Minimising employment costs and maximising reward

Hiring and retaining talent is one of the biggest challenges faced by businesses. How can companies maximise employee benefits and rewards without breaking the bank?

A roundtable staged by TheBusinessDesk.com explored a host of innovative employee rewards and incentives from inhouse leadership academies, flexible working and holiday saving schemes to fresh fruit and even a staff bar. And while the rewards vary from company to company, all agreed that businesses need to bear in mind the needs of all its employees and not adopt a one shoe fits all policy. They also stressed the importance of communicating these benefits to employees.

The roundtable was chaired by TheBusinessDesk.com’s joint managing director Alex Turner and sponsored and hosted by Forvis Mazars.

Opening the debate on the difficulties of hiring and retaining talent was Julie Roberts, financial director at Bradford-based chemical manufacturer, Christeyns.

She said “We are recruiting, and looking for good people is time consuming and expensive. After Covid competition for staff was intense and it has settled down a little but there’s been a significant shift in employee demands. Now, the first questions I often get asked when interviewing are ‘do you offer flexible working? ‘Can I work from home?

“We have a policy where people must be in the office two days a week and those days are flexible. The things that the younger generation are asking for are very different, and we must consider these if we want to recruit and retain the best talent.”

But what about those companies that either cannot or will not offer hybrid and flexible working as a perk of the job, after all it can be an extremely attractive benefit.

Tom Mather is group finance director at Leeds-based LNT Group where there is no hybrid working which, says Tom, can impact the talent pool. However, he adds it is more about the bigger picture and career development.

He said: “One of our top priorities is hiring the right talent. We wanted to become an employer where we were attracting talent and not fighting for talent. For us, it’s all about where can our employees’ careers go at LNT?  What can we offer them? For example, we created the LNT talent finance academy which has helped draw in people at all levels from graduates to quite senior staff.”

While salary is often a top priority for people, would-be employees are also attracted by a host of non-cash perks and rewards. Many of these have tax benefits for the company and go a long way in recruiting and retaining staff.

Tom said: “We’ve financial incentives and reward schemes at LNT, but in terms on non-cash benefits we wanted to give our employees the best possible office environment. We invested heavily in refurbishing the office and have now got a state-of-the-art gym, staff bar, massage room. There are also things like darts, table tennis, snooker and we have a box at Leeds united which we give to staff throughout the season.”

Justin Balfour, financial controller at Mac’s Truck Sales, said: “The pound in their pocket does drive some people particularly in challenging economic times. We recently did a salary comparator for recruitment purposes and found that we’re not most competitive.

“Staff recruitment and retaining talent is paramount, but we also need to keep an eye on the bottom line and costs down. So, we are now looking at enhancing our employee benefits package. We are working with a consultant and looking at things such as salary sacrifice which, in a previous company I worked for, the savings made from the scheme paid for private healthcare for employees. There is also the death in service benefit which is a relatively inexpensive thing to put in place but can make a huge difference.”

For many employees it is often the little things that can have a big impact, and for employers, there are some easy wins, for very little cost and have additional tax benefits.

Chloe Ellis, tax partner and head of UK tax advisory services at Forvis Mazars, said: “As part of a review, we asked one workforce what the company could do that would make a difference to them. It turned out that the business was charging 15p for a cup of coffee on the shop floor. After the feedback, they stopped charging workers for the coffee. It cost the company nothing really to do that but had a major impact on worker morale.  It is important to understand what employees want and what motivates them.”

Julie agreed: “We regularly ask for feedback from our employees and get a lot of ideas from the business improvement meetings which are held in each department once a month. As a result of those, we always have fresh fruit available for everyone. Even the HGV drivers, they’re there early on Monday mornings and then set off with a truckload of bananas for the week ahead, which is fine, because we don’t want them to miss out.

“Elsewhere, we had one lady who said the table she was using to label bottles was the wrong height. We had a table built for her and she was the happiest person because it was her idea. Sometimes it is the little things that make a huge difference.”

And it can be also the little things that can save a company thousands of pounds by simply ‘thinking out of the box’.

Ian Goodwin, partner – employment tax at Forvis Mazars, said: “We had a client that was giving its employees a £100 gift voucher at Christmas which they have to tax. It’s quite expensive and they didn’t want the employee to pay. But if they gave them £50 at Christmas and £50 on their birthday both are tax free. So just doing something simple like that saved the business thousands of pounds in tax.”

Ian also recently implemented a holiday sacrifice scheme where employees can buy a holiday.

He said: “It wasn’t to buy annual leave but to buy a holiday. For example, if someone wanted to buy a holiday to Disney World for £10,000 in two years’ time they would sacrifice that amount from their pay. It spreads the cost for the individual and saves national insurance for the employer in the period where the salary sacrifice is taking place. It may be more cost deferral, rather than saving of national insurance, but it can be a great help both parties.”

Chloe said the wants and needs are certainly different for people across the generations, but communication of the rewards and benefits on offer is essential.

She said: “If someone is approaching retirement age, then pension contributions are very important but perhaps not so much so for someone younger.  It is certainly not just one package for everyone, but I think the most important thing comes down to communicating what is on offer and how employees can benefit both in the short and longer term.”

Ian added: “Some of the other things that have been mentioned like the Leeds United box for example, while there is an obvious tax benefits in terms of staff entertainment, businesses are paying quite a lot of money for these kinds of reward there. It is important they communicate this to staff to demonstrate the time and resource that are being invested to provide these rewards.”