In today’s dynamic labor market, where companies are striving to attract and retain the best talent, a competitive salary is undoubtedly important. However, a well-rounded benefits package that goes beyond the numbers on a paycheck is the game changer.
Employee benefits can have a significant impact on your business success in any country, including in the UK. For example, a good benefits package can improve workplace morale, boost productivity, and reduce staff turnover.
Unfortunately, only 40% of UK employees are happy with their benefits, according to a CIPD survey. So, which UK employee benefits make for a good benefits package? What will make a real difference for your business and keep your team satisfied? Let’s find out.
Pension Schemes
In the UK, employers are required to provide a pension scheme to all employees who:
- Are classed as ‘workers’
- Are between 22 years old and the state pension age
- Earn £10,000 or more per year
This is referred to as automatic enrollment, and as an employer, you must contribute at least 3% of the employee's earnings.
There are various pension schemes available, and it’s up to you to select the one that best meets your company’s needs. The most common type of pension scheme is a defined contribution scheme. In this scheme, both the employer and the employee contribute a set amount of money each month, which is then invested. The employee’s pension is then used to provide an income in retirement.
The defined benefit scheme is another type of pension scheme. With defined benefit schemes, the employer promises to pay the employee a set amount of money in retirement, regardless of how much money is in the pension pot. Defined benefit plans are becoming less common as they are more expensive for employers to implement.
Pensions are an increasingly important employee benefit in the UK. As more than 30% of UK working adults are concerned about their financial health, a solid pension plan can help alleviate some of this burden. Also, employers who do not offer their employees a statutory pension plan may face a penalty from the UK government based on the number of employees who are not offered this benefit.
Healthcare Benefits
There is no statutory requirement to provide healthcare benefits to employees in the UK since they receive healthcare under the NHS. However, providing them comes with numerous advantages, such as fostering a positive company culture and increasing morale and work efficiency. In fact, 55% of employees surveyed by Clutch highlighted health insurance as the most important benefit in terms of job satisfaction.
Healthcare benefits are popular among employees because they provide access to things like specialists and private hospital rooms. If you have employees in the UK, you can offer a variety of healthcare benefits, including:
- Private medical insurance: This gives employees access to private healthcare providers, such as private hospitals and clinics with shorter wait times. More elective procedures may also be covered by this insurance.
- Dental insurance: This type of insurance helps in the coverage of dental care costs, such as checkups, cleanings, and fillings.
- Vision insurance: Employees can use this insurance to cover the cost of vision care, including eye exams and glasses.
- Health savings accounts (HSAs): With these accounts, employees can set aside money on a pre-tax basis to pay for qualified medical expenses.
- Flexible spending accounts (FSAs): These allow employees to set aside money for qualified dependent care expenses on a pre-tax basis.
- Employee assistance programs (EAPs): The programs give employees access to confidential counseling and support services.
- Wellness programs: These programs offer employees resources and support to help them live healthier lives, for example, gym membership.
The more healthcare benefits you provide, the better, but the specific benefits your company offers will vary depending on your company size, industry, and employee needs.
Sick Pay
The UK government requires employers to provide a minimum amount of Statutory Sick Pay (SSP), which should equal £109.40 per week for up to 28 weeks. Sick pay is an important benefit for employees because it allows them to take time off without fear of financial hardship.
Although it’s not required by law, many employers also choose to offer their employees additional sick pay. The amount of this extra pay is determined by several factors, including:
- The employee's length of service
- The employee's earnings
- The employee's contract of employment
- The employer's sick pay policy
However, it’s not uncommon for employers to offer employees 100% of their salary during sick leave. In addition to statutory and additional sick pay, employers may provide their employees with other illness-related benefits such as:
- Paid time off for doctor's appointments
- Flexible working arrangements
- Employee assistance programs
- On-site healthcare
Again, these benefits are not legally required, but they are a great way for employers to demonstrate their appreciation for their employees, which is likely to lead to a more engaged workforce.
Holiday Pay
UK employees are entitled to statutory paid holiday. This means that employers are legally required to provide their employees with paid time off, which is set at 5.6 weeks per year.
Employers are not permitted to require employees to work on statutory paid holidays. If an employee does work during their time off, they are entitled to be paid for the time worked.
It’s common for employers to offer additional paid holiday that goes beyond the statutory minimum. This is excellent for distinguishing yourself from the competition and attracting more 'A' players to your team.
Paid Maternity and Paternity Leave
UK labor law requires employers to provide statutory maternity and paternity leave to eligible employees. In most cases, this is someone who has worked for an employer for at least 26 weeks before the ‘qualifying week.’ Employees who qualify for maternity leave can take up to 52 weeks off, while those who are eligible for paternity leave get one or two weeks of leave.
During this time, statutory maternity pay is calculated as follows:
- 90% of an employee's average weekly earnings (AWE) before tax in the first six weeks; and
- The lesser of £172.48 or 90% of an employee’s AWE for the remaining 33 weeks. The final 13 weeks are unpaid.
The weekly statutory paternity pay is the lesser of £172.48 or 90% of the employee’s AWE. Maternity and paternity benefits allow employees to focus on taking care of and bonding with their children without worrying about work or earning money. This can result in several benefits for the employee, as well as for the employer. These benefits include:
- Reduced stress
- Improved mental and physical health
- Increased productivity
- Reduced absenteeism
- Improved morale
In addition to statutory maternity and paternity benefits, employers may provide their employees with other pregnancy and childbirth-related benefits such as:
- Paid time off for antenatal appointments
- Paid time off for childbirth
- Flexible working arrangements
- On-site childcare
- Adoption support
Although these benefits are not legally required, they will go a long way toward creating a work environment that prioritizes excellent employee experiences.
Providing the Best UK Employee Benefits
Offering the right benefits to employees in the UK can give you a competitive edge in the business world. But setting up and maintaining these benefits can get complicated, especially if you also have to deal with benefits for team members in other countries. RemoFirst handles the heavy lifting of providing the right benefits to a global team, allowing you to focus on growing your business.
With RemoFirst, you can take care of your employees all over the world, offering everything from financial benefits and equipment provisioning to personalized, private healthcare insurance with some of the best coverage available. Check out this country guide to learn more about how RemoFirst simplifies workforce management in the UK.
