Despite the economic uncertainties surrounding Brexit, the labour market is extremely tight. As of June 2019, the UK unemployment rate was 3.8% and has not been lower since December 1974. The market for talent is competitive to say the least and firms often need to offer decent pay and benefits packages to stand a chance of attracting and a retaining top talent.
In Drewberry’s Employee Benefits Survey of 1,000 workers at UK SMEs, 29.4% of respondents stated that employee benefits were important when looking for a new job and 32.3% said that a lack of employee benefits was making them unhappy in their role. Worryingly for the directors of SMEs, 47.7% of respondents were thinking of moving jobs in the next 12 months.
There are many factors that contribute to staff retention, but for a sizable proportion of the SME workforce, the provision of employee benefits is clearly one of them. Traditionally the provision of employee benefits along SMEs has lagged behind their corporate counterparts, so it’s even more important for SMEs to improve what benefits they offer or risk losing out on staff to larger companies.
PMI is the most desired insurance benefit
In Drewberry’s survey, when asking what employee benefits SME workers want their employer to offer, the most desired benefit was flexible working hours, desired by 42% of respondents. The next most desired benefit, and the most desired insurance benefit, was Private Medical Insurance (PMI), with 31% of respondents stating they wanted this benefit.
The most desired insurance benefits among SME workers were as follows:
1. Private Health Insurance (31%)
2. Life Insurance (29%)
3. Income Protection Insurance (23%)
4. Critical Illness Insurance (22%)
5. Health Cash Plan (15%)
Much to my surprise, all these insurance benefits were more desired than a free bar (12%) and an office pet (10%). Very sensible.
Extra value in the additional benefits
It was also interesting to note that SME workers desired discounted gym membership (17%), retail or leisure discounts (16%) and virtual GP services (4%) as employer provided benefits.
These are now provided as ‘additional benefits’ by many leading health insurers as a core part of their offering, with Vitality being one such provider that’s leading the way. Insurance benefits therefore now represent an opportunity for employers to tick off several desired employee benefits in one go and increase the value their employees place on insurance benefits.
Benefits that also work for younger workers
From a staff retention perspective, Drewberry’s research found that the most ‘at risk’ cohort of workers were those in the 18 to 24-year-old bracket, where 73.5% said they were looking for a new job over the next 12 months.
Many workers in this age range often haven’t started a family yet and retirement seems too far away to take seriously. This means life insurance and pensions aren’t normally as important to them as PMI.
Whatever the employees age, PMI is a useful benefit to gain prompt treatment (which also helps the employer return staff to work faster) but the additional benefits, like discounted gym membership, are benefits that can be used immediately and are particularly popular among younger workers.
With the Drewberry research showing that only 12.6% of SME workers currently have PMI, the opportunity in the market is huge.
