How Reviewing your Benefits Portfolio can Bring Cost Effective Solutions for your Business

In In The Press, Industry News by PCH Staff

As an employer, it is important that you provide your employees with attractive and genuinely valuable benefits packages. After all, your staff are the backbone of the business and if they are absent through sickness or not fully engaged in their work, it is your bottom line that will inevitably suffer.

That’s why benefits packages that offer tangible value are particularly appealing to individuals. However, choosing the right benefits can also positively impact your business when it comes to areas such as sickness absence management.

For example, research has shown that sickness absence typically costs employers £600 per employee per year. However, the actual costs are unpredictable and notoriously difficult to budget for.

Furthermore, in April this year, the government removed their Percentage Threshold Scheme. A measure that has had a direct impact on small businesses and left them thinking of new ways to manage their costs when employees are off sick.

Under the Percentage Threshold Scheme, smaller employers could reclaim any amount of Statutory Sick Pay (SSP) which exceeded 13 per cent of their NI contributions for the month. The scheme’s removal, therefore, has meant that the burden of sickness absence is now being fully borne by companies once more.

When it comes to sickness absence the true repercussions are sometimes overlooked. Firstly, there are the associated direct costs which include temporary cover, overtime, Statutory Sick Pay, Occupational Sick Pay and the employee’s salary. However the indirect costs are the ones that are more difficult to calculate and often go unnoticed. These include interrupted workflow, reduced productivity, loss of output, additional administration and even decreased morale.

When the direct and indirect costs of sickness absence are coupled together, the full picture can be seen by employers. But what is the solution?

benefits

Well, income protection insurance is one benefit that you can offer your employees which will actually benefit you both in the future. It is designed to alleviate the financial consequences of sickness absence, as well as providing the employer a comprehensive claims management service.

In fact, studies have shown that income protection policies can reduce overall absence levels and help to control payroll costs. Furthermore, at typically just 1 per cent of salary roll, income protection represents an affordable investment for employers.

Income protection isn’t designed to necessarily replace sick pay but employers often find that the decision to take out group income protection is also the perfect time to revisit and review contracts.

As the protection is also fully flexible, you can choose which categories of employee are covered and even choose to offer different levels of cover based on an employee’s position. A bespoke scheme to suit your individual business needs is the perfect solution for minimising the impact of sickness absence going forward.

Managing sickness absence is a difficult challenge which typically costs employers like you £600 per employee per year. Whether it is the cost of temporary cover, statutory sick pay, overtime or interrupted workflow, we recommend a review of your benefits portfolio to help find a cost effective solution for your company.    

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