SMEs advised to flex benefits to attract new staff

Small and medium sized enterprises are being warned by Kudos Independent Financial Services (Kudos) that they should not underestimate the value that flexible benefits could have in terms of staff attraction and retention. According to Alan Fergusson, Director of Employee Benefits Division at Kudos, flexible benefits should be used by growing SMEs to attract personnel to their company.

ìFor a growing company it is important to be able to attract the right calibre of personnel to the organisation. In a buoyant marketplace this means that the company needs to be offering an attractive remuneration package. Offering flexible benefits to employees provides SMEs with the opportunity to be able to compete with larger companies in the recruitment stakes,î says Alan Fergusson, Director of Employee Benefits Division at Kudos

Flexible benefits mean that employment packages can be tailored, as far as possible, to meet the needs of employees. Alan adds, ìEveryoneís circumstances are different. Just because people work for the same organisation or in a similar role does not means that their remuneration package should be made up of the same components. Utilising flexible benefits in order to create an employment package that is of optimum value to the individual should be of benefit to employees and hence employers.î

Employment packages are generally made up of the following components:

- Basic salary
- Opportunities for salary progression
- Working hours
- Annual leave
- Bonus schemes and performance related pay
- The benefits package (this will vary but may include company car, contributory pension scheme, childcare vouchers, private healthcare, flexible benefits packages and so on)
- Flexibility to vary working hours and/or to work from home

ìWithout generalising too much it is probable that younger employees are likely to be attracted by the possibility of increased annual leave entitlement or opportunities for salary progression. However benefits such as a contributory pension scheme or childcare vouchers will almost certainly be a determining factor for those that are some way along their career path. This information should be borne in mind once the interview process has been completed and the preferred candidate has been selected.î

Alan continues, ìUsing flexible benefits the employee can tailor a remuneration package towards their preferred package, probably within certain parameters set by the employer, which will suit them better than the default ëone size fits allí option.î

The great thing about flexible benefits is precisely that they are flexible. As employees remain with a company their outlook on their needs will change, this will sometime prompt people to consider a career move to a position with another company and possibly a more attractive remuneration package.

ìEmployers offering flexible benefits to their employees should ensure that there is a mechanism in place to ensure that the structure of the remuneration package is reviewed at regular intervals ñ at least annually,î comments Alan. ìEmployees would be given the opportunity on an annual basis to review and adjust the structure, to take account of their changing needs.î

Alan adds, ìStaff are often viewed by their employers as the most valuable asset that the business has, offering flexible benefits gives SMEs the chance to maximise the likelihood of attracting and retaining personnel to their organisation.î

Kudos specialises in due diligence and is one of the largest group pension providers in Scotland. In recent years, Kudos has developed its investment and trust services. More about Kudos can be found at www.kifs.co.uk or by calling the Aberdeen office on 01224 652100.