By Bob Brassington, employee benefits and pensions specialist in Smith & Williamson’s Bristol office
As the labour market tightens and recruitment becomes more challenging, employers will want to ensure their employee benefits are competitive and generating the maximum value for the business as well as its staff.
Many employers are bracing themselves for a potentially significant rise in employment costs. Salary hikes may be inevitable as average earnings start to overtake the rate of inflation. After seeing their pay increases supressed for the last few years, employees are now more likely to ask for a rise, particularly where there is evidence of company confidence, profitability and growth.
Pensions auto enrolment is an added cost burden as are the strategies, training and benefits which go into recruiting, retaining and motivating staff.
Independent advisers, such as our employee benefits team at Smith & Williamson, work closely with directors to ensure their employee benefits are cost-effective, tax efficient and generating value for money.
Their role is to help employers minimise the costs of their company benefits and pension trustees the associated costs of running trust based pension schemes. This often involves a review of the market, using contacts to identify the best deals. For example, most final salary pension schemes are closed to new members and in some cases, there are few if any members still employed by the company.
And yet the scheme is still obliged to pay out and cover various administrative and compliance costs. An independent adviser can conduct an independent review of the market and advise on more cost-effective ways of running these schemes and also the potential in the long term to remove the entire cost of these schemes from the company balance sheet.
The approach varies depending on the objectives of each business, the number of employees and the benefits they offer. There are many different ways in which advisers can help. For example, at Smith & Williamson we work with employers to devise comprehensive reward strategies, benchmark benefits against competitors’ packages, and advise directors on ways to minimise their National Insurance contributions or remunerate staff in a more tax-efficient way.
Communicating the value of benefits to employees is crucial. One way of empowering employees is to provide them with financial education, which can be a real differentiator for companies in recruiting and retaining staff. Clients are often looking for creative ways to remunerate their employees. We know that increasingly, people are looking beyond their salaries and placing greater importance on work-life balance, flexible working and other benefits. For example, one of the ways in which employers can add value to their workforce is to offer a financial training package, for example covering mortgages, pensions and will-writing services.
Smith & Williamson’s employee benefits team provides specialist advice and services linked to reward and benefits structures and services, taxation, pensions and payroll.
To discuss any of the above issues, contact Bob Brassington on 0117 376 2150 or by email at bob.brassington@smith.williamson.co.uk.
By Bob Brassington, an employee benefits and pensions specialist in Smith & Williamson’s Bristol office
