Monday, March 30, 2009
In a climate of global economic uncertainty senior executives up and down the UK are asking the question; "How can we save money?” Many are using the uncertainty to reduce their workforce or their training and development budgets; freezing pay and revisiting 'company perks'. With unemployment currently at two million and rising1, many of those who do have a job are worried about keeping it and hunkering down until things get better. Who needs company benefits if motivation can be achieved by the simple threat of redundancy?
Can you achieve employee motivation, increase productivity, make financial savings and protect and increase profits by simply threatening redundancy?
The fear of losing your job can concentrate the mind wonderfully, but does it concentrate the mind in the direction the company wants to go? Does it work for the employee who knows they are performing well and whom you want to keep and engage?
If you wish to make change successful then you need to carry your best talent with you. After all, it’s your staff who will be implementing the change and your staff who will be living with and bring you through the change. With your staff motivated you will be able to emerge from the recession leaner, fitter and better placed for when the upturn comes.
Company benefits are an additional tool available to motivate your staff. Your staff see company benefits as a commitment to their welfare, even when times are tough. Employees undoubtedly become distracted by uncertainty, at a time when you need them to be at their most focused. Their feelings can affect their efficiency and productivity, key factors that will enable you to get through the uncertain economic conditions with success.
Company benefits are not all about time and expense. You can save money by focussing on the HMRC approved schemes that not only allow employees to save money in the form of Income Tax and National Insurance Contributions (NIC) but also allow you the employer to save money on employer NIC and in some cases VAT also.
During these tough economic conditions we believe that the introduction of HMRC approved salary sacrifice schemes can benefit you and your employees in more ways than just financial. By offering such benefits you can successfully motivate your staff whilst offering them quantifiable financial savings and at the same time saving your company money. It’s a win win!
For example an employer with 1,000 employees who offers a Cycle to Work and Childcare Vouchers scheme can expect to save £1,674 a month, or £20,096 per year in employer NIC. This is in addition to the savings that would be made in reduced staff turnover and recruitment fees. Savings could rise to thousands of pounds depending on the size of your organisation!
Top tips for your benefits
Introduce a selection of HMRC approved salary sacrifice benefits such as childcare vouchers, cycle to work, computer training, green car leasing scheme and, bus travel to name just a few. All these benefits could save your staff tax and NIC whilst you as an employer can save employer NIC and possibly even VAT.Review your current benefit offerings and check you are getting the best deals.Maximise impact by having all your benefits in one place to focus your employee’s minds on their total package.Communicate your benefits in an exciting and innovative way to maximise take-up.What you need is company benefits that deliver motivation to your staff, saving them and you money.
Manesh Patel
Manesh Patel is Head of Client Implementation at You at Work. Manesh has implemented employee benefits schemes for clients including Coca-Cola Enterprises, Nestle and British American Tobacco.
You at Work helps organisations improve their employee engagement through benefits and communication. You at Work has helped more than 300 organisations – ranging from 50 people to 100,000. Their relevant, targeted and professionally communicated range of benefits help their clients get more out of their employee benefit programmes.
Employers wanting to find out more about how You at Work can benefit their company’s employee benefits should call 020 7699 5410 or email choose@youatwork.co.uk
1 Source: BBC website 12.03.09