Consistently reevaluating your employees’ benefits packages is pivotal in supporting employee satisfaction and boosting retention.
Moreover, trends in employee benefits change over time, so it’s prudent to periodically evaluate them to see if they’re still fit for purpose.
Payroll year-end presents an essential opportunity to re-evaluate your employee benefits package. In some cases, you might save money by cutting unused benefits and using the cash to beef up the benefits employees actually want.
Here’s how to do it.
The importance of benefit package reviews at payroll year-end
The end of the payroll year is a time when businesses are typically already reviewing their financials, making it a practical moment to align the evaluation of employee benefits with other accounting activities.
Here’s why you should consider a review:
- Strategic alignment: Reviewing your employee benefits package at year-end ensures that any changes made align with your business strategy for the new fiscal year.
- Tax considerations: It allows you to assess the tax implications of your benefits offerings, potentially uncovering efficiencies or incentives that could benefit both the business and employees.
- Employee satisfaction: This is also an ideal time to gather feedback from your team, ensuring their needs are met and that your package remains competitive in the marketplace.
What to consider in your review
Reviewing employee benefits isn’t just about ticking boxes – it’s about ensuring your package resonates with the people who make your business thrive. Modern employee benefits packages are more complex than ever, with company options, paid upskilling opportunities, and unlimited paid time off commonplace.
Here’s what to consider:
- Relevance: Your benefits should mirror the current realities of your employees’ lives. As they navigate life’s milestones – marriage, parenthood, education, and more – their benefit needs will shift. It’s your job to anticipate and respond to these changes.
- Competitiveness: Your benefits should not just be on par with industry standards but should aim to exceed them. Talented individuals have choices; so ensure your benefits are a compelling part of their decision-making process.
- Cost-effectiveness: It’s all about smart spending. Are your benefits giving you the best bang for your buck? As fiscal years draw to a close, it’s time to negotiate and possibly reinvent your benefits to ensure they’re financially sustainable and still attractive.
How to conduct the review
Delving into a benefits review can be complex. By breaking it down into manageable steps, you will be able to see clearly where your benefits stand and where they need to go.
- Analyse current usage: Look at the data. Which benefits are employees using, and which are gathering dust? This can tell you much about what’s valued and what might need a rethink.
- Employee feedback: There’s no better way to understand the impact of your benefits than by going straight to the source. Engage with your employees, listen to their feedback, and use it to shape a benefits package that truly matters to them.
- Market research: What’s new and next in the world of employee benefits? Keeping your finger on the pulse of emerging trends will help ensure your offerings are fresh and relevant.
Implementing changes
After careful review, you may find that some changes are in order. How you roll out these changes is as important as making the changes themselves.
Done right, it can enhance buy-in and appreciation from your team.
- Communication: Be transparent and clear about any changes. Good communication can make all the difference in how your team receives and understands changes
- Education: Sometimes benefits are underused because they’re not well understood. Offer training sessions to bridge the knowledge gap.
- Phased approach: Big changes can be overwhelming. Introducing them gradually can help employees adapt more comfortably and ensure a smoother transition.
Summing up
The payroll year-end acts as a foundation for future growth. By taking the time to review your employee benefits package during this period, you ensure that your business remains a competitive and attractive place to work.
It’s about showing your employees that you value their hard work and commitment, not just through words but through actions that directly enhance their professional and personal lives.
With professional support from an accountancy firm like Smith Butler, you can use payroll year-end as an opportunity to streamline and improve employee benefits packages.
Contact us today to find out how we can assist.