SMEs : Maximizing Remuneration for Competitive Advantage in Your Business

To gain a competitive advantage, it is crucial to optimize your remuneration strategy. A successful remuneration strategy consists of the following factors: minimizing employment costs while maximizing employee benefits, and ensuring that your remuneration strategy aligns with your business goals and motivates your staff.

Mighty Clever Remuneration

Firstly, it's important to recognize that relying solely on salary to compensate your employees is inefficient. While competitive salaries are essential, it is equally vital to consider how to effectively offer benefits that exceed employees' expectations. Clever small-to-medium enterprises (SMEs) shift funds from payroll to benefits accounts, employing creative methods to maximize returns while keeping costs down. By leveraging economies of scale and collaborating with other SMEs, even small businesses can access attractive benefits packages to motivate and retain their staff. Building relationships with benefit industry experts early on can help SMEs secure favourable deals.

Maximising Employee Benefits

Top benefits to consider when it comes to employee benefits are health plans, health insurance, critical illness cover and pension contributions.

1. Health Plans: By providing comprehensive coverage for optical, dental, and therapy costs, employers can ensure that employees prioritize their preventive healthcare needs. Additionally, offering medical advice online, expert second opinions, private consultations, and access to scanning services further enhances employees' well-being. Demonstrating a commitment to health promotes a positive work environment.
2. Health Insurance: Supplementing the National Health Service (NHS) with private medical insurance offers employees a peace of mind, providing prompt treatment for serious conditions. Moreover, extending coverage to partners and dependents at corporate insurance rates strengthens the overall appeal.
3. Critical Illness Cover: Employers can offer critical illness cover at a significantly lower cost than if employees were to purchase it individually. This cover guarantees immediate treatment through medical insurance and provides additional financial support, such as paying two years' salary, should an employee be diagnosed with a critical illness.
4. Pension Contributions: While employers are legally obligated to contribute minimum pension amounts, voluntary contributions above the legal minimums can be an attractive employee incentive, as they are tax-exempt up to a certain limit.

In addition to these key benefits, businesses can explore additional perks that require minimal costs, such as staff discounts on products, company loans with no tax implications, tax-free childcare vouchers, cycle to work schemes, tax-free car parking spaces, and National Insurance exemptions on most taxable benefits in kind.

Total Reward Statement

To ensure employees are aware of the comprehensive rewards they receive, we recommend issuing a Total Reward Statement. This statement outlines all benefits, including salary and other perks. However, it is important to strike a balance between providing clear information and overwhelming employees with unnecessary details.

By implementing a strategic remuneration approach that optimizes benefits and aligns with business objectives, businesses can gain a competitive advantage in attracting, motivating, and retaining talented employees.

The above content is from "Mastering Small Business Employee Engagement: 30 Quick Wins & HR Hacks from an IIP Platinum Employer" by Barry Phillips and Jayne Gallagher which is available from Amazon:

https://bit.ly/3rm4CGV