Rewarding staff with benefits and allowances

The level and range of benefits that an employer offers are a key part of the reward mix. But employer and employee often underestimate the considerable financial value that these benefits represent, warns IRS Employment Review, published by LexisNexis Butterworths today (June 17 2005).



While reducing unauthorised absence is a key priority for the majority of UK employers, fewer than 10% (6.5%) of organisations surveyed pay an attendance allowance ñ typically to those employees with an unblemished attendance record ñ to minimise absence.

In the first part of its annual review of benefits and allowances provision, IRS Employment Review looks at the different types of general allowances and health-related policies offered by UK employers. Employee benefits cover compensation provided in addition to cash pay, and have the potential to improve their appeal to employees and potential recruits.


Key survey findings include:

A quarter (23%) of respondents provide a standby allowance (for employees who may have to work beyond their core hours at short notice) while a third (34%) of employers offer additional payments to staff who are actually called into work in an emergency.

Almost nine in 10 employers surveyed (87%) allow employees paid time off during working hours to attend medical appointments. Just under half (46%) of surveyed organisations indicated that they do not operate formal guidelines or impose limitations on this type of leave, although some say that their line managers grant this type of leave at their discretion. A few organisations state that each case is considered on its own merit or ìwithin reasonî.

Almost two-thirds (64%) of organisations in the IRS sample provide private medical insurance (PMI) for staff.

Two-thirds of surveyed organisations (67%) offer PMI for the employeeís partner, although just one-fifth open up this benefit to all employees. Family cover is available in three-quarters (76%) of organisations, with just a quarter offering this type of cover to all employees

Permanent health insurance is available for at least some employees in 44% of surveyed organisations.

Counselling and/or employee assistance programmes (EAP) are available to employees in half (49%) of the organisations surveyed.


Nearly two-thirds (66%) of employers provide telephone assistance to staff as part of their EAP, while face-to-face counselling is offered by seven in 10 (69%) organisations. More than four in 10 employers (44%) provide both.

Dental insurance ñ almost 8% of organisations provide dental cover.

Craft workers, and other skilled or technical workers, typically require a range of tools for work. Purchasing new tools and replacing old ones can be costly. Just 6% of organisations pay an allowance to help cover the cost of employeesí tools.

IRS Employment Review pay and benefits editor, Sheila Attwood said: ìThe level and range of benefits offered by an employer are a key part of the reward mix. Having an attractive benefits package in place can help improve employee motivation and commitment

ìIncreased competition for talent has prompted many organisations to adopt a more sophisticated reward strategy for attracting and retaining staff. People now have higher expectations of what they want from employment and, as IRS research has shown, some employers have adopted a ìtotal rewardî framework to enhance their reputation in the jobs market.î