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Jason Rayner

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We need a fresh approach – better benefits on a budget

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In this feature with a difference, eavesdrop on these team conversations and learn about benefits on a budget.

Meet the team (an entirely fictional team, but each with a foot firmly in reality…well it’s my reality so I’m setting the rules here).

John: 62 – Finance Director
John is a Newcastle fan because everything is black and white (I wanted him to be a St Mirren fan but I’m restricted from painting a stereotypical image of a Scotsman holding the purse strings. Turns out I don’t set the rules after all…even in my own reality!).

Arthur: 48 – HR Director
Arthur (Arthur was Martha – well not literally – but no stereotypes here) has a large family and tries to treat them all fairly. He has a firm set of family values that all his children are expected to follow and loves to reward each of them for consistent good behaviour.

Claire: 39 – Operations Director

Claire runs a tight ship (She worked hard for this promotion, so don’t go thinking that she’s here to meet an equality quota). She has ridiculous targets, is supported by a few very loyal, able lieutenants who could probably earn more at the competitor round the corner.

Jo: 37 – Benefit consultant
Jo is a simple girl. She loves her puzzles: the tougher the better.

Scene 1

Claire:    “Arthur, I need your help. I’ve worked the team like huskies this year. We’ve hit every target set by the board but Gunter (he’s the CEO from the German parent company – but we try not to talk about him) has just told me that there is no money for pay rises. We’ve got to do something as there are a few of the team I can’t afford to lose. I’ve got to offer them something”

Arthur:    “Absolutely. I know things are tough but we have to keep our best people. Let me speak to John. I’m sure we must be able to do something”

Scene 2
Arthur:    “Hi John. I’ve been speaking to Claire. We’ve got some star performers in her team and we can’t afford to lose them. I know things are tough but we need to get creative here and find a way of showing these guys that they are important, what do you think?”

John:    “Sounds expensive.”

Arthur:    “There must be something we can do. Even if we are not talking about pay rises, maybe we could do something with the benefits package?”

John:    “Sounds expensive.”

Arthur:    “Well we need to do something. We need a fresh approach. I’m going to speak to someone and see what the choices are.”

John:    “Sounds expensive.”

Arthur:    “Thanks for everything John. I knew you’d be onside with this. It’s great to have your input. Speak soon.”

Scene 3
Arthur:    “Hi Jo. I have a problem and I need your help. We’ve had a good year but it’s tough out there at the moment. Our guys have worked their socks off but pay rises look unlikely. Is there any chance at all that we could do something with the benefits? The key thing is: we have to watch our costs.”

Jo:    “Of course there are things we can do. Right, where to start, OK, off of the top of my head, these are the things that you need to consider: we need to look at the range of benefits that you are providing. Benefits packages tend to focus on a core of traditional benefits such as pay, holiday, pensions, death-in-service and medical insurance. As a staple of the ‘average’ package, employees tend to expect these benefits. Removing them to freshen up the benefits range is unlikely to be popular.

    I’d suggest that you engage with the workforce. Remind them what they get and then ask them what they want, what benefits they would value, what would be useful. They may not want anything different but at least you’ve reminded them what they already get.

    Then we could look at the options for some additional fringe benefits. These could be paid for by the company -”

Arthur:    “Woah.  That sounds expensive – what I mean is – I can’t suggest increasing costs”

Jo:    “Stick with me Arthur – so we could look at some other paid-for benefits. To swing this, first we can look at your current benefits and see where cost savings might be possible. It’s by no means a guarantee but worth a shot. Then we could look at the funding options. Switching your pension to a salary-exchange basis could lead to big savings on tax and NI for you and your employees. This will free up some cash for other things.”

Arthur:    “That sounds great – but if I go back and show I can save money then I bet that will go in the coffers and not back to me for the employees.”

Jo:    “Maybe, but you could always present it as a chance to retain some of the savings and pass the rest back to the employees through benefits. What’s more, we could also look at voluntary employee-funded benefits too. With these, you – as a caring supportive employer – use the buying power of the total workforce to offer access to a range of benefits such as online shopping discounts, child care vouchers, dental plans or bikes-for-work schemes. Employees choose the ones that best suit their lifestyle or circumstances and buy them. Although the employee pays, they are buying things they would normally buy anyway, just at cheaper prices. That means that you are helping them to save money; effectively increasing the money in their pockets.”

Arthur:    “This sounds great. I love the idea that we can save some money – not as much as John will but I love it none-the-less, and the fact that we can add some more benefits in. But, I also think it’s really positive that we can allow our people to have a chance to choose the benefits that suit them. This shows that we care about what’s important outside of work too.”

Jo:    “One final thing, don’t forget that once you make the changes you have to tell everyone. A benefit package that no one knows about or understands is of no benefit to anyone.

    Have a chat with John and let me know when you want to get cracking!”

Scene 4

Arthur:    “John, great news about the benefits review.”

John:    “Sounds expensive.”

Arthur:    “What would you say if I said I want to increase benefits, improve engagement, increase the money in our people’s pockets, secure our best people and keep Claire off of your back, wait for it, at the same time as reducing costs?”

John:    “Where do I sign?” (This section of the dialogue has been shortened – in reality there will of course be meetings, more meetings, presentations, maybe a committee, another presentation and some forms to complete – but you get the picture.)

Jason Rayner is Commercial Manager at Jelf Employee Benefits
 

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