For growing businesses, finding the right people can be one of the biggest barriers to success. When skilled candidates are in short supply, employers are not only competing with similar-sized firms, but also with larger organisations offering higher salaries, recognisable brands and extensive benefits packages.

However, smaller businesses can still compete for talent. A strong workplace pension and a carefully designed employee benefits package can provide a compelling reason for talented individuals to join, and stay with, your organisation.

Salary is only part of the decision

Competitive pay remains important, but employees increasingly consider the overall employment package. They may also look at:

• Employer pension contributions
• Healthcare and wellbeing support
• Protection for themselves and their families
• Annual leave
• Maternity/Paternity leave policies
• Flexible or voluntary benefits
• Financial education and guidance
• Whether the employer appears to value its people

For a business with less than 100 employees, the right benefits can demonstrate a level of care and professionalism that candidates might otherwise associate with a much larger employer.

Make your workplace pension more competitive

Many workplace pensions were established simply to meet Automatic Enrolment requirements and have changed little since.

Reviewing the pension could identify opportunities to improve contribution levels, introduce employer matching, reconsider the definition of pensionable earnings or improve employee communication.

A more generous and clearly explained pension can become a valuable recruitment and retention tool. It shows employees that the business is prepared to invest in their long-term financial future, rather than focusing solely on their immediate salary.

Build benefits around your workforce

An effective employee benefits package doesn’t need to include every benefit available. It should reflect the needs of your employees, your recruitment challenges and your budget.

Depending on your workforce, this could include:

1. Group life assurance: Consider covering staff from day one of employment, as opposed to a 3 or 6 month wait
2. Income protection: Something is better than nothing. Consider covering for a 2/3 year period or 50% of the salary – both are better than Statutory Sick Pay
3. Private medical insurance: Having different tiers of cover will allow you to manage the cost but also target the key treatment/diagnostics you want staff to be able to access
4. Health cash plans: A cost-effective benefit which all staff can benefit from every year. Some providers allow you to amend the benefit table so you can enhance cover for areas important to you (e.g. dental)
5. Employee Assistance Programmes: Ensuring your provider gives access to the employees’ partner and children
6. Financial wellbeing support: Deliver sessions targeting the common issues that the demographic of your workforce encounter

Using employee feedback and workforce data can help ensure that money is directed towards benefits people will genuinely value.

Communication is essential

Even a generous package will have limited impact if employees don’t understand it. Benefits should be explained during recruitment (offer letter), induction (new joiner pack) and throughout employment (presentations and employee benefit posters).

When staff do need to use the services, often they want to be able to get support/treatment without having to speak to HR. Having clear signposting on your intranet or staff noticeboards will help with this.

Clear communication helps employees recognise the full value of their reward package, making it easier for your business to stand out when recruiting and giving existing staff another reason to stay.

Compete for talent with confidence

Smaller businesses may not always be able to offer the highest salary, but they can provide relevant benefits, personal support and a workplace where employees feel valued.

A review of your workplace pension and employee benefits can help you understand how your current package compares, where improvements could be made and how benefits can support your wider growth plans.

Going a step further to implement the right solutions can help set your business apart from competitors and make it a more attractive proposition for high-quality employees.

Important information

The information provided is for general guidance only and reflects our understanding of HMRC rules at the time of writing. It does not constitute legal, tax, or accounting advice. Employers should seek specific advice from their accountant or tax adviser to ensure the approach taken is appropriate for their circumstances.