Why do I need advice about employee benefits?

Expert advice about employee benefits ensures you meet the minimum statutory requirements for your benefits package. It can also let you decide how to enhance those employee benefits. For example, you must provide:

• Statutory sick pay (SSP)
• Annual leave of at least 5.6 weeks.
• A workplace pension for eligible employees.
• Paid parental leave and parental bereavement leave.

Each statutory employee benefit includes a minimum time, financial value, or both. However, you can enhance each benefit if you wish. For example, you might want to offer additional paid leave or more sick pay to give employees a better work-life balance or improved financial safety net.

Enhanced employee benefits help your company attract and retain employees. Depending on the benefits package offered, they can also improve employee well-being and engagement. Offering benefits above the statutory minimum shows your employees you're willing to invest in their well-being and financial security.

Your employee benefits package can include enhanced versions of statutory benefits and additional benefits such as health insurance or death-in-service benefits. Getting professional advice will help you achieve the right combination.

We've touched on how seeking expert advice can help you design an employee benefits package. Now, let's consider the specifics in more detail. Generally, when you seek independent advice about your employee benefits package, you'll get an unbiased view that can help you balance your business needs with employee benefits that will help you attract top talent and retain valued employees.

You must also seek independent advice from the right professionals. Here are some of the main benefits of getting expert advice.

Understanding statutory requirements

As we've mentioned, there are some employee benefits that all employers must provide. We've provided an overview above, but the details can be complex. Your legal and financial advisers can help you ensure your company complies with relevant legislation. Businesses' legal duties can also change as they grow or when the Government introduces new legislation.

Businesses also have a legal duty to avoid discrimination, which may be relevant when offering benefits that vary between different employees.

Advice on tax implications

Employee benefits often have tax implications for both you and your employees. Gaining a thorough understanding of the tax position lets you decide which employee benefits to offer and how they will impact your finances. Employee benefits impact income tax, corporation tax and National Insurance contributions. Speaking with your accountants and financial advisers gives you a complete overview so you can make an informed choice.

Tax implications for employees

HMRC treats some employee benefits as benefits-in-kind, meaning they attract additional income tax. The most common employee benefit treated as a benefit-in-kind is health insurance. Employees pay income tax on the value of the benefit, which is equivalent to the cost of the insurance premium.

However, employee benefits using salary sacrifice could reduce their tax bill. These can include the workplace nursery benefit, which offers help with childcare costs, or the cycle-to-work scheme, where employees can pay for a bicycle via salary sacrifice.

Business tax

Many employee benefits are allowable expenses for corporation tax purposes, meaning you can deduct them from your tax bill. These include premiums for employee health insurance and the cost of company cars. Health insurance is a highly valued employee benefit and can help you reduce the tax your company pays.

Your advisers can also offer advice on any increased costs due to additional employers' National Insurance contributions. Independent advice can give you an overview of your tax position and find the right balance.

Saving you time and money

When you've decided which employee benefits to offer and assess the legal and financial implications, the next step is to find the right providers. If you choose to provide health insurance, you can research each insurance company by visiting websites and requesting quotes. However, this can be time-consuming, particularly if you have to chase quotes. Then, you must spend time comparing quotes. Speaking to a broker can simplify the process as they'll do the legwork and have the expertise to provide advice on the policies that best meet your needs.

Brokers also develop relationships with insurance companies, giving you access to the best deals and saving you money.

Advice on benefits in a wider business context

Every employee benefit has potential advantages and disadvantages that you may not be aware of, and these vary depending on your business, employees, and other factors. Experts can consider your unique circumstances and provide guidance on potential risks and how to manage these effectively. If there are different ways to implement employee benefits, they can advise on the best option for your company.

Here are a couple of factors your advisers will consider.

Business goals

Your employee benefits package can support your business goals by helping you attract and retain skilled workers. It's worth considering employee benefits in the wider context of your business goals and current position. For example, a new start-up's financial position will differ significantly from that of a well-established corporation with hundreds of employees. The former will likely need dedicated employees to help them achieve quick growth but may also have limited resources. Any investment in employee benefits must be budget-friendly but also offer the potential for better benefits as the business grows.

Independent advice can help you tailor employee benefits to your business's current situation and future prospects.

Outsourced services

Some employee benefits, particularly health insurance, offer access to outsourced services. These have the advantage of being flexible and cost-effective, as you can pay for them via your insurance premiums rather than employing an in-house team. Expert advisers can help you understand what's available and which services could benefit your business.

Here are a couple of examples of services you can access via business health insurance policies.

Occupational health support

A health insurer's definition of occupational health is likely different from yours. They don't provide specialist advice on individual employees, for example, those on long-term sick leave. However, they can help you improve employee well-being. Most business health insurance policies include employee health checks and support to help employees achieve their well-being goals. They'll also provide your business with anonymised data to help you identify areas of concern and develop workplace wellness initiatives to tackle these.

Vaccination programmes

Statistics show that minor illnesses, including flu, accounted for 29.3% of all sickness absences in 2022, making it the leading cause of workplace absences. Your staff may qualify for a free flu vaccination, depending on their circumstances. However, many won't and will need to pay to be vaccinated. Many health insurers offer a workplace immunisation service where a nurse carries out vaccinations at your office. Alternatively, you can fund vouchers so that your team can book an appointment elsewhere.

Tailored insurance policies

Your business can support its employee benefits package with insurance policies designed for the purpose. Policies typically offer various options, meaning when you seek independent advice, you can tailor your coverage to suit your needs.

Here are three of the most common types of insurance you can include in your employee benefits package and how experts can help you tailor your coverage appropriately.

Health insurance

Health insurance includes core elements such as in-patient treatment and cancer care. You can also add more options to extend the coverage and provide a broader range of treatments. A broker can give advice on the optional extras that will benefit your business most. Some can help reduce absenteeism, while others will vary depending on your industry, associated health risks, or employee absence history.

Most importantly, they can help you avoid spending money on services your employees are unlikely to use.

Life insurance

Group life insurance can cover your entire workforce and pay death-in-service benefits to their loved ones if they die whilst employed with you. Policies typically pay a lump sum, which provides a financial safety net for employees' families. You can opt for a group life policy, relevant life coverage, or both. Your adviser can provide guidance on the best policy for your needs.

The lump sum that life insurance pays is a multiple of each employee's usual salary. Within policy guidelines, you can choose the multiple, and your broker can give tailored advice on a suitable figure.

Income protection and critical illness insurance

Income protection insurance pays your employees a percentage of their usual salary if they can't work due to illness. Most policies have a deferred period, which means they don't pay out immediately, but they can continue paying for up to two years. It lets your business provide enhanced sick pay without covering the full cost. It can also leave room in the budget for you to hire temporary help if needed.

Critical illness cover pays a lump sum if a team member is diagnosed with a serious illness.

Again, each policy can pay varying amounts, and your advisers can help you decide what coverage is needed.

Ongoing support

Your business and the landscape in which it operates can change quickly, meaning your employee benefits package may need to shift to adapt. When you work closely with professional advisers, you can benefit from ongoing support and expert guidance during periods of change. They can also review your current employee benefits to ensure they still meet your needs and those of your team.

Policy renewals

As we've mentioned, your business can support several employee benefits with insurance. When your annual renewal is due, a broker can review your coverage and advise you on any cost increases or changes in coverage. They can also conduct a market review to ensure you're still with the best provider.

Changing to a new insurer can be complex, particularly with health coverage, but a broker can guide you through the process.

Reviewing how employees use their benefits

When you start offering benefits, you'll likely base them on what you think employees will use. However, as your staff use their employee benefits, you can gather data showing what they actually use. Your broker can use the information to help you tailor your coverage more closely to suit your team's needs by reducing financial limits on some benefits and extending them elsewhere.

The same can apply if you use a benefits package broker to design employee discount programs that help them save money on their regular purchases.

Guidance on statutory changes

Legal requirements can change because of changes in Government or new legislation. Your advisers can help you understand what this means for your business and help you ensure compliance. Every business is different, meaning the processes you use to implement new requirements will be, too.

You'll likely need input from various professionals, including legal, HR and financial. You may need technical support or guidance from brokers on ways to tailor your employee benefits to meet statutory requirements and fit your budget.

Communicating with employees

Communication is a vital part of your employee benefits package. If your staff don't know what employee benefits are available, they're unlikely to use them, meaning they're missing out and your business is wasting money.

Regular communication is vital. You'll likely include details of your employee benefits package in onboarding materials for staff starting a new role. However, regular reminders support employees to access benefits when needed. Many insurers provide resources for you to share with your team, and your broker can connect you with them.

Finding the right advice can help create an employee benefits package tailored to your team and business needs. We've mentioned various professionals throughout this guide, but let's look at each in more detail to see what guidance they can provide.

Accountants and financial advisers

Your business accountants and financial advisers can provide detailed advice on new employee benefits and ongoing support. They can advise you on the cost of implementing employee benefits and the tax and National Insurance implications for both you and your team. Accountants also play a vital role in ensuring your accounts are updated and that everything is correctly reported to HMRC. A pensions adviser can help you choose a suitable workplace pension scheme, carry out administration and advise employees.

Financial planners and accountants can provide forecasts to help you plan for the future and change employee benefits when needed.

Legal advice

As we've discussed, there are statutory requirements for employee benefits, and your lawyers can help ensure your company complies with them. They'll also keep you updated on any changes. Your employee benefits package may vary between staff. For example, the benefits package you provide to directors will likely differ from employee benefits for other workers. It's a good idea to seek independent advice to ensure you aren't discriminating against employees.

In some circumstances, you may need to consider withdrawing some employee benefits. Your solicitors can advise you on the legal and contractual implications. Some employee benefits, such as mental health support, can positively influence company culture, meaning reduced employment tribunal claims.

Insurance brokers

Suppose you've decided to offer employee benefits supported by insurance, such as health, death-in-service benefits or enhanced sick pay supported by income protection coverage. In that case, it's a good idea to seek independent advice from a broker.

You may already have a broker for essential business coverage, such as employers' liability or professional indemnity insurance. They may be able to advise you on employee benefits, but it's worth speaking to a specialist broker, as they will likely have more in-depth market knowledge.

You should also be aware of an important difference between brokers and agents.

Independent brokers

An independent broker will review the whole market and advise you on policies that best meet your requirements. They aren't tied to a single provider, meaning they can consider any insurer from across the market.

Agents

An agent represents a single provider and can only advise you on the products they offer. This can work well if you've done your research and are confident that a particular provider meets your needs. However, it can still be worth speaking to an independent broker to ensure you've considered all viable options.

Benefits brokers

An employee benefits broker is similar to an insurance broker in that they can help you choose the right products and services to create a high-quality employee benefits package. They'll help you source and compare quotes to tailor your benefits package to your needs.

Benefits brokers will also review your employee benefits at renewal. Some provide ongoing support with administration and claims. However, this varies depending on your chosen broker.

At Globacare, we get to know your business to understand your needs and goals so you can invest in insurance products that support a high-quality employee benefits package. Contact us today for tailored advice and a comparison quote.