The majority of those running small and medium-sized business are planning to expand the range of employee benefits offered, in a bid to boost retention and recruitment levels.
The survey, by MetLife UK, shows that six out of 10 SME senior managers said they would increase the benefits on offer within the next two years.
Its also found that one in four of those running SMEs (24 per cent) plan to significantly increase their employee benefits packages. In contrast 33 per cent said they will “slightly expand” the benefits on offer, by adding extra services or enhancing terms.
In this research MetLife UK surveyed companies employing between 50 and 300 staff. This sector – which covers around 34,000 businesses, employing 3.3m people – has traditionally been less likely to offer the full range of employee benefits.
MetLife UK found that within this sector it was companies employing employing between 100 and 199 staff are the most likely to significantly increase benefits, with 27 per cent saying they will offer new benefits compared with just 19 per cent among companies with 200 to 300 staff.
Around one in five (19 per cent) of SME managers said benefits which specifically address health and wellbeing would be their first choice. In contrast around one in 10 (11 per cent) said they would like to see benefits which are suitable for employees who work from home.
MetLife UK’s employee benefits director Adrian Matthews says: “SMEs are very much focused on retaining and recruiting staff and increasingly recognise the role that a well-designed benefits package can play in addition to salary.
“Smaller employers are already competing for staff with large corporates on pay and business profile, and may struggle to attract and retain skilled employees if they cannot offer the benefits that many now expect at work.”
He adds that both group life and group income protection can be more cost effective than some employers think: costing around 0.5 per cent of salary for income protection and 0.2 per cent of salary for life.
MetLife’s research also found more than half of SMEs (51 per cent ) say sickness absence is a significant issue for their business – with 20 per cent saying it is a very significant issue. Policies like group income protection can help mitigate the impact.
The study found around 27 per cent of SME owners say benefits play a major role in engaging and motivating their staff, while 24 per cent say regularly communicating their benefits package helps with driving engagement.
MetLife says it is focusing on expanding its business among SMEs while also serving larger corporates. It is also looking to enhance strategic partnerships with leading brokers and EBCs.