Being an employer of choice is something that has been a focus of this article in previous years, but with recruitment and retention challenges in some sectors currently at unprecedented levels, there seems real value in clearly showcasing exactly what is being provided beyond salary.
Flexible working seems to have been swallowed by “hybrid working” but, for the majority, we can all assume it's similar and ultimately a potential recruit won’t be that concerned by terminology; most will simply want to understand what it means to them personally.
Even prior to the pandemic, choice of hours and work locations had started to become more of a priority to some than “traditional” benefits such as, “what multiple of salary will be paid to my family if I die?”
For some, being able to work from home even a few days of the week is so much more valuable. Therefore, it’s unsurprising to learn that, after the inevitable question(s) around salary, working expectations is the next most common question that HR professionals are now asked during the recruitment process.
Attracting Top Talent
In some sectors there is a real shortage of quality employees at the right level. In addition, the job market is currently very much a mover’s market. So, what can employers really do to stand out?
A great place to start is gaining a full understanding of their own benefit package, and having the ability to then sell the value of it.
An effective way to do this is through bringing the benefits to life for a potential recruit, rather than simply listing what is available. Employee assistance prorgammes (EAP) have been incredibly useful to employers and employees across the country in the last couple of years. However, seeing EAP listed in a summary of benefits provided by an employer might not excite, or mean very much to someone reading the list cold. However, using real (anonymous) examples around areas like counselling through a difficult period, or legal support regarding the estate of a family member can help people visualise the value of this benefit.
Another tool that companies can use, especially if they provide a good range of benefits, is Total Reward Statements. Many employers will have an online portal that provides this as part of the standard technology, but it doesn’t have to just be those larger organisations or those with much higher benefit spend that can provide these details. Over the last year we have carried out numerous projects for smaller employers. With the right data and a good project plan this is something that can realistically be delivered for any size of employer, and can be a great way to emphasize the true value of all pay and benefits provided.
Understanding and being able to put context on the benefit is added value above just the monetary cost/ value. For example, if the Private Medical policy you provide is Medical History Disregarded (MHD), this can be incredibly attractive for an employee who has had previous health conditions and knows they wouldn’t be covered on a policy if they have to go through a medical or underwriting. When discussing the numbers an emphasis should be made on what the cover means to an individual. Using real examples of the benefit in action can help to explain the true value here, it doesn’t have to be person specific, it’s the concept and understanding that’s important.
Not much changed in the recent UK budget for pension savers in the UK but one area that will be getting a lot of press is Salary Exchange/ Salary Sacrifice/ Smart Pension. I have listed a few titles as there is a fair bit of industry jargon. The introduction of the new Health tax, basically being run as an increase to NI in the 2022/23 tax year and then as a separate payroll component from 2023 onwards, means that there has never been a better time to look to implement Salary Exchange scheme. This approach helps make pension savings more tax efficient for both employer and employees.
Employers who already operate these schemes could find a way to emphasize the value provided to their employees by having their pension contributions done in this way. The initial communications when the scheme was set up, probably tried to put some generic annual cost savings into context but it is a real benefit and should be re-communicated as such.
Looking ahead, I would like to highlight the recent comments from the Treasury and UK pensions Minister, that stated their full intention to move along with the recommendations made for auto enrolment schemes, by the mid-2020s. Some of the changes won’t mean much to many employers, perhaps other than the youngest age to auto enroll moving down from age 22 to just age 18. However, many other employers may want to start considering the additional cost burden they will face. The removal of the lower earnings limit will mean that companies using the ‘Qualifying Earnings’ basis for their pension contribution will have to start paying their percentage from the first pound of earned income, rather than the current situation where nothing is paid on the first £500 per month.
For an employer using qualifying earnings, this additional cost will be over £180 per person annually, so if they have 800 employees, that will be an additional annual costs of £144,000. We might be only two or three years away from this change so something for employers to consider!
Richard Petrie leads AAB’s Employee Benefits team, specialising in providing an extensive and diverse employee benefits consultancy service. The team offer end to end whole of market solutions from the initial planning and advice stages through to the recommendations and successful implementation.
This article featured in Thorpe Molloy McCulloch Recruitment’s 2022 Salary Guide – view here.