Being an employee is not just about doing your job and getting paid in return for the hours spent. In addition to payment, all employees are entitled to benefits. These benefits are critical in not just shaping a happy and productive workforce, but also in attracting and retaining talent. This would ultimately lead to the success of your business. Including incentives can be vital for maintaining this success.

What are employee incentives and what should employers consider?

Employee incentives or benefits are essentially rewards (monetary or non-monetary). These are given to employees alongside their usual wages to support them during their work lives and beyond. As an employer, you are legally required to provide a number of statutory benefits to your employees. These requirements include a workplace pension with minimum employer and employee contributions, holiday pay, statutory sick pay, and maternity and paternity leave pay. Other benefits may be contractual or discretionary. Whilst many SME owners may be concerned about offering employee benefits due to the costs involved, many employees now will choose their next role based on the benefits an employer is able to provide. Possible discretionary options an employer may choose to provide include dental care plans, private medical insurance, discounted gym memberships, and childcare vouchers.

Why should SMEs offer discretionary benefits?

There are numerous positive impacts of offering employee incentives, which include but are not limited to the following:

  • Improving employee retention and reducing staff turnover: Employee retention is one of the biggest challenges faced by recruiters. For instance, 50% of millennials expect to leave their current job within three years. High staff turnover is particularly costly for SMEs as they may need to spend a large portion of their budget on recruitment. High staff turnover may also mean you struggle to attract and recruit talented individuals. We would recommend investing in a robust and attractive set of benefits to avoid churn and high recruitment costs. Speak to an employee benefits provider that specializes in supporting SMEs to see what the minimum package is that could be offered.
  • Reducing stress and associated sickness absence: Offering attractive benefits to your employees which help support their mental and physical health is a win win for SMEs. It demonstrates that you care about your employees’ happiness and wellbeing. In this post-pandemic era, employees increasingly value the importance of a healthy work-life balance. Therefore, implementing flexible working options is another win for SME owners to consider.
  • Increasing staff performance: Keeping employees motivated is crucial in creating a productive workforce. A number of studies have shown that offering employees the simplest benefits can increase productivity and boost their morale. In an increasingly competitive job market, it is also essential that your business invests in and supports your employees’ career development. Having clear and achievable goals means you will place your staff in a position where they are likely to succeed, for your business but also personally.

5 examples of incentives for SME employees

Businesses that focus on their employees are likely to succeed in the long term. Offering a robust benefits package can be an indicator of a successful business. Here are some benefits you could offer at a low cost or even for free:

  1. Create an environment allowing for flexible working: Creating a flexible working environment could help boost your employees’ productivity and reduce anxiety, as well as allowing them to focus on their personal lives. Where SME owners have not done so already, an increasing number are considering implementing a remote or hybrid working approach. In fact, 43% say that their long-term plan is to allow employees to work ‘from anywhere’.
  2. Increase annual leave: Although increasing annual leave may be costly for many SMEs, it can be an effective way to improve retention and productivity. An increase in annual leave doesn’t have to be large. Examples you could consider are giving a day off for birthdays, adding the time off between Christmas and New Year, and ensuring you offer lieu time when employees work extra days or hours. You could also build in an extra day per year of service which may encourage employees to stay on.
  3. Offer a wellness package: Offering health-related benefits would likely amount to fewer sick days. Possible schemes you could implement are fitness challenges, 15-minute yoga sessions or hosting social events to allow employees to get together. Offering health-related benefits could amount to fewer sick days. There are many options available aimed at SMEs which include online wellbeing support, self-service packages of fitness, and access to one-to-one mental health support. It will depend on your budget which is most suitable.
  4. Implement healthcare benefits: Businesses that offer private healthcare packages can attract new talent. This kind of benefit can offer subsidized access to private health care, right through to insurance which pays for the total cost of treatment. Access to a virtual healthcare is also a popular option. It allows employees to see healthcare professionals remotely when they cannot get an appointment with their own GP.
  5. EAP: An employee assistance program is often a cost-effective and attractive support package for employees. Generally, an EAP can include legal assistance hotlines, access to mental health professionals, counseling services, and can be used for both personal and professional challenges.

Final word

The employee benefits you chose might depend on the industry and your business’ values. If you have a small team, consulting with them as to what benefits they might find the most useful for their circumstances may be a positive step. Employee incentives are valuable in inspiring satisfaction and commitment. Whatever benefits you put in, make sure that you have robust policies in place to ensure they work as you want them to and keep your team informed. Have you checked your staff handbook recently?