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Looking after your most valuable assetOn the assumption that we are now out of the recession Employee Benefits could become an important issue. The reason for this is that firms may have survived the recession partly through good planning but, in many cases, also as a result of the good will of employees who may have worked under difficult conditions and even accepted short-time working or pay cuts and freezes in order to ensure the survival of the business. Of course, it could be argued that had they not co-operated, their jobs might have disappeared, along with the company itself, so there was a degree of self-interest involved. Commitment should be rewarded However, it is also true that they could have taken a more blinkered approach and lost their jobs … while the employer lost everything. So there is considerable merit in reminding ourselves of the old adage that in any business, its most valuable resource is its employees. Whatever 2010 will bring for businesses in terms of growth – and it is to be hoped that those firms which survived have done so leaner and fitter – it is likely that employers will wish to review their remuneration strategies to ensure that these are flexible enough to reflect the needs of employees and to avoid the loss of loyal and productive staff to competitors. Money isn’t everything It is conventional wisdom to argue that money is not the main motivator in encouraging work. In fact considerable research has been undertaken in this area and the American academic Abraham Maslow developed his Hierarchy Of Needs model as early as the 1940-50’s. This outlined that once basic biological, physical and safety needs were met, people became motivated instead by the need to be esteemed and other desires. The relevance of this to employers is that, by recognising that money alone is not sufficient to motivate people to work, they can start to consider alternative and more flexible remuneration strategies. What is available? For example, starting from October 2012, employers without suitable Occupational Pension Schemes will gradually have to enrol members into the Government’s National Employment Savings Trust (NEST) as Personal Accounts are to become known. This is based on employer and employee contributions within a band of earnings. However, employers may find that if they offer their own pension scheme, employees feel more valued and are therefore better motivated. (Most employer schemes are also likely to be more suitable as they can include contributions based on all earnings.) More than this, employers can consider the needs of employees to have Life Assurance, Medical Insurance, Sickpay and other benefits that could be selected by each individual employee from a ‘Menu’ to reflect their own needs at the time. By creating flexibility, employers can expect to retain high calibre employees because each one can feel uniquely valued and rewarded. As with any form of financial decisions, it is important always to seek independent financial advice before making any decision regarding your finances. For further information, please contact your usual Argent adviser. Andy Rzysko - Director |
