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A job hunter has to choose between two job offers they have had from two companies which are both within the same postcode, with the same contractual hours of work and with the same job prospects:-

 Job 1.

  • Salary of £20,000
  • 4 weeks paid holiday
  • Statutory access to a stakeholder pension (no contribution made by the employer)

Job 2.

  • Salary of £20,000
  • 4 weeks paid holiday
  • Private pension provided with contributions equivalent to 3% of salary to be paid by the employer after 12 months, rising to 5% after 3 years service

So the difference here is the pension scheme, and with this benefit, it is extremely likely that the candidate would opt for Job 2.

Under current legislation, an employer of 5 or more staff merely has to display a certificate showing that a Stakeholder Pension has been designated, with no legal obligation to make any contributions. There are changes ahead but the impending pension reforms will mean employers are still not obligated to contribute.

So why don’t all employers just do this? It is because employers are becoming more and more conscious of the type of staff they want to attract as well as retaining the fully trained and competent staff that they already have.

Employers are looking to reward and encourage loyalty; one of the methods of this would be to offer an employee benefits package. This is not only of benefit to the employee but also the employer as when people feel valued, it creates a happier workforce.

There is a full menu of staff benefits which we can explain, however, the most common does tend to be a company pension scheme. So it does go to show that it’s not all about the wage.

Employers should ask themselves; is the benefits package they are currently offering (which may be none!) attracting the right calibre of staff? Do employers find themselves regularly having to replace staff when they move on to ‘greener pastures’?

Regardless of the type of business they are in, each employer should have some idea how much time and money it costs to train and induct new members of staff. If you don’t currently, it is a worthwhile exercise.

Employees are at the heart of any business, but despite this the many small-business owners mistakenly believe they cannot afford to offer benefits. The truth is they can, that’s if they actually want to!

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