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Published:22nd June 2023
Summary:
The impact of the cost-of-living crisis
Making employee benefits matter
Making employee benefits impactful
Employee benefits & financial wellbeing
Employee benefits & physical wellbeing
Employee benefits & mental wellbeing
Making employee benefits sustainable & cost-neutral
Employee benefits & the strength of your EVP
Future-proof your business with employee benefits
Why choose Sodexo Engage as your employee benefits partner?
THE INS & OUTS OF EMPLOYEE BENEFITS
From the best physical, mental, and financial wellbeing employee benefits to how to make them cost-neutral. We cover the ins and outs of employee benefits, why they matter to your people now more than ever, and what the workforce of tomorrow expects.
What Are Employee Benefits?
This may seem like a redundant question in the world of the HR professional because we all understand what employee benefits are. They come in many forms, such as physical, mental, and financial packages or offerings that give your people something extra beyond their monthly salary.
We won’t list products here because our question is more philosophical: what do employee benefits mean to your employees?
Are they a perk of the job? A nice to have? Something that sets one employer apart from another, or are employee benefits essential to your employees’ daily lives?
During times of prosperity, many employees would think of an employee benefit as a bonus, but today, in the current climate, that last point is coming more into the conversation. Simply put, your employees’ wages aren't stretching as far as they once did.
86% of the population has had to make cuts because of the cost-of-living crisis, with just 12% of Britons saying they have not made any cuts yet, nor expect to have to make any (YouGov).
If you apply this statistic to a business with 250 employees, 245 of them are being financially impacted and have to make cuts to afford daily essentials such as heating, food, and fuel, with only five unaffected by the rising cost of living.
So, we’ll ask the question again. What do employee benefits mean to your employees?
The Impact of the Cost-of-Living Crisis
To explore the idea of benefits as a means of helping employees during the cost-of-living crisis, let’s review some more stats from the 2022 report by YouGov.
When asked whether they’d been able to afford key essentials, these were the results:
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49% have already had to make cuts to their usual spending and expect to have to make further cuts.
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25% have been able to maintain their usual spending so far but expect to have to make cuts soon.
Almost half of the survey respondents said that not only had they made cuts, but they expect to have to make even more.
Where are these cuts happening?
According to a supporting article by YouGov, Britons are cutting back in the following ways:
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42% cut on non-essential food items
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42% cut on holidays
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45% cut on going to the cinema
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42% of Britons cancelled their gym membership
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34% have cut back on pursuing a hobby
All the above cuts negatively impact your workforce's physical and mental health, which in turn affects their engagement, motivation, and productivity levels.
Making Employee Benefits Matter
We haven’t included these statistics for shock value. The cost-of-living crisis is shaping the world of employee benefits, and the research we present in our eBook, The Mountain of Lost Benefits: Making Employee Benefits Matter, confirms this.
We spoke to 500 HR professionals and 2,000 employees about their workplace employee benefits provision. We asked them what worked, what didn’t, and what they would change about what was on offer.
Our research found that over half (61%) of our employee respondents want their workplace to help them more with the cost-of-living crisis.
We saw in December 2022 that many UK businesses gifted their employees with a cash bonus, labelled as a cost-of-living bonus. Some organisations offered pay raises, but unfortunately, not all were in line with the rate of inflation.
The reality is that not all employers can afford to increase their payroll costs. A more sustainable and cost-effective approach to supporting employees’ financial wellbeing is needed; this is where employee benefits come in.
Making Employee Benefits Impactful
When it comes to ensuring your employee benefits offering is impactful, there are several factors to consider, such as the diversity of your workforce, the generational divide and varying lifestyles.
In our second Mountain of Lost Benefits eBook – Closing the Expectation Gap – we discovered that only 11% of employees make full use of their employee benefits. One of the reasons for low uptake is due to the way the available benefits are communicated.
According to our research, 29% of employees often don’t know where to find information about workplace benefits and rewards, and 27% don’t know who to ask about their employee benefits.
It’s clear that ineffective and inconsistent communication on employee benefits is a cause of low uptake, but it isn’t the only reason your employees aren’t engaging with their benefits.
In our latest eBook, The Mountain of Lost Benefits: A Spotlight on Healthcare, we look in depth at the healthcare industry, exploring the cause of low uptake. Alarmingly, 43% of our employee respondents in the healthcare industry said their employee benefits don’t align with their needs, and 67% said that their organisation could be doing more to support employees and offset cost-of-living pressures.
Employees across all sectors a crying out for their employers to provide impactful and relevant employee benefits that will support them during the cost-of-living crisis and beyond.
We recommend starting with your people, conducting surveys to discover what employee benefits matter to them and making data-driven decisions. However, there are three core pillars in which employees seek support: their physical, mental, and financial wellbeing.
Employee Benefits & Financial Wellbeing
This wellbeing pillar needs no introduction, given we’ve already painted a clear picture of the impact the rising cost of living is having on the nation. The truth is the majority of your workforce wants and needs financial support.
We’ve established that not all companies can afford salary increases or to continually offer cash bonuses, and financial employee benefits are the answer.
A Means of Stretching Salaries Further
Employees need help making their salaries stretch far enough not just to cover the essentials but to let them enjoy life, too.
Employee Cashback Card: Our Employee Cashback Card, known as Spree, is a cost-effective and sustainable way to provide employees with financial assistance, allowing them to earn up to 15% cashback when they use their prepaid cards to buy goods at one of our (over) 80 participating retailers. Whether they use their cashback earnings to reduce the cost of the next weekly shop or keep their pot building up to contribute towards Christmas – your employees’ money goes further.
Employee Discounts Platform: Our Employee Discounts Platform is another inclusive employee benefit that makes your employees’ money stretch further.
Here’s how it would work if an employee took advantage of this benefit for every weekly shop:
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Employees access our Employee Discounts Platform via desktop or app and buy vouchers from top retailers and supermarkets at discounted rates to spend in-store or online.
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Employee selects items for their regular weekly shop.
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They reach the checkout and see the total cost is £129 (the average weekly spend for a family of four).
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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 saving isn’t ground-breaking in isolation, but when repeated every week of the year, it amounts to £435.76.
These salary-stretching solutions will support those employees who have made cuts on their usual spending and help them maintain a happy and healthy lifestyle.
Employee Benefits & Physical Wellbeing
Whilst the physical health of your employees is a topic of conversation in isolation since it impacts their energy, focus, productivity, and level of absenteeism, there is still a link back to the cost-of-living crisis.
Helping Employees Get Active
As we highlighted above, 42% of Brits have cancelled their gym membership due to the cost-of-living crisis, and the Mental Health Foundation suggests as a nation, we’re exercising 12% less often than we used to pre the cost-of-living crisis.
We’ve dedicated a blog solely on how you can make your physical wellbeing employee benefits inclusive, with our discounted gym benefit – which gives access to a vast range of fitness discounts beyond the traditional gym environment – and our Cycle to Work salary sacrifice scheme.
To make your physical health employee benefits impactful, individuality and inclusivity are essential. Our article explains the importance of providing an employee benefit that has something for everyone, regardless of lifestyle, time, ability, and interests.
Keeping Your People Healthy
30% of people admitted that they never see their GP when they feel unwell because taking time off work is too difficult. We don’t always care for ourselves as best as possible, especially when seeking help feels like another job.
This isn’t good news for employee health or your business’s bottom line.
At first glance, it may seem like employees not taking time off when they’re ill is a good thing, especially when employers pay £500 on average in absenteeism costs, per employee, per year. However, the flip side is that working whilst ill, known as presenteeism, is estimated to cost £600 per employee annually.
Let’s not forget that this is about more than a loss of business productivity. Preventative measures and acting on health concerns quickly save lives. As part of embedding employee wellbeing into your company’s core values, your people should be encouraged to prioritise their health.
Our Online GP employee benefit provides your workforce with access to a digital health platform, ensuring they get the proper care at the right time. Whether they need to speak to a healthcare professional or have their prescription delivered to their door, Online GP provides access to appointments - 24 hours a day, 365 days a year, from anywhere in the world.
The NHS is in a state of crisis, and the UK is facing a shortage of GPs, putting a strain on the service and impacting patients.
NHS data from January 2023 states that 26% of patients had to wait more than one week to get a GP appointment. Compare that with Online GP statistics from 2022, highlighting that 73% of appointments were booked within 16 hours.
We all appreciate our NHS, but we understand it’s under tremendous strain.
Utilising Online GP as an employee benefit doesn’t mean leaving your local NHS surgery. With permission, your Online GP notes can be shared with your NHS doctor and that service can remain as normal.
38% of people say that accessing an Online GP would improve their mental wellbeing because of the speed and ease of booking an appointment. Furthermore, an accessible Online GP service could save UK businesses £1.5 billion in lost time.
Employee Benefits & Mental Wellbeing
The cost-of-living crisis is heightening cases of financial anxiety, your employees are cutting back on the things that bring them joy, and they’re not exercising as much as they used to. Of course, this is not true for all people, but the statistics show it is true for many.
All these elements contribute to additional stress, leading to further mental health problems and burnout.
Burnout costs UK businesses an estimated £26 billion each year. This figure comprises the costs of absenteeism, reduced productivity due to presenteeism, and the cost of replacing employees who resign due to burnout.
Strong leadership and managerial support are essential, as is the need to break the stigma around discussing mental ill-health.
Only 2% of employees would feel comfortable discussing their mental health with their employer. We can’t be at our best when burdened by stress or mental ill-health, and seeking help is the first step towards positive change.
Our Employee Assistance Programme is the mental wellbeing employee benefit your people need. Provide them with access to BCAP-accredited counsellors face-to-face, by phone and email, 24 hours a day, 365 days a year, and you’re well on your way to boosting your employees’ mental health. Our popular and impactful mental health employee benefit also includes an online counselling, live chat facility for those who aren’t comfortable picking up the phone.
Making Employee Benefits Sustainable & Cost Neutral
57% of HR professionals feel pressured by senior leadership to cut down on benefits. The need to support employees via employee benefits has never been greater. Neither has the need to do so sustainably and cost-effectively.
There are many ways a business can make savings from the employee benefits they offer, especially when those benefits boost employee engagement, performance, wellbeing, and productivity. Additionally, salary sacrifice schemes are an effective way to make your employee benefits cost-neutral and sustainable in the long term.
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.
Once your Annual Leave purchase scheme is embedded into your business, you can assess uptake and patterns of behaviour and make data-driven predictions on the potential savings. These predictions will enable you to estimate the funds you can invest in further employee benefits.
Our eVouchers are a popular way of delivering a cost-of-living payment or employee reward, so let’s see how we can make them cost-neutral.
If we use the savings from the annual purchase leave scheme (detailed above), there would be enough money to gift 20 employees with a £50 voucher from funds already allocated to payroll.
Therefore, a company with 200 employees would only need a 5% uptake in the annual purchase leave scheme (based on the figures above) to gift their entire workforce without facing additional expenses.
Employee Benefits & the Strength of Your EVP
In the simplest terms, an EVP is what an employer offers an employee. It encompasses tangible employee benefits like perks and salary and emotional factors like culture and values. A strong EVP will speed up the recruitment process and create an engaged workforce that goes the extra mile, giving you an edge over your competitors while boosting productivity and profitability.
Talent Retention
76% of the 2,000 employee respondents that took part in the research for our Mountain of Benefits eBook said that the right support makes them feel more loyal towards their employer, and 71% consider their current benefits when thinking about staying with a business.
Talent Acquisition
A 2023 report by HR Review found that 72% of employers had to offer a higher salary than anticipated to secure talent. Increasing payroll expenditure isn’t a sustainable approach to securing new talent, but this is where employee benefits help – especially if your business can communicate the monetary value.
Additionally, 74% of employees claim that an organisation’s employee benefits package is important when considering a job offer.
Future-Proof your Business with Employee Benefits
We’ve already touched on the concept of there being up to four generations working together, but guess what? Gen Z is just around the corner.
“This class isn't confusing fun perks for benefits. Instead, they're looking for employers to help champion their quality of life holistically — including [employee] benefits for financial, physical and mental wellness. While previous generations grew accustomed to office ping pong tables, this generation is craving offerings that represent an investment into their personal lives outside of work.” Laura Coccaro, Chief People Officer, iCIMS
The financial, physical, and mental wellbeing employee benefits covered in this article tick the boxes for Generation Z – the workforce of tomorrow – improving their quality of life in the workplace and beyond.
Financial Education
In addition to the financial wellbeing benefits listed, Gen Z may also need financial education, with some being new to managing budgets.
As well as allowing employees to access wage withdrawals ahead of payday, track their earnings as they work, and build up savings direct from their pay, our Financial Wellbeing App allows employees to chat with qualified financial coaches, check their financial health score, and more!
Why Choose Sodexo Engage as Your Employee Benefits Partner?
We measure our success by yours!
To date, we work with over 5,000 customers to support employees and consumers with their financial, mental, and physical wellbeing.
In a 2022 survey, 84% of our clients said we are providing relevant solutions to support the wellbeing and engagement of their employees, 90% said they trust Sodexo Engage to listen and support their needs, and 84% said we bring solutions that contribute towards their employees’ wellbeing and engagement.
Arrange a call with one of our employee wellbeing and engagement experts to discover how we can empower your people and boost your business.
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* Retailer discounts vary.