Discount schemes are popular with staff, but careful negotiations are needed to get local businesses on board, says Georgina Fuller
Dos and don’ts of setting up a local discount scheme:
- Do approach local businesses directly and be clear and concise about what you would like to offer.
- Do make sure you ask staff what discounts would really benefit them and find out which would be the most popular with employees.
- Don’t forget to tell staff about the new scheme and the discounts on offer. Possible channels include induction meetings for new starters, the organisation’s intranet site or leaflets around the office.
- Don’t assume local businesses will want to do you a favour by offering a discount, so make sure you outline how they will benefit.
There has perhaps never been a better time for employers to set up staff discount schemes with local businesses. Managing pay and benefits is one of the biggest issues facing employers during the recession, with 64% of respondents to the Employee Benefits Research 2009 citing it as a top priority. One-third of employers are also planning to review their benefits providers to get a better deal, according to the survey.
To maximise the effectiveness of local deals, employers should bear in mind a number of key points.
Discount schemes are one of the most popular benefits an employer can provide, according to Helen Craik, operations director at Asperity Employee Benefits. “Employees get an offer, usually 10-20% off the product or service, and the business owners appreciate the chance to profit from marketing and sales that would otherwise be unavailable or have a cost,” she says.
Local discounts can also boost employee engagement if the benefit is affordable and accessible, points out Billy Johnson, head of employee benefits at Oval Financial Services. “It will often create some buzz and goodwill in the office, and it shows the employer understands the day-to-day needs of staff,” he says.
Local discount schemes should be demanddriven by employees and appeal to all or the majority of staff, says Johnson. “Do not just set up a scheme for the sake of it or because a small minority have a niche interest. Make it applicable to the whole of the workforce.
“A great example would be a local gym or tourist attraction. If employers can emphasise potential volume to the local business, then they should secure good deals.”
When it comes to approaching local businesses to negotiate discounts for staff, it is often best to use the personal touch, says Colin Bruce, co-founder of discount search engine BView. “Most employers know other business owners in their neighbourhood and one of the best ways to start a discount scheme is by making use of these contacts.
Even if they do not know fellow business owners, we recommend they approach them directly in person. This will enable employers to best convey why [a business] should participate in their scheme.”
Before employers start to approach local businesses, they should think about what type of offer they would like for their staff, for example, a 10% discount or a two-forone deal. They should also calculate roughly how much additional trade this could generate for the business they are talking to, to use as a bargaining tool.
Overseeing the process
Benefits providers can often help manage a local discount scheme effectively, but if employers are going to run it in-house, they will need to appoint a person or team to oversee the process.
Oval’s Johnson explains: “There will always be an administrative burden with a voluntary arrangement and the employer should factor this in. Who is the point of contact? How is the service procured, for example, via vouchers that are administered by HR or purchased directly?”
Getting staff fully on board is vital to the success of such a benefits programme. It is a good start to make sure employees know what sort of discounts are available and where they can get them, but the scheme could still take a while to take off.
“There is, at the start, sometimes a reluctance on the part of staff to show their card to get the discount in case it does not work,” says Craik. “But this is soon overcome once a good scheme, that is wellcommunicated and has the right sales support material, is launched
Read more articles from Special report 2009: voluntary benefits