Finding the right employee benefits package in difficult times
People are at the heart of every business, particularly smaller enterprises, writes Lee Thomas of Pangea Life.
The right employee benefits package can be vital to keeping the lifeblood of your business, its people, healthy and financially secure. And it shouldn’t be forgotten, that in most small businesses, the owner is a key employee too. The business relies on them and they, in turn, rely on the business for their, and their family’s own financial well-being.
With the current cost of living crisis, an under pressure NHS, the rise in mental health issues and the ever increasing challenges of recruiting and retaining talent, it’s probably never been more important to make sure you protect you, your business, your family and your employees.
FINANCIAL SECURITY
Most people are more vulnerable to financial shocks than ever before.
A recent study by Legal and General (Deadline to Breadline 2022) reveals some shocking statistics about the UK workforce’s financial fragility:
- Based on their actual savings and spending patterns, the average UK worker is just 19 days from the breadline.
- 60% of households have less than £5,000 in savings. 37% have less than £1,000 with 16% having no savings at all.
- Nearly 2 million adults have no money left at the end of each month – a rise of 330,000 since 2020. For those who earn under £20,000 per year (5 million people in the UK), the average household has no financial safety net if they lost their income.
So, the question is, how long would your savings last, or how long could the business afford to pay you, or an employee, if incapacitated?
If you could only afford to pay Statutory Sick Pay (£99.35 per week), particularly for a long period of time, the impact on an employee and their family could be devastating. We need only look back a couple of years to remind ourselves of the difference the furlough scheme made to people’s financial stability.
"This is why, if you can do one thing for you and your team when it comes to employee benefits, it’s to have sick pay insurance"
Group Income Protection
It’s a simple policy that allows you to insure payroll costs, so you can continue to pay yourself, or an employee.
The policy covers:
• Up to 75% of their salary (including, if you choose, bonuses and dividends)
• Employer National Insurance Contributions
• Employer and employee pension contributions.
The policies don’t just provide financial protection either. With these schemes the insurers provide rehabilitation services to support the employee’s recovery and return to work, as well as a range of other well-being services for them and their family, including access to a virtual GP service and counselling.
Group Life
Alongside ill health and injury, the other event that can obviously destroy a family’s finances is the death of a spouse/parent. Many families still have no life insurance in place, and of those that do a large proportion have only enough cover to clear the mortgage on their home.
You may find it quite an eye opener to ask your employees how they would cope financially if they couldn’t work, or how would their families survive financially if they died.
Another simple and very affordable employee benefit is group life insurance. You can insure you and your employees for a multiple of their income (between 1 to 12 x), so should the worst happen, a tax-free lump sum benefit is available to the family. This may not resonate so much with a young, single, mortgage free workforce, but it can certainly give a lot of comfort to those with who are the main bread-winners with a dependent family.
GOOD HEALTH AND WELL–BEING
At a time when there is mounting pressure on the NHS, with 6.73 million people waiting for treatment in England, private health insurance can offer a much-needed route to treatment when you, your staff or your family need it. This is particularly relevant to small businesses where everyone is crucial and you can’t afford for anyone, including yourself, to be off work any longer than necessary.
And private health insurance isn’t just about solving a problem once it’s happened. It’s also about prevention. The right cover can embed a culture of well-being and will provide early intervention services to stop a small problem growing to an unmanageable one.
"The right benefits are a clear manifestation of the genuine care you as a business owner have for the well-being of your team. Small businesses can often feel like a family, not just a group of employees"
So ask yourself:
- If a member of your team died, would you be at their funeral and if so, would you want to be giving more than just your condolences to their family? How about enough money so their family would be financially secure for a number of years?
- If a valued employee was struck by serious illness or injury and couldn’t work, would you be happy to have them get nothing more than Statutory Sick Pay knowing the financial stress that would put them in, or would you still want to pay them?
- If they were suffering and needed medical attention, would you want them to get treated as quickly as possible rather than just sit on an NHS waiting list for months or even years?
Now more than ever, knowing that financial security and access to treatment will not be additional stresses no matter what fate deals you or a valued employee, is the pinnacle of an employee benefits package.
For more information contact us on 02382 354 354 or [email protected]
