Offering a voluntary benefits scheme can be an important tool in the way that employers retain and engage their talent.
This approach can be important for public and voluntary sector employers competing against parts of the private sector. While public sector employers can often offer a generous pension scheme and leave arrangements, they are very rarely able to offer staff such perks as private medical insurance or company cars.
However, because of their size, they are often able to negotiate preferential deals on behalf of their employees on goods and services. This helps stretch the value of their employees’ pay, as well as showing that they care about their staff.
It is important to segment the workforce so organisations offer discounts on products and services that employees actually value, otherwise staff will fail to be engaged and may even become disillusioned.
One of the possible advantages of offering a voluntary benefits scheme is the savings that an employer can make if the scheme utilises salary sacrifice, whereby the organisation saves on national insurance contributions (NICs).
However, the government’s recent proposals to restrict the use of salary sacrifice schemes could have a negative impact on employers using their NIC savings to fund other projects.
Will such changes result in voluntary benefits schemes becoming less common? Perhaps. However, while they may no longer create employer savings, they can still help organisations retain and engage employees.
Charles Cotton is reward advisor at the Chartered Institute for Personnel and Development (CIPD)