Employee benefits: the essential, must-have and nice-to-have benefits

All too often the importance of offering a competitive employee benefits package can be overlooked while recruiting, with the focus being placed on salary alone.

While the financial side of a job offer needs to be right, it is becoming more and more vital to have a well-curated selection of employee benefits which can make all the difference when it comes to securing your ideal candidate.

What are employee benefits? 

Putting it simply, employee benefits are added perks that are given in addition to a wage/salary. These have come about and are offered as an expectation in many instances because salaries are no longer deemed the only reward for work carried out, with a more comprehensive and well-rounded employee benefits package. 

Types of employee benefits can include things such as: private healthcare for the employee (and their family), help towards dental and eye care costs, a company car or compensation for mileage, additional holidays (above statutory), wellbeing provisions e.g. counselling sessions. 

Why are employee benefits important? 

A strong employee benefits package can help you stand out from your competitors in the first instance, and, further down the recruitment process, it can also give you the edge if your prospective employee is weighing up two competing job offers. Additionally, many candidates look for and value certain workplace benefits more than their salary requirements during their job search.

In addition to this, a package which supplements an employee's salary can not only help to attract top talent, it can also boost employee retention: keeping staff engaged and happy. They can also align the needs of the business with its staff, for example having a reward and recognition structure or a clear plan for progression can help employees reach their own goals, which will ultimately lead to business growth.

Below we have outlined what would make a good employer benefits package, highlighting essential, must-have, and nice-to-have offerings that can be taken into consideration. 

Essential benefits

1. Flexible working

Flexible working for an improved work-life balance is now one of the key benefits that prospective candidates keep an eye out for when job hunting, and it is essential that your company offers something to satisfy this demand. Arrangements can be formal, such as providing flexible start/finish times, job-shares and setting days to work from home/office, or they can be informal such as the option to work elsewhere if/when the need arises, or permission to take a longer lunch break in order to get to the gym and back in time, for example.

Being more flexible with employees means that external stressors can be managed much more effectively. You may also see an improvement in workplace happiness, productivity and trust, as well as notice that your staff begin to think independently without a watchful eye over them.

2. Maternity/paternity package

Statutory Maternity Leave is 52 weeks and Statutory Maternity Pay is paid for up to 39 of those weeks. During this time, new mothers are entitled to receive 90 percent of their average weekly earnings (before tax) for the first six weeks, followed by £156.66 or 90 percent of your average weekly earnings (whichever is lower) for the next 33 weeks (correct as of July 2022).

When it comes to paternity leave, GOV.UK states that you can choose to take either one or two weeks, which must be used in one go. Statutory Paternity Pay for eligible employees is either £156.66 a week or 90 percent of their average weekly earnings (whichever is lower).

Employees will also be eligible for Statutory Adoption Leave or Statutory Adoption Pay if they are adopting a child, fostering a child on a permanent basis (fostering to adopt) or are having a child through surrogacy.

Shared Parental Leave (SPL) is also being well-received by employees who can have more choice in how to care for their child/children. Eligible patents can get up to 50 weeks of SPL and up to 37 weeks of Shared Parental Pay (ShPP).

Companies can demonstrate their support and commitment to new parents by offering enhanced pay and leave for maternity, paternity and adoption packages. For example, they can extend the period whereby staff will receive full or a portion of their weekly earnings, permit new fathers to share the parental leave with their partners, and/or allow parents to take their leave over a period of two years.

3. Pensions

As an employer you are legally required to enrol staff onto a workplace pension scheme, you will make contributions based on your total earnings a year before tax. From April 2019, your employer had to pay a minimum of three percent while you pay five percent, taking the total minimum contribution to eight percent.

Currently, to be in receipt of the basic State Pension, you must have paid or been credited with National Insurance contributions. The full basic State Pension is £141.85 per week.

4. Holidays

It is the law for organisations to offer 28 days of statutory paid holiday to full-time employees, this can include the eight bank holidays spread out across the calendar year. However, holidays regularly top the bill for essential benefits that job seekers look out for so it's always worth considering offering staff additional days off. These can be given for birthdays, duvet days and, something we've seen more recently, high temperature days.

You can also look into giving employees the ability to buy extra days should they require them, you will be sure to give yourself an edge against your competitors.

Must-have benefits

1. Health and wellbeing

Looking after your staff’s physical and mental wellbeing is the perfect way to show that you care. Gym memberships (covered entirely or discounted), free healthy food such as fruit, cereal, yogurt and so on, ‘chill out’ zones, ergonomic workstations, and trained Mental Health First Aiders are all great benefits to offer.

Additionally, consider starting a sports team for football, netball or hockey, arranging a countryside walk or creating clubs for book, film, wine or cookery lovers. You could always speak to staff about the things they would like to do to give you some inspiration.

2. Childcare provisions

As previously mentioned, flexible working should be offered to parents to help them manage and create a better, and healthier, work-life balance.

On top of this, there are alternative or additional offerings that can be equally attractive. The government's tax-free childcare scheme is a compelling benefit to would-be or current parents who may be considering their next career move.

Although this is not necessarily anything to do with you as an employer, helping your staff to be aware of what's available to them can be helpful when they return to work.

3. Commission and bonuses

Financial benefits such as annual or quarterly bonuses and commission are a great way to recognise and reward staff for their hard work and dedication. These can be clearly set out and agreed between employees and their managers to ensure everyone understands what is expected of them.

Commission/bonuses can be easily tracked for sales-based roles but if you have other teams you should think about finding ways to offer financial rewards on performance-related targets, this will stop staff feeling isolated from the wider business.

Nice-to-have benefits

1. Private healthcare

Although they may never need it, just knowing private healthcare is available can be very effective in providing peace of mind to your employees. This could include dental plans, travel insurance, occupational health, health assessments and mental health initiatives that extend to a staff member’s immediate family.

Not only will members of staff feel comfort knowing they can access healthcare should they need to, they will also benefit from being offered faster appointments meaning that employees may be able to return to work faster.

Often these packages will include 24-hour GP or nurse practitioner phone lines meaning that employees can speak to doctors out of working hours, if they need to. They may also feel that they are getting more personalised care.

It is worth noting that employees can expect to pay excess for treatment.

2. Financial advice/planning services

Consider supplementing your pension provision with a workplace savings scheme, or offering additional financial education surrounding investments, budgeting, savings and taxation to help your employees’ money work for them.

3. Practicalities

You can help take the pressure off your workforce’s commute by helping them to travel better. Offer free car parking and/or reserved parking spaces, a company car and/or a petrol or diesel allowance. If the space you have available is limited, you could think about setting up a parking rota to give all employees equal opportunity to park.

Alternatively, encourage a more environmentally-friendly commute with discounted public transport costs, cycle-to-work schemes and walk-to-work initiatives. If your staff mostly work from home, or are usually out on the road travelling, then a company laptop and mobile phone can also be a great perk to assist them in working better.

4. CSR initiatives

It is important not to underestimate the value that employees place on being able to give back to their local community or to causes close to their hearts, and your Corporate Social Responsibility (CSR) goals should align with this.

Offering days off for volunteering or charity work, allowing them to vote for the corporate charity partner of the year and hosting or sponsoring fundraising events and activities can all be fantastic ways to demonstrate to your staff that you care.

In addition, you may wish to consider hosting talks from social enterprises and charities, providing opportunities to build links and give back to the local community, and offering mentoring or running workshops for young people.

Other CSR actions can include things such as promoting recycling, creating diversity and inclusion initiatives such as training or having a dedicated EDI team, and monitoring paper use and distribution.

5. All the little extras

Though not formalised as benefits, it can be all of those little ‘extras’ that add up to a warm, positive and productive work environment, which in turn encourages staff loyalty, builds bonds across teams and sets the company culture.

These extras can include cake for employee birthdays (you could do this on a monthly basis), social events such as an all-company summer BBQ or pay-day drinks, as well as subsidised tickets to concerts, exhibitions or the theatre.

These are some of the very many benefits that organisations should consider offering in order to help them both retain and attract the very best talent. We have ranked them in order of what we believe to be the essential, must-have and nice-to-have benefits, yet the best way to decide which are best suited to your organisation is to speak with the ultimate resource under your fingertips – your current staff!

Get in touch

Now that you know what benefits you can offer to candidates, you might want to get in touch for more information on how to attract staff and ensure your current employees are happy at work.

If that's the case, get in touch with the our expert recruiters here. Alternatively, you can take a look at our other employer resources here.