MAKING WORK WORK FOR YOU

Top employee perks that will benefit your bottom line,

IN the competition for talent over the last few years, employers have been falling over themselves to provide a wider and deeper range of employee benefits. Some of these employee benefits will naturally have a direct and positive impact on the value of your pay package either immediately or in the long run, including pension contributions, health and life insurance, share options and top-ups to parental benefits.

But there’s been an explosion in ‘non-pay’ benefits aimed at improving your lifestyle, many of which will also have a positive effect on your finances. For example, gym membership, additional time off, subsidised childcare, tax-free vouchers, and access to employee assistance programmes, to mention a few.

Indeed, some employers, particularly large multinationals, offer such a bewildering array of such benefits that it can be hard to know which combination of them might represent the greatest value to you at your life stage.

PENSIONS

IT’S no surprise to learn that pension contributions still rank as the top perk thanks to its tangible financial value and tax efficiency, which is confirmed by a January 2020 survey of (mainly large) Irish employers by the main professional body for HR professionals, the Chartered Institute for Personnel and Development (CIPD).

Using as a benchmark the 6pc maximum employer contribution recommended under the Government’s plans for auto-enrolment pensions, the CIPD survey found that around a third of them contribute less than 6pc to their schemes, while a third contribute more than 6pc. Of the balance, half would pay exactly 6pc and the other half would pay nothing at all.

CIPD director Mary Connaughton says that she has seen companies contributing as much as 15pc to their schemes, but that those in senior management levels are more likely to benefit from such rates.

After pension contributions (82pc), the most popular perks according to the CIPD survey include sick leave top-ups (57pc), on-site facilities (canteen, gym etc) (55pc), parental benefit top-ups (55pc), tax-free vouchers (49pc) and health insurance contributions (44pc).

BENEFITS-IN-KIND

NEEDLESS to say, taking into account any benefit-in-kind (BIK) tax liability from a perk should be part of your considerations. The most common perks subject to benefit-inkind taxation are company cars or loans at a preferential rate.

Connaughton notes that changes to the BIK regime back in the early noughties made cars a less attractive benefit to anyone who didn’t have high annual mileage in terms of using it for business (although it’s worth noting that some electric cars still benefit from a zero per cent BIK, a rate that was extended to December 2022 in Budget 2020). But ever since the Government increased the minimum tax threshold on small non-cash benefits from €250 to €500 in 2015, tax-free vouchers to a value of up to €500 have become very popular, she said.

TIME OFF

AT 53pc, additional annual leave ranks highly as a perk too, a CIPD survey undertaken in June 2020 revealed a massive drop in the numbers of employers who said they were planning to make a bonus payment this year. Nearly 80pc of employers said in January this year they were planning to pay bonuses, but that figure dropped to just 21pc by the end of the first half of 2020.

The upshot of this is that as the capacity to pay bonuses and certain other benefits suffers, some firms may look to offering more time-off instead. Connaughton says the CIPD is advising its member employers to consider this as an alternative to cutting benefits altogether. “Offering to give people an extra day leave on their birthday, for instance, is a very personal, emotive, positive way to give people some extra time off.”

Online jobs search firm Indeed, which employs 1,000 people in Ireland, has recently begun to offer what it calls “You Days” – a company-wide perk which gives all employees a day off at the same time.

FLEXIBLE WORKING

BUT what seems like a notable omission from the CIPD’s ranking of most popular perks is remote and flexible working, given how much it has been talked up as a key benefit in the post-Covid era.

However, Connaughton reports that in the 12 months up to January this year, organisations had been getting a lot of requests for remote and flexible working, and around 70pc of firms were offering some form of it – but less than one day a week on average. But the CIPD’s June 2020 survey reveals that 70pc of employers said they were now willing to offer a degree of remote working in the future that they hadn’t been willing to offer in the past.

Caroline McEnery, director of the HRSuite, agrees that flexible working and remote working have been among the most desired benefits for some time but that, post-Covid 19, they are likely now to be the absolute number one for many employees.

The financial benefit, she says, is about cutting down the cost of commuting, including the money saved on takeaway lunches and coffees, among other things. Some families may save on childcare costs if their hours were more flexible.

“The advantage to them is not just economical and financial, but also from a managing work-life balance point of view,” she said.

Furthermore, employers can give you a taxfree allowance of up to €3.20 a day to cover the costs of working from home (namely heating, electricity and broadband), although McEnery notes that this is not a legal obligation. If your costs exceed €3.20 a day you can still claim tax relief yourself on the balance at the end of the year, although you can still apply for this tax relief if your employer doesn’t pay anything towards your remote working costs.

EMPLOYEE WELLBEING

THERE can be indirect financial benefits, too, from perks that come under the banner of ‘employee wellbeing’. For instance, if you have certain health issues or financial worries, some companies will offer free or subsidised access to qualified and certified counsellors and financial advisors.

“I think getting advice and guidance that’s objective and independent to help people in that regard is very much appreciated and seen of value,” said McEnery, adding that such services can be very expensive otherwise, but also difficult to find.

She believes that the novelty value of things like on-site facilities and free-food made famous by the likes of Google, Facebook and other tech multinationals has worn off. “Now people I think are putting more weight on financial advice, wellbeing, employee assistance, those kind of things.”

Ultimately, the value of employee benefits is often connected to the life stage of the person, said Connaughton. “So someone who is finished college and going into a job is more likely to be looking for development and time-off and things like that. Whereas top-ups to maternity and paternity benefit will have much more value in a few years’ time if you are starting a family.”

McEnery agrees. “I think when you start with things like healthcare and flexibility and remote working and pensions, they’re comparable, and it’s easy for the employee to do a cross-reference with those.

“When you get into the ones that are more personalised, like the gym membership or employee assistance... the benefit is based on your personal circumstances and your personal preferences.”