10 key things to know before investing in employee benefits

Many start-ups and SMEs get overwhelmed when faced with the sheer scale of choice when it comes to employee benefits. What benefits do you need? Who should you get them from? And will they actually make a difference to my staff?

As an employee benefits adviser, I’ve worked with hundreds of businesses taking on this challenge for the first time. Based on my experience, here are 10 things you really ought to know before you get started.

1. Know your options!

For physical & mental health: Business Health Insurance and Group Health Cash Plans

are the two core policies used by employers. Private health insurance regularly ranks as the most in-demand benefit, while Health Cash Plans are less extensive but are useful for

supporting routine health needs.

For mental health: Employee Assistance Programmes (EAPs) are the most extensive

option, offering both digital tools and professional support across a range of issues, including general mental health, specific life issues (such as debt advice and bereavement support) and much more. EAPs are often included with a private healthcare plan and with any of the protection products in the below category, but can be purchased separately.

For financial protection: Group Income Protection (AKA Sick Pay Cover), Life Insurance

and Critical Illness Cover are the main policies to consider here – and some of these come

with wellbeing extras.

For work-life balance: Remote and flexi working, extra holiday time, personal development

opportunities and parental leave should all be considered.

2. Wellbeing is a three-way thing:

A holistic benefit scheme supports physical, mental and financial wellbeing. These areas are all interrelated, so it’s a good idea to support all three areas as budget allows. For example, good mental health increases the chances of having good physical and financial health, and vice versa.

It’s slightly beyond the scope of a formal benefit scheme, but it’s worth mentioning how a

sense of purpose aids a sense of wellbeing too.

3. Choose your insurer wisely:

If you’re considering health insurance, life insurance, or any other health and protection

policy, then you’ll want to make an informed decision.

One insurer may have an excellent reputation or a powerful brand, but they may not have

the best policy for your needs. A lesser-known insurer may provide better value or provide

better overall customer service.

Query response times, claims speed, policy features, costs… These are some of the key

areas you’ll want to consider.

4. Choose your broker wisely:

A broker is more than a middle man between you and the insurer. A good broker will

compare prices from different providers and identify the most competitive option, plus advise on the quality of features and customer service levels.

Some brokers also provide admin and claims support throughout the life of their policy –

which is a massive help for company directors, HR managers or anyone else who’s been

given the task of handling employee benefits.

Be wary of any broker that charges a fee or only works with one or two insurers!

5. Know what your employees want & need:

Yes, it’s obvious but it’s also frequently forgotten. The best way to find out what employees want is to arrange a simple questionnaire asking them to rank employee benefits in order of importance – see benefits listed in point no.1 as a reference.

Preferably anonymised!

6. Find out what similar companies are offering:

Yes, you want to do the right thing by employees, but offering employee benefits is also a

competitive pursuit. Ultimately, you want to keep your best people and attract others to your business.

For that reason, you need to be mindful of what competitors are offering. So it’s worth finding out what companies in your industry typically offer – something a good broker can help with.

7. Set goals and objectives:

It’s worth considering what you want to achieve. Do you want to improve retention &

recruitment? Reduce staff sickness or absence rates? To provide the best possible support to your staff and achieve a feel good factor at your company?

Again, surveys are a good way of tracking employee satisfaction, while benefits platforms

can gather anonymised data on what services are being accessed the most. Tracking staff

turnover and absence rates can also tell you a lot.

8. Tech matters, but so do humans:

Tech plays a major role in making benefits more accessible, but humans still matter. So

whatever platform you choose, make sure you have people who can help ensure everything works like it should.

For example, if you need to add employees to a policy, it still requires someone to actually

communicate with the insurer to get the person enrolled properly.

Many larger businesses have wellbeing champions, but it’s something smaller businesses

can consider too.

9. Be clear on budget:

Before investing, companies should know what they can realistically afford per employee,

and how that budget scales with headcount growth.

This avoids overcommitting to policies you can’t afford later down the line. Also take into account potential premium increases - brokers can provide estimates based on general industry trends and inflationary pressures.

10. A comms plan is crucial:

This is something that I regularly preach – and support with. Benefits only work if employees know they exist. It’s very easy to buy a set of policies and think it’s job done. Even the best package of benefits can fail if they are not explained clearly and promoted to staff.

Stuart Isaac is an Employee Benefits Adviser at award-winning Brighton-based employee

benefits brokerage, Hooray Health & Protection. His hobbies include running, supporting West Ham and preaching the gospel of veganism – but not necessarily in that order!