Gone are the days where gyms, free breakfasts, and ping pong tables are listed on the company benefits section of job descriptions. This then begs the question, what will these company benefits be replaced with for home workers to keep them motivated and well incentivised in their new work environments?
Before Covid changed the way we work, office benefits were seen as a major perk to particular companies. Benefits such as free gyms, fresh fruit, Friday drinks and relocation packages were seen as major attractions in joining an organisation. In fact, many potential employees would come to expect a certain number of benefits in their new found roles.
As such workplace benefits are now evidently harder to implement and deliver for many organisations during the course of a pandemic, with many employees now working from home full-time almost indefinitely. For instance, in October, Deloitte announced the closures of 4 offices, in favour of permanent remote working. But what does this mean for company benefits, are they gone for good?
This is not just speculation either, as studies have shown that many employees are giving the matter careful thought and consideration. A Howden survey of 144 employees found that 72% are planning to review their employee perk provisions as a direct result of the global pandemic, and over 38% of employees felt that these benefits were ‘much more important’ than pre-covid.
This begs the question, should benefits be completely rethought, or is it time to say goodbye to company benefits altogether? What new found offerings should these benefits be replaced with, and what pros and cons could they bring in relation to the previous extravagant company benefits?
Do employers need to reconsider their current employee benefits?
It’s clear that company benefits need a serious refresh, as many benefits may have been neither used, nor valued by employees even before the pandemic, wasting money for many companies. It has never been more relevant or important to establish a curated employee-led approach to benefits – a way to enable flexibility and choice to employees to ensure what is on offer is of personal value.
It certainly seems too early to pick up on specific trends in the new company benefits being offered. Debi O’Donovan, the director at the Reward & Employee Benefits Association, says that questions from employers are already pouring in as benefits budgets come up for review. Everything from gym memberships and travel loans to company cars and office-based perks are currently coming under scrutiny.
But I would suggest that these uncertain times also mean many businesses are for now “holding off” on making fixed decisions about their benefits offering.
The dangers of leaving company benefits unchanged
By default, many company benefit packages come with a certain level of geographical weight to them, usually in favour of the office location as opposed to being nearby peoples homes. This however, could seek to discriminate against those who feel anxious or unable to come into the office during the period of the pandemic, and could discriminate against those that primarily work from home. Where employees in the post-pandemic world might be unable to take advantage of company benefits, this could lead to accusations of unfair treatment, leading ultimately to lower engagement and lower productivity.
As recruitment starts to regain force, and businesses start to re-hire their lost employees after the pandemic, many businesses will not be able to afford the loss in talent to competitors for not maintaining their attractive benefits and offerings. Getting a good balance between benefits for in-house workers and benefits for remote workers is critical in motivating the best talent to apply for the roles you are offering.
What should replace existing company offerings?
One way to tackle this problem might be to explore company benefits that are available closer to employees’ homes, which in turn would positively impact employees’ physical health and mental wellbeing. This could include things like access to local gyms or memberships to private clubs for all employees who want it. Another incentive for businesses during the winter months may be to send the team out treats and sweets to allow the team to bond, and to deliver some motivation in the final push of 2020.
Additionally, investing in mental health support programmes if there aren’t any currently in place is more important than ever. It is worth reviewing existing life insurance, group life insurance and private medical packages before investing in any new packages. Do a complete audit of everything already on offer – many organisations are already providing employees with virtual benefits such as online mental health checks and support, nutritionist consultations, tailored fitness programmes and virtual GP appointments. The problem here might be a lack of awareness rather than lack of provision, and designing a comms plan to help people navigate the support already on offer might be enough to make a big impact.
As with anything, benefits and perks can be reimagined to be digital so they can be used anywhere, regardless of the working from home situation. Cash incentives and rewards could also be offered through ensuring that the correct tax treatment is used for each employee regardless of their combination of benefits.
Some existing benefits, including reward-based health insurance and online shopping discounts, already – even before the outbreak – provided extras for people not physically based in an office, Ideally, employees should be given more choices, which could include online perks, fitness classes or even healthy foods to take advantage of.
But, the future is still not clear enough at the moment for organisations to be making wholesale sweeping changes to benefits. Most companies have ongoing commitments to existing arrangements that can’t be changed overnight. Nonetheless, some employers will be able to renegotiate with their providers to make allowances for the current situation, and mental health and wellbeing should be the primary focus.
What should employees who are working from home be allowed to expense?
As many employees working from home are missing out on the benefits of coming into the office, such as free meals or even a suitable home office setup, employers might want to consider expanding their current expenses policy. One option is to create a system where employees have a budget with a supplier to spend on items of their choosing that are delivered to their home address.
Employers can also offer a £6-a-week working from home allowance as part of an HMRC-approved scheme that allows employees to receive the extra money tax free. However, it is suggested that employers should consider going above and beyond this if they are able to offer a more generous allowance. It is not unusual to see higher amounts paid, similar to a car allowance, which are taxable but generally kept outside of pay rise calculations and pensionable pay.
If an employer can’t afford to provide even the £6 allowance, employees can claim an equivalent tax break of £6 directly from HMRC, which employers should consider communicating details to staff.
Are you unclear how the changing work environment might impact your benefits and overall reward offering? Call me for more information about how I can provide advice and support in this tricky HR area.