Susan O’Mara on the crucial role benefits packages play in attracting and retaining staff.
The ‘2018 National Skills Bulletin’, published by SOLAS, makes for interesting reading if you are running a company; you need to know what is in store for the labour market in your sector.
If you are a parent with kids pondering their choices for the CAO – it is also worth a read. You may have some idea of what skills will be in demand when your children are ready to enter the workforce in 2023-2025.
It will not be news to regular readers of this magazine that there are skills and labour shortages in the construction sector and that those shortages are for both professionals, such as project managers and quantity surveyors, and for tradespeople and general operatives.
Attract and Retain
Considering this, it becomes all the more critical that you have a competitive rewards package in place to retain the key staff and attract high-quality new staff.
There are thousands of scholarly articles online on the topic of how to attract and retain staff. They cover the hiring process, the efficacy of the people managers, training and overall work environment.
Finally, there is salary, which is the focus of this piece. While a competitive salary is important, it is not always the most critical deciding factor for employees – so much as the overall benefits package is. The total benefits package may include membership of a pension scheme, life assurance, health insurance and income protection. It may offer all or a combination of all, depending on the employee’s requirements.
What is included in a benefits package?
Along with salary, this usually includes an occupational pension scheme, into which an employer makes a pension contribution for their employee and, most often, so does the employee. Schemes can be designed to provide similar contributions for all staff or to reward experienced staff. One scheme does not necessarily have to have the same rates for all employees.
More often than not, there will be life assurance, also known as death benefit or death in service. This pays out a lump sum to the dependants of an employee on their death while an employee of the company. Once again, there are varying levels of cover, and you can arrange different levels of cover, for different categories of staff.
Another cover that employees seek is health insurance, with new types of corporate cover popping up all the time. These provide traditional health insurance with added employee assistance programmes and employee wellness programmes.
My personal favourite benefit is income protection. Should you find yourself unable to work due to illness or injury during your career, who would pay your bills? Not your medical bills, but your ordinary living expenses, your mortgage and utilities? Income protection provides real peace of mind for employees around this. Furthermore, it is about 60% cheaper for an employer to provide this benefit under an employer-sponsored arrangement than for an employee to buy an individual policy directly from an insurance company.
A Fit-For-Purpose Package
Having a benefits package in place is a good starting point, but is it fit for purpose? Does it suit the demographics of your workforce? A single 25-year-old might be less interested in life assurance than a 40-year-old with a young family. Neither the 25-year-old nor the 40-year-old may be enthused by the pension scheme that you are offering if you are not enthusiastic about the fact that you are offering it. You may need to highlight the value in the benefits you are offering, and do this regularly, to ensure that your staff fully understand and appreciate what they have and what it means to them and their future.
Susan O’Mara is a Financial Services Consultant with Milestone Advisory. To contact Milestone Advisory, phone 01 406 8020.