If you’re a business owner, you will understand the significance of building a solid team around you.

The old adage that “no person is an island” rings true when you establish your own company – it is much easier to gain success and longevity when you surround yourself with trustworthy, talented people.

Indeed, whether you employ 1 or 1,000 people, retaining the best talent is of the utmost importance. This is especially true in the post-Covid job market, in which flexibility has become a major player in employee benefits.

Some examples of popular benefits include:

• Access to a therapist for mental health support
• A healthcare cash plan, or private health insurance
• Having special occasions off work, such as employees’ birthdays
• Remote or hybrid working options
• A salary sacrifice scheme that allows employees to increase pension contributions or gives them access to a company car
• Access to an independent financial planner who offers bespoke advice.

With these in mind, keep reading to discover why employee benefits are crucial for retention, and two important ways to protect your staff and business financially.

The majority of employees consider benefits when applying for roles, and 70% would stay in a job for the perks

According to 2024 research from Avado, employee benefits are a crucial component of attracting and retaining talent.

The data reveals that:

• 70% of employees are more likely to stay with a company that offers a well-structured package of benefits.
• 65% of candidates consider employee benefits a crucial factor when evaluating job offers.
• Companies that offer mental health support see 30% less turnover than those that do not.
• 80% of employees would choose a job that offers flexible working options over one that doesn’t.

If you’re a business owner who is searching for a way to strengthen your team’s health and decrease employee turnover, the data proves that a package of benefits may be what your company needs to achieve this.

Retaining staff using employee benefits may be more cost-effective than recruiting

Understandably, small and medium-sized businesses may struggle to match the full suite of benefits some larger corporations offer. But it is important to consider how offering even a small package of perks could reduce the costs associated with high turnover.

For example, according to the British Business Bank, hiring an employee with a salary of £27,600 could actually cost more than £62,000, including their salary, in their first year of employment.

Outgoings for a new recruit may include:

• Using a recruitment specialist to hire the new person
• The cost of National Insurance (NI) and pension contributions
• Expanding your office space and buying equipment
• Training and onboarding costs.

Whereas, retaining a team member and providing them with employee benefits could cost less.

According to The Access Group, businesses typically add between 20% and 50% onto an employee’s salary to cover benefits. For instance, if your employee earns £27,600, you might spend an additional £5,520 to £13,800 on their benefits – far below what you might spend on hiring a new person.

Of course, these are just examples using average numbers that might not reflect your unique situation. But this data may prompt you to look more closely at whether your business can afford even a small package of benefits, and to examine the ways this could reduce staff turnover.

2 important ways to protect your business from unexpected shocks

In addition to providing your employees with plenty of incentives for remaining loyal to your business, it is important to protect them and the company if the unthinkable happens.

One such unthinkable event is if you, or a key person in your business, were to pass away or become very ill.

Here are two ways you could protect the finances of those involved, and of the business, in the event of a key person’s death or serious illness.

1. Consider key person cover

If an important figure in your business passed away suddenly or became gravely ill, your business might take a financial hit.

While handling the grief and bewilderment of such a situation, the last thing you and your team need is to be worrying about your company’s finances. But this event happening at the top level could mean that your business ceases trading for a few days or weeks, or may spook shareholders and cause lasting financial damage.

Key person insurance is designed to provide your business with a payout if a person who is integral to the company’s daily functioning passes away or is too ill to work.

This could help to cushion the financial blow and prevent your business from being adversely affected over the long term.

2. Look into “death in service” life insurance

Offered as a benefit, death-in-service life insurance provides a lump sum to the family of a deceased employee if they pass away while still working for your business.

This could form part of your benefits package, and may give your key people the peace of mind they need that their families would be looked after if the worst happened.

Get in touch

I can help both you and your employees to create an affordable financial plan that meets your goals, along with advising you on personal and business protection.

To work with me, email a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Workplace pensions are regulated by The Pension Regulator.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.