What benefits should I offer?

Before choosing a scheme, consider the benefits you want to include. They fall into four main categories: retirement benefits such as pensions; medical cover such as health insurance or enhanced sick pay; life insurance; and practical benefits such as contributions to childcare or loans for travel season tickets. Don’t overlook the last category as it can be a major recruitment tool and help you get the best range of candidates.

Am I following the law?

Seek expert advice on what if any benefits you are legally required to offer and make sure these are part of any scheme. The main one is automatic enrolment in a workplace pension with employer contribution.

Should I use a supplier?

In theory you could administer employee benefits in house, but it’s rare this will be the best option. Using an external supplier to run the scheme means you can benefit from both their expertise and economies of scale.

What types of scheme can I choose?

The main differences between different schemes are the choices on offer to your staff. For example, you can offer a core package that’s the same for all staff, or flexible benefits where staff have more options about which benefits are most suited to their needs. You can also choose between paying for the benefits yourself or offering voluntary benefits where employees pay for the benefits themselves (assuming they want them) but get a discount through the scheme. In some cases the costs can be deducted from gross salary bringing tax advantages.

What about data security?

If you’re using an external company to run an employee benefit scheme, don’t be afraid to ask tough questions about how it will store and process your employees’ personal information. Remember that even if any breach is the fault of the company running the scheme, your employees may still feel you’ve let them down.

What’s the cost and how is it calculated?

Crunching the numbers is important here. Rather than simply looking for the lowest number, you should take into account three factors. One is the actual cost to you of providing the benefits, not forgetting any tax implications. The second is the service costs you pay to the company administering the benefits, whether this is worked out as a flat-rate, a cost per employee, or a percentage of the sums involved. Finally, you’ll need to try to account for less tangible effects such as medical insurance reducing absenteeism.

How does the communication work?

Always ask a potential employee benefits provider how they will communicate both with you and with your employees. Employee benefits can feel confusing, so clear explanations will help reassure your staff that they are getting a good deal – and indeed that you really are making them better off.