
Businesses want to help their employees. The appetite is there, as is the employee demand, but so are the budget restraints. Doing ‘as much as possible’ will differ from one business to the next.
Here at Sodexo Engage, we understand the challenges HR professionals face. We’re helping make employee benefits sustainable and cost-effective so businesses can provide crucial support with maximum impact.
Financial Education & Changing Habits
One of the key strategies to implement is financial education for your employees, as it forms the stepping stone to introducing impactful financial benefits.
When employees are given the knowledge and skills to make the most of their money and change how they spend, they’ll be more receptive to the financial benefits you provide them, such as a prepaid cashback card.
Consumers are used to buying things at the click of a button but stretching money further and finding the best deals involves an element of planning.
For example, our employee discounts platform allows employees to buy vouchers from top retailers and supermarkets at discounted rates. These can be used in-store or online, but to use the online grocery shop as an example, here’s how your employees would save:
- Employee selects items for their regular weekly shop.
- They reach the checkout and see the total cost is £129 (the average weekly spend for a family of four).
- Typically, the next step is to select the card they wish to use to pay.
- However, with an employee discounts platform at their disposal, accessed via the desktop site or app, they could purchase a £129 voucher and use it to pay for their entire shopping basket. With an applied discount of 6.5%* (as an example), that £129 voucher would only cost them £120.62.
Taking a bit of time to purchase the voucher saves the employee £8.38 off their weekly shop. This isn’t ground-breaking in isolation, but when repeated every week of the year, it amounts to £435.76.
This money can contribute to the extra expense of Christmas, a family day out, or pay for over four full tanks of petrol.
Your employees’ power to save grows further when they make it a habit to check what vouchers are available before they make a high-end purchase. This same principle can be applied to our employee cashback card. However, instead of seeing an instant saving, employees accumulate cashback earnings each time they use the card with participating retailers. All your people need to do is ensure they remember to top-up the card with the necessary funds.
This paints a clear picture of why educating employees and nurturing better spending habits will help with the uptake of the benefits you offer, thus making them more sustainable and cost-effective.
Using Benefits to Fund Benefits
There are many ways a business can make savings from the benefits they offer, especially when those benefits boost employee engagement, performance, wellbeing, and productivity.
Here are some examples of what these savings can be attributed to:
- Increased productivity
- Lower rates of absenteeism
- Reduced recruitment costs due to improved employee retention rates
- A shortened recruitment process due to an improved employee value proposition.
There are other measurable benefits, but when using the above examples to calculate the cost of a benefit versus savings made, there is a reliance on assumptions.
This is where salary sacrifice schemes come into their own.
When an employee purchases a bike, car, or annual leave through a salary sacrifice scheme, the business makes savings on the National Insurance Contributions they’re liable for on behalf of that employee.
This gives you exact figures, not assumptions.
Annual Leave purchase schemes are incredibly popular, and once embedded into your business, you can assess uptake, patterns of behaviour, and make data-driven predictions on the potential savings. These predictions will enable you to estimate what funds you can make available to invest in further employee benefits.
We’ve recently seen an increase in businesses using our eVouchers to deliver a cost-of-living benefit - sticking with a maximum of £50 per employee to avoid additional taxes. Employees can spend these vouchers online or in-store with over 100 retailers, including supermarkets.
If we use the savings made from the annual purchase leave scheme (detailed above) to fund the cost of these vouchers, there would be enough money to gift 20 employees with a £50 cost-of-living voucher.
Therefore, a company with 200 employees would only need a 10% uptake in the annual purchase leave scheme (based on the figures above) to gift their entire workforce without facing additional expenses.
Make Employee Benefits Cost Effective with Sodexo Engage
Here at Sodexo Engage, we don’t want to point business leaders and HR professionals in the best direction; we want to empower and enable you to get there.
Whether you want to boost employee engagement, solve recruitment and retention issues, or help your employees during the cost-of-living crisis, we can help. Request a call from an engagement expert today, and we’ll help you embed cost-effective benefits into your business.
* Retailer discounts vary.