A majority of small and medium sized firms (SMEs) in the UK are looking to increase the benefits they offer staff over the next two years as they focus on retention and recruitment, new research shows.
In a survey of 508 senior managers at SMEs, MetLife UK found that 57% plan to expand their employee benefits package – with one in four (24%) planning a "significant" increase.
Companies employing between 100 and 199 staff are the most likely to significantly increase benefits, with 27% saying they will offer new benefits compared with just 19% among businesses with 200 to 300 staff.
Thinking about the type of benefits they are likely to add, 19% of SME senior managers said benefits which specifically address health and wellbeing would be their first choice. Another one in 10 (11%) said they would like to see benefits which are suitable for employees who work from home.
"SMEs are very much focused on retaining and recruiting staff and increasingly recognise the role that a well-designed benefits package can play in addition to salary," explained Adrian Matthews, employee benefits director at MetLife UK.
"Smaller employers are already competing for staff with large corporates on pay and business profile and may struggle to attract and retain skilled employees if they cannot offer the benefits that many now expect at work.
"Group life and group income protection are benefits that employees value and cost much less than employers often think, for example around 0.5% of salary for income protection and 0.2% of salary for life."
For more than one in four (27%) of those surveyed, benefits play a major role in engaging and motivating their employees while 24% said that regularly communicating with staff about their benefits package helps with driving engagement.
In a separate study released last year, MetLife UK found that 60% of employee benefit consultants (EBCs) believe increasing SME take-up of employee benefits is the industry's biggest challenge, with flexible and voluntary benefits offering the most potential for growth.
Four in ten brokers (39%) also said that better communication of benefits within SMEs is needed.
Adrian Matthews commented: "Well-tailored benefits that are well-communicated can make a significant difference to SME staff retention and employees will welcome support in improving physical health and wellness as well as financial wellness in the workplace."
Matthews pointed out that fast-growth businesses such as those in the technology sector can grow from two to 200 employees in months rather than years, rapidly going from a ‘no benefits’ environment to needing to provide benefits.
He added: "One of the issues preventing SMEs from adopting workplace benefits may be the absence of a dedicated HR function or one individual completing multiple HR tasks. The role of the broker or EBC is vital in helping SMEs select the right benefits packages for their growing and diverse workforces."
Do you offer employee benefits that are suitable for small businesses? Get in touch with Outbound Solutions and we'll connect you with decision makers at SMEs that are looking to enhance their benefits package.