Managing Benefits In A Downturn - Taking Advantage Of Your Existing Packages

As the economy slides closer towards recession, it's

time to take precautionary action and tighten belts. Ian Luck

outlines some of the ways companies can reassess employee benefit

provision.

Individuals and businesses are facing the same challenges

? rising prices, falling stock markets and a higher cost

of borrowing. Money is tight within most organisations and

companies are resisting excessive pay increases. While low salary

rises may make good economic sense, they do little for employee

relations. In spite of the prospect of a tougher job market,

companies will want to look after their people and prevent

unnecessary staff turnover.

Getting Value For Money

When spending more is not an option, spending more wisely is an

absolute must. Employee benefits take up a large part of a

company's overall costs, yet there are many ways to save

money.

When companies look towards maximising the impact of their

employee benefits provisions much is made of flexible benefits

arrangements. While this is certainly an increasingly popular and,

in many cases, sensible route to go down, there are less costly

ways of getting the most out of an existing employee benefits

package before companies need to commit to the expense of a fully

fledged flexible benefits package.

By introducing a range of voluntary benefits to staff, such as

life assurance, critical illness cover, medical and dental

insurances, the employee benefits package can be enhanced without

any additional cost to the company.

For many years, employers have offered discounted goods

arrangements as an added benefit. Usually restricted to local

suppliers, the impact can be magnified using a discount club that

has negotiated discounted goods with larger national affiliates.

These opportunities would rarely be possible for smaller

companies.

Salary Sacrifice

Salary sacrifice benefits are probably the easiest way for a

company to save money and boost staff benefits at the same time. It

is a legitimate method of using the tax rules to the best possible

advantage and the vast majority of companies will already be

offering salary sacrifice childcare vouchers.

There is no real reason why more should not offer their pension

benefits on a salary sacrifice basis. Savings in employer National

Insurance Contributions can be used to offset the cost of

installing such a scheme or of reorganising existing pension

arrangements. Alternatively this saving can be shared with

employees, all or in part, as additional...