More than half of small and medium-sized companies are planning to introduce or expand the benefits they offer staff as they focus on recruitment and retention, and increasingly want employee benefits consultants to help them, according to new research for MetLife UK.
Its nationwide study of firms employing between 50 and 300 staff – which make up around 34,000 businesses employing 3.3 million people, found that 53 per cent will increase the benefits they offer staff over the next two years.
MetLife’s research found that SMEs are increasingly looking for support from employee benefit consultants to help them with recruitment and retention – around 46 per cent of firms say they will look for support with strategies to attract talent over the next 12 months, and 41 per cent want help on retention strategies. When MetLife asked the question last year only 36 per cent were looking for help with recruitment and 34 per cent with retention.
Around 2,400 – the equivalent of 7 per cent – will introduce benefits for the first time while another 15,600, totalling 46 per cent, will expand the benefits they offer. Around 14 per cent of firms say they plan to expand the benefits on offer to staff substantially.
A key reason for expanding benefits identified by the study is that SMEs say they struggle to attract and retain staff in the face of competition from bigger firms – 49 per cent of companies say recruitment and retention are major issues for them.
More than one in four SMEs – 27 per cent – admit their benefits package is not as strong as bigger firms, while 25 per cent say they cannot afford to pay the salaries prospective employees expect.
MetLife UK employee benefits director Adrian Matthews says: “Employees increasingly recognise the value of benefits and SMEs are clearly looking to respond by enhancing what they offer staff.
“With one in four employers saying they can’t afford to pay the salaries prospective employees expect, I would say to them that they should not be deterred. Salary can be a blunt and expensive instrument and we know from our own Employee Benefit Trends Study in 2017 that in fact 55% of employees highly value the benefits on offer and that 34% would be persuaded to stay in their job if their benefits were enhanced. That is a positive for SMEs which feel they can’t compete on salary.
“A well-designed benefits package can play a major role in supporting SMEs’ recruitment and retention strategies and need not prove as expensive as many firms may believe. The cost to companies of Group Life and Group Income Protection can for some be as low as 0.5% of salary for income protection and 0.2% of salary for life cover.”
“The role of the adviser is key as SMEs are telling us they want support in identifying the benefits that would be most valued by their staff: this is good news for employee benefits consultants and other advisers.”
MetLife’s study found that the majority of SME owners and managers believe they have a duty to provide benefits beyond salary and pension – around 69 per cent say their firm should offer more than salary and pension to employees.