Flexible working makes healthier staff
February 17, 2010
Research has indicated that employees that are able to influence their own working hours are more likely to have good mental and physical health.
The study, carried out by researchers from the Cochrane Library looked at a number of studies carried out on 16,000 people, and found that people who had flexibility around their working hours may have better blood pressure and a healthier heart. Importantly, it was when the workers themselves controlled the flexibility that the positive health benefits could be seen – if the employer gave flexible working but controlled the hours, this was found to have no positive effect, or could even have a detrimental effect.
Although there has always been a belief in the general benefits of flexible working options, this study has now provided evidence that this is the case.
Last year the right to request flexible working was extended to parents of children up to the age of 16, following a review of the legislation. Whether this will ever be extended to all workers has been debated widely, however this is unlikely in the short term. What is clear, however, is the more flexible employers can be in relation to their employees’ working hours, the better the effect on the general wellbeing of their employees will be.
The end is in sight for Childcare Vouchers
September 30, 2009
Having just implemented a childcare voucher scheme in my organisation, I’m quite surprised and a bit perplexed at yesterday’s announcement that the existing tax breaks on childcare voucher schemes are to be removed from 2015. The Government described the existing schemes as ‘badly targeted tax reliefs’, because apparently around one third of the tax relief goes to higher tax payers, which is a very small amount of parents in the UK. However 35,000 employers currently offer childcare vouchers, and this helps 340,000 families with their childcare needs.
Gordon Brown said that the reforms are being used to generate money that will be used to provide free childcare for lower earning parents. However as would be expected, many of the leading voucher providers have criticised the plans, as this will make family life and balancing the struggles of work and childcare more difficult for many. With the possibility of savings of up to £1,000 for parents that are involved in a scheme, this is quite a big dent on family income, and could have an effect on the number of parents that are able to work when they have children.
Vouchers for carers
March 19, 2009
As I’ve written about in the past, there is a government scheme called childcare vouchers through which a parent can save money on their childcare costs by purchasing vouchers through their gross salary payment which can then be redeemed for childcare from their registered nursery, childminder, after-school club etc. The employee saves money on this because the taxable part of their salary payment becomes less and they therefore pay less tax and National Insurance. This scheme saves parents across the country a fortune each month and is a great thing for industry as it helps more people to afford to work when they have childcare needs, keeping more skilled and experienced people in the workforce and labour market.
Now, a group of high-profile employers has called to replicate this scheme for people who have caring responsibilities. Companies involved in the group, which is called ‘Employers for Carers’ include BT, John Lewis, IBM and HSBC. The group wants to see employees who care for someone who is ill or disabled to be able to access the same tax incentives as parents. In a report brought out last year, the Department for Work and Pensions recommended this development and asked the government to look into it with a pilot scheme; but nothing has happened yet, possibly because of the recession.
The development of the childcare voucher scheme into one which includes employees with caring responsibilities would follow the general development of legislation relating to these two groups. For example, the right to request flexible working is now applicable to those with responsibilities for caring for an adult, as well as parents of a child.
This is one to watch in the next couple of years, and it’s likely the development will happen in the future if the Employers for Carers group continues to campaign. As Iain Mc Math, a member of the group said in People Management Magazine:
“employers know that even though we are in a recession, the need to retain their talent is key’.
This is the reason that campaigners will still call for the vouchers to be extended to carers even during the financial downturn, so we may see more news about this coming out in the next few months.
Voluntary benefits
March 7, 2009
Many employers are currently reviewing their employee benefits packages in light of the recession, and a few have started to reduce spending on benefits - for example reducing or ceasing employer contributions to company pension schemes – in order to make financial cuts, often in order to avoid redundancies. However there are opportunities to maintain some employee benefits with little or no cost to the company; through the provision of voluntary benefits.
Voluntary benefits are those that employees can purchase through their own salary, either before or after tax and NI deductions are taken, depending on the scheme. By purchasing the product or service this way, the employee gains a discount and therefore a ‘benefit’. Voluntary benefits that are purchased out of an employee’s pre-tax salary payment are called ‘salary sacrifice’ benefits and include childcare vouchers – which are a great way for parents to save a lot of money on their childcare, provided it is through a registered childminder, nursery, after school club etc. (For more information on childcare vouchers see my post ‘Help staff benefit from cheaper childcare’ (April 17th, 2008)). Another good option is the cycle to work scheme – a government initiative to encourage more people to travel to work via a more environmentally friendly and healthy method. This benefits the employee in two ways: firstly, the bike is bought out of the employee’s gross salary, meaning that less tax and NI is deducted on the remaining amount; secondly, there are larger providers of this scheme so they usually provide a discounted price for the bike in the first place. Both the childcare vouchers and cycle to work schemes are really easy to set up and don’t cost anything to run.
There is a massive range of discounted voluntary benefits that can be purchased out of an employee’s net salary – including healthcare options such as medical or life insurance, gym membership, discount vouchers for retail outlets or supermarkets (good if you know you spend a couple of hundred pounds a month on food in one particular store), season ticket loans for public transport (this works by the company purchasing an annual ticket – which is cheaper than shorter tickets – and then the employee pays the company back over a year), and loads of others. Very large companies often run their own scheme and use their size to negotiate really good discounts from leading outlets, and this way they can tailor their scheme to the exact needs and desires of their workforce. Smaller companies however will not have this kind of leverage and will often have to join generic schemes that are run by larger outsourced benefit providers, which there are many of.
There are other potential issues with voluntary benefits schemes, such as monitoring the quality of discounts and services provided (as a poor experience of an organisation that an employee gained through the benefits scheme could reflect badly on the employer), however in these difficult economic times voluntary benefits could offer a valuable alternative to costly existing schemes whilst maintaining some kind of benefit to employees.
Reviewing employee benefits
February 6, 2009
In the current economic climate, employee benefits are possibly one of the last things on many employers’ minds; unless they are thinking of ways to cut back on costs by reducing spending on benefits or removing schemes altogether. For example, the company that my colleague formerly worked for removed the employer’s contribution from the pension scheme following a consultation exercise. Basically the choice was that the pension contribution had to be removed, otherwise redundancies would be necessary.
These often necessary changes to employee benefits are nonetheless extremely damaging to employee morale, and to keep hearing negative news with nothing to counteract it will increase the negative effects of the recession, i.e. employee insecurity, depression and de-motivation. However the budgets for employee benefits will continue to be squeezed, making it hard for HR or Reward/Benefits departments to maintain morale and faith in the company when they’re taking away the very things they have used to increase it in the past.
This is a perfect time to review the benefits package on offer to employees. In the same way that different benefits will appeal to different employees due to their varying personal circumstances, benefit choices will change depending on the external environment and the ways in which employees need to be supported.
As I said a few weeks ago, when I recently visited my GP he told me that his workload had increase due to the recession as he was treating a lot of stress and depression related illnesses. When I have consulted in the past on employee benefits, an employee assistance programme has been one of the least popular choices, but at the moment I bet a lot of workers across the company could really benefit from this kind of service. Another option that could help out a lot of people at the moment might be providing some time with a financial advisor; so that people can discuss their options if they have concerns about mortgage, bad credit loans or credit card repayments. This would be a fairly low-cost option but shows that the employer is aware of the personal issues facing many people at this time.
Companies should also consider flexible working options as an alternative to financially-based benefits, for example offering flexitime would be a great boost to many people; and although this might be quite difficult to set up initially, does not have a long term cost. Giving employees the opportunity to purchase additional holidays means that people can choose to take more time off if they wish (and therefore does not impose another benefit that some people may not necessarily want) and if employees purchase the days, can actually save the company money in salary and National Insurance payments.
This is a time for HR and benefits professionals to be creative with their budgets and time, rather than simply taking everything away and sending out the message that there is nothing that can be done because of the recession.
Happy parents make happy employees
December 15, 2008
Some family friendly processes have become part of general employment law and practice, such as parental rights to request flexible working and parental leave. Others are more ad hoc and individual companies implement a variety of ways of engaging employees that have family or parental commitments. It makes business sense to look at the different backgrounds, interests and outside commitments of both current and potential employees. Firstly, the more narrow the description of an ideal employee becomes, the more narrow the pool of potential candidates becomes as well, and you may find yourself competing in ever decreasing circles for the employees who seemingly have the right credentials and outside commitments (or lack of them) but may not have the best set of skills and experience for the job you are recruiting for. Having a diverse workforce, with employees from different backgrounds, age, family commitments etc brings with it a diverse range of previous experience that can add real value to the business.
An inexpensive scheme for parent employees is the childcare voucher scheme, which I wrote about a few months ago (‘help staff benefit from cheaper childcare’, April 17, 2008). This basically works through salary sacrifice whereby the cost of vouchers is deducted from an employee’s salary before tax and NI deductions are made, therefore the tax and NI paid on the remaining amount is reduced. Normally the cost to administer the scheme is offset by the NI savings that the employer makes on the reduced gross salary payment to the employee, so this is what makes it a winning scheme all round.
The childcare vouchers option has become very popular in recent years, but the affordability looks set to be challenged in the future following a High Court ruling that led to the benefit entitlements for women on maternity leave being changed on 5th October this year (‘New maternity rights from 5th October’, September 23, 2008). Now that women on maternity leave will be entitled to retain the same benefits throughout their leave, employers may end up having to pay for vouchers the employee may already be taking through the scheme, even though the vouchers are based on salary sacrifice and the employee will be entitled to less or no salary due to maternity leave. This issue is causing many employers to rethink the scheme if they already have it, or may cancel plans to introduce it in the future.
Some companies think quite creatively about what sort of incentives or benefits they offer to employees who are parents, from crèche facilities on site to annual events involving all employees and their families. Someone I know works at a large retailer, and employees who are parents in that company are given filled party bags for each of their children at Christmas each year, which I think is a great idea.
What does your company do for employees who are parents? Do you think you work for a family friendly employer? What do you think of the risk to the childcare voucher scheme following the changes to benefits on maternity leave? If you have any thoughts on this or any other article on the site, leave a comment.
Research shows positive attitudes towards new pensions plans
December 10, 2008
Back in February I wrote about the pensions reforms due to be implemented in 2012. The new ‘personal accounts’ scheme will automatically enrol workers over the age of 22 and earning at least £5000 into a personal pension account, unless they are part of a qualifying employer pension scheme. People will be able to opt out, but it is hoped that the automatic enrolment will encourage people to continue to save for their retirement. There will be a minimum contribution of 4% of the worker’s salary, and the employer will have to contribute a minimum of 3%, with a further 1% paid in by the Government as tax relief.
Today the Department for Work and Pensions is publishing research that has revealed strong backing for the pensions reforms. 70% of respondents that will be eligible for automatic enrolment thought that they will save for their retirement with the scheme when it is introduced. The research found that people are well aware of how important it is to be in a pension scheme, and look forward to being able to benefit from the new scheme.
Personal mobile phone policies
October 22, 2008
We’ve had a couple of issues recently with employees using their personal mobile phones in work time, and it’s given us reason to review the way the current policy is communicated, implemented and monitored. The subject of personal mobile phones in work is likely to continue to grow, because of the continuing evolution of mobile technology and the increasing emphasis on the need to be able to communicate with anyone at any time. I’m going to sound really old now, but I remember (shock horror!) not actually owning a mobile phone, and I also remember the days before text messaging existed, yet now I’m as obsessed with checking my phone every 5 minutes as the next person. I haven’t kept up with the latest nifty applications mobile phones can offer, but with exciting new phones like the Apple iphone or Nokia 6500 Slide, it’s certain that mobile phones are a big part of everyday life, and therefore an employment issue that organisations can not ignore.
The company employee handbook in my organisation states “employees must ensure personal mobile telephones are switched off at all times during working hours”. However some managers within the company don’t mind their staff taking or making important personal calls in work time as they wish to trust their staff and feel that as long as they are not ‘taking the mick’ by spending an excessive amount of time on the phone, then there is no need to ban calls altogether. This is fine, except when you get to the situation where the manager feels that one member of staff in the team has started to take the mick, and it’s hard to address this because the individual could argue that everyone is doing the same thing, so where’s the difference? It’s not easy to determine an acceptable level of personal calls, so the most straightforward way that’s least likely to cause issues later on is to stick to the policy and ask employees to make personal calls in breaks and at lunch time.
If the company does operate a scheme such as this, there need to be a way that family members can contact the employee in the case of an emergency, so that they can still be contacted if their phone is switched off in work time. This could be part of a new employee’s induction; when the mobile phone policy is explained to the employee, ensure they are told to give the work number to their next of kin, but that this is to be used only for emergencies and not just to phone up for a chat!
If you have had any issues with employees making excessive personal calls at work, let me know.
Studies show Pensions are the most popular way to save for retirement
October 8, 2008
Despite the worsening economic climate its appears that Employee confidence in pensions is still the best way of saving for retirement.
According to the latest survey from the National Association of Pension Funds (NAPF) Worker confidence in pensions schemes has risen from 3 to 22 per cent in 2008.
41 per cent of the 1,198 UK employees believe that pensions are the most popular way to save for retirement.
The rise in Pension confidence was down to the increased uncertainty in property as an alternative way to fund a retirement.
Joanne Segars, the Chief Executive of NAPF has said:
“The welcome boost in pensions confidence shows the traditional view of ‘at least I’ve got my pension’ has started to make a comeback. Psychologically, employees are ring-fencing their pension from the other financial pressures they are facing. The decline in adverse publicity about the security of pensions has also had a part to play. The message that the system in the UK is one of the best protected in Europe must be getting through.”
Incentive scheme nightmares
September 30, 2008
Having recently been involved in introducing a variety of different bonus/commission/incentive schemes, I’ve experienced the difficulties organisations face in putting these sorts of schemes with the aim of encouraging increased productivity, commitment and results, whilst making the process equitable and inclusive for all staff.
The first issue I have faced is that, working for a heavily sales based business, all bonus and incentive schemes are based on money brought in – i.e. as a percentage of a ‘deal’. This is good because the bonus is based on a tangible measure – a number, but it does mean that a scheme brought in across a company will only benefit those who have the opportunity to earn, i.e. have contact with customers in order to increase orders or ‘up-sell’, which means more ‘back-office’ or production staff may have a big contribution to the ‘deal’, for example by making suggestions as to what could be offered, but will get no recognition and therefore no bonus. It soon becomes apparent that one incentive scheme size does not fit all.
So the next question is, do you just have an incentive or bonus scheme for those who have the opportunity to bring in the money on which they can be measured and paid, or do you develop alternative schemes for the ‘knowledge workers’, and if so, how do you measure outputs and what do you allocate as a payment? A percentage of a deal is transparent and straightforward, but what is an appropriate payment for increasing performance in an area that is apparently un-measurable? One answer is to avoid incentives altogether in these circumstances, make it clear that a flat basic is the remuneration for the job carried out, and find other non-financial ways to motivate and drive employees, all of which should take place in addition to an incentive scheme anyway.
An obvious issue arising from bonus/incentive schemes is the damage they can do to teamwork, with individualised schemes sometimes leading to underhand and unhelpful behaviour from staff who are looking to increase their wages, and will do so at the expense of other staff and often the customer. There may be arguments over who is due to be paid for a certain ‘deal’ when more than one person has been involved in making it happen, and this is something that just has to be handled case by case as it arises. Many companies allocate team bonuses to avoid these problems and encourage a stronger team ethic, but of course this will bring different issues when one member of staff perceives that another hasn’t pulled their weight in contributing to the team bonus.
These issues will never be eradicated completely, but with careful management problems can often be kept to a minimum. The main thing, as usual, is effective communication on a regular basis. This might seem very time consuming and often frustrating but it must be remembered that money is a very emotive subject and the last thing any manager wants is staff under-performing because of the way they feel about fairness within the team, especially when it might be something that can be sorted out very easily and quickly with a simple conversation. If a member of staff doesn’t think the scheme is fair, ask for an explanation why and a suggestion for how it could be made more equitable. Also, when introducing a scheme, make it clear that the way it works is not set in stone and can be changed if either employees or management don’t think it is fulfilling the purpose intended. Having struggled through quite a few really frustrating issues recently, I personally would advise any company to think really carefully before introducing an incentive scheme – is there not another way that you can increase productivity and performance without making it money-related?
I would love to hear from anyone who works with an incentive or performance related bonus scheme, especially if you have experienced any of the above problems (or any others) and managed to overcome them.