Offering competitive employee benefits is crucial for SMEs, especially to attract and retain talent. But this can be tricky when budgets are tighter than in large companies. The most effective benefits strike a balance between affordability for the business and strong perceived value for employees. So which are best to consider, and do any offer tax advantages for SMEs?
Core benefits
There are some employee benefits which form the foundation of a solid employment package. These include:
- Pension contributions – do consider offering above the statutory minimum or matching employee contributions
- Paid holiday leave – typically companies offer 20–25 days (and public holidays) but you can improve this with offering additional leave, or extra time off during quieter period such as Christmas, depending on your sector
- Sick pay – statutory minimums apply but enhanced sick pay policies can build goodwill
- Maternity, paternity & parental leave – again there are statutory expectations but you can offer enhanced terms to support a better work/life balance
- Life insurance/death-in-service benefit – this is a relatively low-cost way to provide financial security for families.
Additional benefits
There are a range of ways to boost employee satisfaction and loyalty, and some can be relatively affordable and have a high impact for your team:
- Flexible working – remote or hybrid working, flexible or condensed hours, or 4-day work weeks are now growing in popularity and can create greater productivity and better work/life balance
- Health and wellbeing support – Employee Assistance Programmes (EAPs), mental health resources or counselling access and discounted gym memberships can be a good way to promote a culture of support
- Professional development – offering training budgets, online learning platforms and support for certifications, conferences, or qualifications can ensure your team develop their career, and boost your skillset in house too
- Health insurance or cash plans – full private health cover may be costly, but a basic health cash plan could be a more affordable option
- Cycle-to-work scheme – encourages sustainable commuting and is tax-efficient too
- Bonuses or profit-sharing – even small, performance-linked bonuses can be motivating
Other ways of rewarding staff
There are other options if you’re keen that your SME stands out from competitors:
- Equity or share schemes – such as options to share in company growth
- Extra personal days – small gestures like birthday leave can feel big to employees
- Pet-friendly office or “pawternity” leave – especially valued by younger employees
- Volunteer days – paid time off to volunteer can boost morale and company values
- Free snacks, team lunches or social events – these can be fairly inexpensive ways to foster a strong team culture
Setting up a refreshed employee benefits scheme
It can be useful to talk to your team to understand what benefits they value most. Focus on flexibility and wellbeing as these can matter more than flashy perks. And remember to review and communicate your benefits – your team won’t value what they don’t understand or use.