Employee Engagement and Benefits: What, Why and How
Employee Benefits and Engagement:
Did you know that 98% of employers recognise the importance of raising awareness of employee engagement with benefits and/or wellbeing?
As a business, if you appreciate the positive elements of employee engagement in your workforce, especially after the last couple of years, employee engagement is a crucial part of the success of your business. Making sure you not only appreciate and support your employees but provide them with the best quality benefits package is bound to improve all areas of your business – as highly engaged teams show an incredible 21% greater profitability.
Why is employee engagement important?
As employers you have probably been told it is important to work on employee engagement, however, this concept can be difficult to understand, as many people do not know what employee engagement looks like.
A lot of elements encompass employee engagement, such as how happy employees feel at work, how connected they are with you as their employer, but also their peers and how recognised and appreciated they feel for their contributions. As when employees are truly engaged, teams are more productive, and outcomes turn into achievements and challenges to opportunities.
The benefits of employee engagement
Benefits of employee engagement come with a variety of rewards, as well as enhancing the overall total package for the employee there will also be larger benefits for your workforce, yourself as an employer and your business.
Although there is a long list of potential benefits, we have collated a list of 5 benefits to help you understand what employee engagement looks like.
Better team performance and employee engagement benefits the larger team overall, as engaged employees are found to perform at a much higher level and when this is done by the whole team, the team, therefore, performs at a higher level as employee morale can be contagious!
If your team members are surrounded by motivated, dedicated, and driven colleagues they are more likely to genuinely engage more with their role.
1. Increased employee productivity
Engaged employees = Increased Productivity.
Engaged employees like what they do and find their work meaningful.
A recent report by Gallup states that businesses with a high employee engagement score 17% better on the productivity scale and overall, this can produce brilliant results as better-quality services and products are likely to be delivered by your organisation.
2. Higher employee retention
All employees start a new job excited about this new opportunity, however, unfortunately for some employees this can change after they start their relationship with their employer.
According to the What People Want Report prepared by Hays, many employees have one eye on the door. The findings are staggering, as shown:
81% of the 2,000 professionals surveyed were open to considering other jobs
71% of those surveyed would accept less money to work in their ideal job
47% of people are actively looking for another job said that company culture was the primary reason
The way to make sure this is not the case for your employees is by making sure they are engaged in their work and feel like their contribution is making a difference. People want to stay where they’re happy and happy people work hard.
3. Lower risk of burnout
Burnout takes months or years to develop, but once it does the affected person is likely to need professional help to deal with its symptoms.
When your employees reach this point, it is not only bad for them but your team and the wider business. But there is a way to avoid this - keeping your employees engaged with their work and monitoring their wellness means they are likely to be at a lower risk for burnout.
4. Lower employee absenteeism/ Presenteeism
Whilst a few absences such as illness and unforeseen events are appropriate, repeated absences can be a result of dissatisfied and disengaged employees. It can also hinder the productivity and performance of the employee who is frequently absent and the team around them, which in turn can start to affect the company’s bottom line.
To resolve this issue, you need to look at the satisfaction, motivation and engagement of your staff. Did you know that improving your employee engagement can bring up to a 41% reduction in absenteeism and presenteeism! Solve this issue today!
Employee benefits are a highly beneficial way to both attract and retain employees whilst contributing towards improving their mental, physical, and financial wellbeing and encouraging and recognising behaviours, achievements, and skills.
However, it is important to make sure the benefits you offer are the benefits your employees need which is why a lot of businesses adopt a bundle of mutually supporting financial and non-financial benefits that align with both your business and your employees.
Types of benefits
The main benefits UK employers offer to their employees usually depends on their grade, location, and occupation, but they are typically as follows:
These are widespread due to legal requirements and are usually one of the costliest parts of the benefits packages.
Holidays and time off:
Although employers are required by law to offer paid annual leave, surveys undertaken by CIPD show that many employers offer more than the minimum and the same is said for time off, where many employers often provide more generous time off arrangements than those required by law.
This ranges from eyecare vouchers, death in service, occupational sick pay, free flu vaccinations, programmes to encourage physical fitness, dental care etc. If you are considering healthcare as a benefit for your employees, at HR:4UK our preferred partners will be able to find the best solution for you and your employees.
Employee discounts and rewards schemes are highly effective and can bring a lot of benefits to your workplace, whether you want to add an employee discount scheme to an existing package or have a discount/rewards service as a standalone perk, it will have a positive impact within your workplace.
A discount/rewards package provider that we recommend is Fizz Benefits – a platform dedicated to helping your employees save money every day, with market-leading benefits, rewards and discounts - these include retail discounts which cover approximately 98% of all online spending in the UK.
A salary sacrifice is an agreement between you and your employees to reduce their pre-tax annual salary in return for receiving a noncash benefit in the form of goods or services. A common form of this is through childcare, healthcare, transport, and pension contributions.
The impact of salary sacrifice schemes benefits both employers and employees alike: with Employers making savings on their Employer National Insurance contributions and with Employees savings: Basic Rate tax payers will save 13.25% of the contribution sacrificed with Higher & Additional Rate tax payers saving 3.25% on the contribution sacrificed. Employee tax is also reduced with Higher & Additional Rate tax payers gaining immediate full tax relief which could be used to maintain entitlement to child benefit or could be used to restore personal tax allowance for higher earners.
There are a range of salary sacrifices such as:
Cycle to work:
The general concept for this scheme is your employee hires a bike for a specific time period under agreement, the bike must be owned by you or a third party. This process can be simplified by your employee dealing directly with the scheme provider. At the end of the hire period, your employee can choose from the following options:
- Enter into a new agreement to rehire the bike
- Buy the bike from the scheme
- Give the bike back
Like the cycle to work scheme, this is when employees sacrifice an amount of their salary each month in exchange for a brand-new lease car. This is a set monthly figure which includes extras that come with car ownership such as road tax, insurance, servicing, and maintenance.
Employees who take part in a workplace pension scheme must contribute a minimum of 3% employer contribution – though as an employer you can choose to contribute more.
An option that we recommend is to increase contributions through a salary sacrifice pension scheme. A salary sacrifice pension is when an employee ‘sacrifices’ a part of their salary so that their official level of pay is lower, in exchange for other benefits in this case a pension. There are a couple of benefits to salary sacrifices that promote this as a brilliant option:
- Grows your pension pot faster
- Extra pension tax relief
- Saves on income tax and NI contributions.
If you’d like to know more about pension salary sacrifices, get in touch today and speak to a member of our payroll team to learn more.
Key points for employers:
If you want a high-performing team, employee engagement and benefits are crucial.
If you choose to put the healthcare, salary sacrifice and benefits schemes into practice – your team will thrive as a result.
As a business, you need to focus on the development of the individuals that work for you and employee engagement is a strategy that is well worth the investment. As shown in a recent report by AON, 98% of businesses have agreed they are responsible for influencing their employee's health and changing behaviour.
This is why we recommend engaging your employees and providing the best working environment and benefits for them. These benefits need to be accessible, visible, easy and all in one place.
HR:4UK can help you with a number of the options identified in this article, including the discount provider Fizz Benefits, healthcare provider and any questions surrounding pensions.
Let us work with you, connecting your employees to services we highly recommend.
If you need any further information or assistance, we are always here to help – contact us today either at firstname.lastname@example.org or call us at 01455 444222 and speak to one of our friendly expert advisors.