Chances are you’re searching online for the best employee benefits for your burgeoning startup. Employee benefits that your team will genuinely appreciate.
But what actually is an employee benefits scheme, and why do you need one for your team?
What is an employee benefits scheme?
Employee benefits are extra incentives intended to engage, motivate and reward employees. Typically, in the form of non-cash compensation. Also known as ‘perks’.
Not to be confused with ‘core benefits’ like holiday pay or a workplace pension, which is mandatory for UK businesses anyway.
Employers can offer a single benefit or a package chock-full of perks. One they provide or outsource to an external provider.
Employee benefit platforms like Caboodle and Perkbox offer freebies and discounts for everyday things like food shopping. Other platforms, like Bonusly, give employees the chance to recognise and reward a fellow colleague.
Flexible working, working remotely, office perks, employee share schemes and training opportunities are also types of employee benefits.
Choosing the right employee benefits is a balancing act. Companies, especially startups, need a cost-effective solution. But one that employees will want and actually make the most of.
But it’s a necessary choice to make. According to The Great Perk Search survey, 45% of all British employees expect employers to provide benefits in addition to salary.
Before building an employee benefits package that works for your business, first, ask yourself these questions:
- What are you hoping to achieve?
- What benefits do your employees want?
Answers to these questions will help you determine what kind of employee benefits are worth the budget. And also help you tailor your benefits package to resonate with the team.
Why is an employee benefits scheme so important?
Employee benefit schemes:
- Attract new talent
- Improve employee experience
- Retain existing talent
- Increase engagement
Do good, look good. Applicants look favourably at employers that offer employee benefits. According to one report, almost 70% of employees said they were more likely to take a job if that job provided a good employee benefits package.
Highlighting "free tea and coffee" in a job description won't impress anyone. An attractive employee benefits scheme impacts the overall employee experience.
By catering to the needs of your team, whether that be everyday savings or wellbeing, you’re showing them that you care. And, if an employee feels like the company cares about their experience, they’re more likely to stick around.
It also ties in with the need for reward and recognition, something that really matters to employees. In a study conducted with YouGov, more than a third of respondents ranked being appreciated and thanked by a manager as their number one motivator.
And let’s not forget that an employee benefit is an incentive to drive engagement and productivity. While many employee benefits positively impact these areas, some benefits are more effective than others.
An employee share scheme is a prime example. But we’ll come on to that later...
Avoid quirky office perks
Startups, especially tech startups, have a reputation for offering over-the-top perks in a bid to stand out against the competition and attract talent.
There’s a fine line between a benefit that adds value and an empty gesture (no matter how well-intentioned). We’re talking about boardrooms full of beanbags and pinball machines.
As part of the YouGov study, we asked employees whether quirky office perks really mattered. To which, only 16% of men and 18% of women agreed it does.
Ask yourself, what value does a ping-pong table bring? Quirky office perks have had their day. So, leave them in the store cupboard where they belong.
Positive company culture does not rely on quirky office perks. Employee benefits must be meaningful. So, what employee benefits should you offer your startup team?
Examples of employee benefits that add value
Employee wellbeing programme
Wellbeing, wellbeing, wellbeing. It’s not just a buzzword. But we forgive you for thinking that with the recent examples of well-intentioned but poorly executed virtual wellbeing sessions.
Positive mental health and wellbeing is crucial to employees. In fact, 65% of those asked in the YouGov survey said they’d prioritise wellbeing over a high salary when deciding between two identical jobs.
Startups are notorious for an all-hands-on-deck approach, which could lead to burnout. So, one of the top employee benefits you can provide for your startup team is a wellbeing programme.
You’ll be in good company. Online searches for “introducing wellbeing at work” increased by 900% in 2020 in the wake of the pandemic. Clearly, lots of forward-thinking companies are seeking ways to improve employee wellbeing.
Sustainability consultant and business author Neil Gaught urges leaders to drive forward “human sustainability across the organisation”. The focus should be on preventing workplace-induced stress rather than tackling the issue when it happens.
Think beyond free gym memberships and yoga classes. For instance, popular mindfulness apps like Headspace offer corporate subscriptions. You could provide access to online counselling or coaching sessions on all sorts, from financial wellness to stress management.
Send out an anonymous survey to understand what your startup team need and tailor your wellbeing benefits accordingly. We use Charlie HR to ask these kinds of questions and understand how the team is feeling.
Training and development
Speaking of coaching sessions, invest in a healthy training and development budget. And not just free books or links to online resources.
Personal coaching sessions like confidence building or career coaching could be the key to unlocking an employee’s untapped potential. Learning and development don’t have to be strictly work-related.
Help employees hone their existing skills and learn a new skill that they can apply outside of work. Like a hands-on craft to give them respite from blue light.
Companies like Lokalise offer employees 10 paid days leave to attend training days and conferences or to complete certification courses. Not all startups have the luxury of offering extra leave.
But nothing's stopping you ring-fencing time each day or every week and dedicating that to learning. Christine Mackay, the founder of Salamandra Studios, ensures that her team has time to learn.
“We are also a curious lot that never stops learning, and because of this, we love teaching each other all sorts of stuff. Our lunch and learns have instructed us all on talents from sign language, 3D texturing, caricatures, and even knitting!”
Startups that don’t offer flexible working are missing a trick.
Flexible working is now a serious consideration for UK employees and job applicants. In fact, 66% of those asked in the YouGov survey said that flexibility would tip the scales when choosing one job over another.
You could offer flexible hours, opportunities to work remotely or embrace a hybrid approach. According to the Adecco Group, 74% of employees believe a mix of office-based and remote working is the best way forward.
Remember that personal and domestic circumstances have changed. Childcare could be problematic. An employee may have new responsibilities to juggle that they didn't have to before COVID. Talk to your team!
Flexible working gives employees more freedom and a better work/life balance and also demonstrates trust. Digital asset company Envato “focus on results, not how many hours someone is sitting at their desk.”
As long as the output is strong, there’s no reason why a startup shouldn’t embrace flexible working in some form.
According to Professor Sigal Barsade, “perks are most effective when they align with culture." So what’s one employee benefit that can align teams behind a common goal and demonstrate shared values? Equity.
Various studies show that employee share schemes help to:
- Attract the best talent
- Retain the best talent
- Boost performance and productivity
- Improve employee engagement
- Increase overall business value
- And preserve cash flow
It all links back to The Ownership Effect. If you give employees a slice of the pie, they’re more inclined to contribute to business success. Emotionally and financially invested in its future (literally).
An employee share scheme is also a financially savvy choice for startups and SMEs who don’t have the budget that a mature company might. And schemes, like Enterprise Management Incentives, are specifically for startups and SMEs.
EMI is an employee share option scheme that offers huge tax advantages for both employee and employer, and there’s nothing to pay when granting options.
So if you’re a bootstrapped startup or cash flow is a little tight, share equity to reward teams for their contribution as you all strive for success.
We asked our customers (those with an EMI scheme) to share their thoughts, and the responses were overwhelmingly positive. Almost 93% confirmed that EMI enhances their company culture and team alignment.
Not all companies are eligible for EMI. But there are plenty of other share schemes that can help startups share equity with their teams.
You can book a free consultation with one of our equity specialists to discover what’s best for you and your team.
Ultimately, the best way for startups to build an employee benefits scheme is to ask employees what they want and to weigh it up with what they can afford. Few will prioritise ping-pong tables and discount codes!
Employees want benefits that add value and improve their overall experience. Think employee wellbeing programmes, flexible working, training and development opportunities and employee share schemes.