Employee Benefits for Small Businesses

Which Employee Benefits Should You Offer?

As a UK business, you have a number of mandatory benefits that you need to provide to your people. These include an auto-enrolment Workplace Pension with a statutory minimum employer contribution of 3%. In addition, you also need to pay statutory sick pay and maternity pay as a minimum..

Workplace Pension Scheme

This is usually the first employee benefit a business will implement. If you employ anyone in the UK, it’s a mandatory requirement to provide an auto-enrolment Workplace Pension and meet the minimum contributions. It’s crucial that your pension scheme is set up correctly, as you can face big fines from the Pensions Regulator if you don’t follow the guidelines.

Our 2024 Workplace Pensions Survey found that while 92% of employees have opted into their current scheme, 60% have no idea how much they need to save for retirement, and 66% want their employer to offer more education around their pension.

There’s a lot to consider when it comes to a Workplace Pension, you need to think about:

• What your legal requirements are
• What is needed to retain and recruit the best staff
• Which provider is most suited for your business and what will it cost
• The AMC and range of funds available
• How to communicate the scheme to staff to ensure they understand the arrangement.

Our Drewberry experts take the headache out of implementing a workplace pension including supporting with administration, communication and making sure our clients continue to meet their legal requirements.

For more information explore our comprehensive guide to the top auto-enrolment Workplace Pension providers in the UK, or you can get in touch with us below.

Going Beyond Your Mandatory Requirements

Beyond these mandatory requirements, knowing what additional benefits to provide your small team can be tricky. Most importantly, it depends on the needs of your workforce and where their priorities lie. There’s little point to providing benefits staff don’t use or value.

Some of the most sought-after benefits by employees include:

• Reduced working week (i.e. four day week)
• Flexible/hybrid working
• Private Health Insurance / Health Cash Plan / Virtual GP
• Enhanced time off / sabbaticals
• Enhanced pension contributions
• Protection insurance (such as Life Insurance, Income Protection, and Critical Illness Cover).

As you can see, this employee benefits wishlist blends the more traditional benefits (such as protection insurance) with the holistic aspects. In fact, some of the most-valued rewards are low-cost or even free to implement, such as flexible hours and work-from-home options.

If you think you can’t offer insurance benefits as an SME, think again. You typically need three or more employees to get a group scheme off the ground, and I’ve personally helped many small companies to get their own insurance benefits that employees truly value.

Nadeem Farid
Head Of Health & Wellbeing Benefits

Group Insurance Plans For Small Businesses

If you’re looking for small business insurance plans, there are four main products you can offer employees:

• Business Health Insurance
• Group Life Insurance / Death in Service Cover
• Group Income Protection
• Group Critical Illness Cover.

Along with the core insurance coverage, these policies come with an array of additional perks that your team can use when they’re not making a claim – giving your SME employee benefits more value for money.

Business Health Insurance

Business Health Insurance pays for your employees to have private medical treatment for eligible conditions. This allows them to skip long NHS waiting lists and get treatment exactly when they need it the most.

Prompt treatment for health problems reduces time employees spend off sick. This is something that’s of particular benefit to small companies, where there’s often limited scope to transfer work to other employees should someone be absent.

Corporate Health Cash Plan

While Group Health Insurance is a popular and sought-after benefit, it can be pricey. Smaller companies tend to feel the cost of these schemes, as they don’t benefit from the economies of scale that larger companies do.

However, there is an alternative: Corporate Health Cash Plans.

A Health Cash Plan pays towards everyday healthcare needs, such as dental checkups, fillings, eye tests, glasses and physiotherapy. Employees get a set amount of cash they can claim back each year (depending on the level of cover you go for), for various healthcare treatments, even including things like NHS prescription charges.

As a small company, the benefits Drewberry sorted for us have put us on par with much bigger competitors, helping us attract the best talent. The team is amazing – always helpful and attentive to our requirements. Our experience was extremely professional, friendly, and a truly five-star service. Thank you!

Lauren Alper – Trailmix

Read about Trailmix’s experience here .

Death in Service Insurance

Also known as Group Life Insurance, Death in Service Cover pays out a lump sum should one of your workers pass away while working for your small business.

This lump sum is a multiple of their salary, typically between two and four times earnings. The death doesn’t have to occur at work or in the workplace for the insurer to pay out.

In the event of a claim, the insurer pays out into a company-owned trust. The trust distributes the funds to the employee’s family, sidestepping inheritance tax on the payout. The family can use the money however they see fit, from covering funeral expenses to meeting their everyday spending needs.

Relevant Life Insurance For Micro Businesses

If your business has fewer than three employees, or if you only want to offer Death In Service for your directors, you can offer something called Relevant Life Cover.

Relevant Life is a tax-efficient Life Insurance policy that your business pays for. With this policy, the insurer underwrites you as an individual, meaning you’ll need to answer a series of medical questions about your health and lifestyle. With a full Group Life Insurance scheme, very few workers will need to go through this process.

It’s such a slick and easy process to set up cover through Drewberry and keep the policy updated with joiners and leavers. They do so much for you, taking the time to get to know you, what you want to achieve, and why you want to achieve it.

Michelle Donlin – Profile Pensions

Read the difference a Death In Service policy made to Profile Pensions.

Group Income Protection

Group Income Protection (also known as Group Sick Pay Insurance) is a type of insurance designed to enhance your company’s sick pay policy.

Most employers offer a period of full sick pay to their workers if they need to take time off as a result of illness or injury. Once that period of full sick pay is over, employees move to Statutory Sick Pay (£116.75 per week for up to 28 weeks).

Statutory Sick Pay is only a minimal benefit, and most people would struggle to survive on this alone. A Group Income Protection policy steps in if an employee will be off work for 13 weeks. paying a proportion of workers’ wages as a monthly benefit if they can’t work through illness or injury.

Executive Income Protection For Directors

As with Group Life Insurance, you typically need three workers to set up a Group Income Protection scheme.

For very small businesses (or companies where only the director is looking for Income Protection), one option to consider could be Executive Income Protection.

This is a company-paid Income Protection policy for a single individual. It offers tax efficiency compared to paying premiums personally. However, as with Relevant Life Insurance, it’s worth noting that your insurer will need to underwrite you individually to get the policy set up.

Group Critical Illness Cover

Group Critical Illness Insurance covers your workers should they develop a critical illness while working for your business.

The most common claims on such policies are for cancer, heart attacks and strokes. However, most policies cover at least 12 critical conditions as standard, with the option to add an additional 20-25 illnesses for an extra premium.

The Critical Illness payout is a multiple of an employee’s salary, typically between one and five times their yearly earnings.

Additional Benefits And Support Services

Alongside the core insurance, small business insurance plans come with a number of perks that employees can use every day. These typically include:

• Employee Assistance Programmes
• Digital GP service
• Second medical opinion
• Mental health support
• Physiotherapy
• Medical helplines staffed by trained nurses.

These extra perks are brilliant for supporting employee health and wellbeing. They’re designed to help workers address niggling issues before they become bigger medical concerns that require treatment, time off work, or a claim.

We’ve got a whole guide dedicated to the top free benefits that come with insurance benefits.

What Are The Best Low-Cost Employee Benefits?

There are plenty of low-cost or even free small business employee benefits that can make a major difference to you and your workers.

Benefits for Work-Life Balance

A good work-life balance is essential for healthy employees and productive workforces (it’s the top reason for employee happiness at work).

If you don’t prioritise your employees’ work-life balance, it can lead to burnout, health problems, and stress-related illness. And with 91% of employees experiencing stress in the workplace, it’s never been more important to proactively tackle the issue.

Some work-life balance benefits you can offer include:

• Flexible hours and working patterns
• Extra holiday for length of service or for birthdays
• Regular time off or reduced work hours
• Enhanced parental leave
• Holiday trading.

If you’re a small business, benefits that improve work-life balance are fairly simple to introduce. You can start by giving employees more time off and more control over when they work.

Benefits To Improve Employee Engagement

Employees who aren’t enthusiastic about their work are more likely to leave. In fact, 51% of employees told us they’re ready to move within the year. This can have a huge impact on small businesses – resulting in increased staff turnover and recruitment costs.

That’s why it’s so important to think about how to make your working environment more enjoyable for employees, rather than focusing purely on work output (employees say a positive working environment is the top consideration when choosing an employer).

Some ways to improve engagement include:

• Employee rewards and public displays of appreciation
• Free gifts as a bonus e.g. cinema / event tickets, high street vouchers, or a bonus payment
• Company organised social events and wind-down activities
• “Open door” policies and two-way feedback with leadership team
• Education and training opportunities.

When employees engage with your business, they associate the success of the company with their own. Benefits that help with this include those which reward employees and show recognition. Even something as simple as a company get-together can be the first step to showing employees that you value them.

Benefits To Support Family Life

It’s hard to juggle working with childcare. Many parents find it all but impossible, with many withdrawing from the workplace altogether. In the South East of England alone, childcare costs can swallow up to 54% of parents’ yearly salary.

It’s clear that parents and carers need support – which is where your small business can step in and help. Some family life benefits include:

• Workplace Nursery Scheme
• Enhanced maternity and paternity leave
• Flexible hours and part-time working patterns
• Opportunities to work from home
• Child sick leave.

Employers can also assist those with childcare needs. Some already do so and offer flexible working or the option for employees to work from home.

Flexible working has a range of benefits beyond simply giving parents more time with their children – it benefits your business too. In fact, flexible and convenient working hours is the second most important consideration for employees when finding a new job.

Employee Discount Schemes

Given the ever-increasing cost of living, many employers are turning to employee discount platforms to help their team tackle rising costs.

For only a few pounds per month, a retail discount scheme will provide your employees with significant savings on everyday expenses such as groceries, clothing, travel, and fitness. Most discounts are offered in the form of vouchers or instant cashback through the platform.

When you set up your employee benefits through us, you’ll get access to our My.Drewberry benefits platform offering thousands of discounts across a number of retailers.

It’s really easy to set up an employee discounts scheme. Give us a call on 02074425880 or email help@drewberry.co.uk to get started.

Health And Wellbeing Benefits

Workplace sickness costs UK businesses more than £100 billion a year, according to the Institute for Public Policy Research. And another study by Metlife found that 59% of workers had worked through sickness instead of taking time to recover. With productivity and your bottom line at stake, it’s crucial for your business to prioritise your team’s wellbeing.

There are a few different health and wellbeing benefits you can implement to help keep your team healthy, happy, and productive:

• Discounted gym memberships
• Healthy snacks
• Active team-building events (just be mindful of employees with mobility issues)
• Mental health apps
• Employee Assistance Programmes
• Standing desks and ergonomic workstations.

By supporting your team’s mental and physical health, you’re taking proactive steps to reduce sickness burden on your business, which is particularly important for a small company.

How To Choose The Right Small Business Benefits

Selecting the right benefits for your small business starts with assessing your employees’ needs and understanding what matters most to them. There’s no use investing money into rewards that your people don’t value and won’t use.

If you’ve got a more active workforce, perhaps Private Healthcare or a Cycle To Work scheme could be a good option. If a number of employees are parents, flexible working or a Workplace Nursery would be a lifeline.

You won’t know unless you ask them, and you can’t attract new talent if you’re not competitive. You can achieve this by:

• Benchmarking against competitors, this can provide insight into industry standards and ensure you’re staying competitive
• Aligning these benefits with your company’s long-term goals, ensuring they support productivity and employee retention
• Working with benefits experts (like the team at Drewberry) to tailor a package that balances employee satisfaction with your budget.

We’re always on hand to chat through your options, so give us a call on 02074425880 or email help@drewberry.co.uk to get started.

Sort Your Small Business Benefits With Drewberry

At Drewberry, we understand the unique opportunities and challenges that come with running a small business. We know employee benefits inside out, and have helped countless businesses like yours to create a truly valuable benefits package for their people.

Along with years of expertise and our own clever tech to keep things organised (check out our My.Drewberry employee benefits platform), we have great relationships with the top providers, meaning we can unlock the most competitive rates.

To get started, give us a call on 02074425880 or email help@drewberry.co.uk.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

• We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
• You’ll speak to a dedicated expert from start to finish
• We are very proud of the 3900 and growing independent client reviews rating us at 4.92 / 5
• We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐
• Claims support when you need it most.