How employee benefits programmes improve engagement in retail teams
In today’s war for attracting top talent in retail, a paycheck is no longer enough. Workers are looking for workplaces that acknowledge their efforts, care for their health and pave the way for growth. Providing well-thought-through retail employee benefits programmes isn’t just good for workers; it’s good for business.
Supported teams are more productive, provide better customer experiences and assist in mitigating associate turnover, a major problem in retail. With thoughtful consideration of the benefits that best suit their employees, retailers can foster and nurture an engagement culture in which employees truly want to do more.
This blog post examines the anatomy of retail employee benefits programmes, the quantifiable and qualitative benefits to employee engagement and provides advice on selecting benefits that will deliver real value to your staff and company.
Salary vs. benefits: understanding the basics
By law, UK employees have certain rights, like paid time off, pension contributions and National Insurance; this sets a minimum level that you can expect in your contract of employment. A core part of the basic salary package is the National Minimum Wage and National Living Wage.
Subscribe to TRBThese are the minimum hourly rates that employers must pay their staff. These rates are determined by age and apprentice status and are updated annually on April 1st. Employers must ensure their basic pay meets at least these minimum legal requirements.
But, in addition to these legal minimums, employers will frequently top up the standard pay package with other benefits that can make a significant difference to the physical and mental health of their staff.
Such benefits usually form part of a retail employee benefits programme, one that is designed to meet the needs of today’s multifaceted workforce. It’s all about having a meaningful benefit to offer employees that truly makes a difference in their job satisfaction and levels of employee engagement.
What are employee benefit programmes?
Employee benefit programmes are the fringe benefits and incentives that employees receive in addition to their salary. These are designed to enhance the broader compensation experience to ensure that employees feel supported and rewarded beyond financial pay.
These employee benefits plans are the arrangements an employer makes to provide employees with compensation and benefits. A good plan does so in a cost-effective manner, offering employees perks that are worth their while and keeping business costs in check.
Commercially, employers support such schemes as employee benefits, paying into the scheme and covering overheads. Many benefits are structured to be tax efficient for employee and employer alike. For instance, salary sacrifice initiatives enable staff to trade some of their salary for perks such as childcare or pension contributions, which means that tax and National Insurance are not payable on that sum of money.
Retail vouchers are also usually exempt from tax, which makes them even more attractive to employees financially. Structured benefits show staff that the employer cares about their well-being, which leads to increased employee satisfaction, loyalty and productivity. This is especially critical in retail, where turnover and burnout are rampant.
How do retail employee benefits programmes work?
Most retailers partner with third-party companies to create digital benefit stores that combine multiple benefits into one easy-to-use application. The internal platform enables staff members to discover and obtain benefits, including:
- retail discounts
- health insurance or support
- financial advice
- wellness programmes.
With the integration of AI into HR software, retail HR teams can build personalised employee benefit packages for their employees. These packages can then be adjusted to meet the needs of the company at any given time.
One of the biggest mistakes retailers can make when deciding on a benefit programme is to offer generic or less readily accessible rewards. This could mean that the company doesn’t really see the value of its investment. Bad benefits management is bad for business. When benefits programmes don’t work to keep employees interested, it can lead to frustration, disengagement, and higher turnover, which can hurt the company’s image and cost more to hire new people in the future.
To prevent this, retailers must include employees’ feedback in benefits design. This means choosing vendors that offer a seamless user experience, investing heavily in support, and using data to power their offering through smarter benefits choices over time, highlighting the importance of the role of retail HR teams in aligning benefits with employee needs.
Types and Examples of Employee Benefit Schemes in Retail
Retail employee benefits programmes often include:
- Discount store schemes: This is one of the most popular and tangible benefits for workers in retail. For example, one of the biggest supermarkets, Tesco, will offer its employees around 10% off, sometimes more, depending on when they apply the discount throughout the calendar year. People can get these discounts quickly, which eases their financial burden and makes daily life more affordable for them.
- Health and wellbeing initiatives: These initiatives can include private medical insurance, mental health support, gym memberships, and wellbeing programmes to help people cope with stress and physical health issues.
- Employee assistance programmes (EAPs): A confidential service to help your staff with personal problems such as financial difficulty, legal advice or mental health conditions.
- Cycle-to-work schemes: These are tax-smart benefits promoting health and well-being in and outside of the workplace, supported by government initiatives.
- Flexible working options: This includes the ability for remote work or varied work hours. It is especially beneficial when it comes to retail head office or support roles because these roles often involve tasks that do not require constant physical presence on the shop floor or in stores. Flexible working options have a huge impact on work-life balance and are proven to increase happiness.
- Salary sacrifice schemes: A salary sacrifice scheme is an agreement between an employee and their employer where the employee gives up a portion of their gross salary in exchange for a non-cash benefit. Since the deduction is made before taxes and National Insurance contributions are calculated, it reduces the employee’s taxable income. This results in tax savings for the employee and National Insurance savings for both the employee and the employer.
- Gym memberships. Offering a gym membership is a popular way for retailers to invest in their employees’ health and well-being. A retail company might partner with a national gym chain to offer all employees a reduced-price membership, or it could reimburse employees for a portion of their monthly gym fees. This benefit is typically considered a Benefit in Kind (BiK), which means it is a non-cash benefit that must be reported to tax authorities and is subject to income tax and National Insurance.
Perks that pay off: Why employee benefits schemes matter in retail
The importance of engagement to business success cannot be overemphasised in retail. Benefits that mitigate financial anxiety, promote health, and acknowledge the contributions lead to happier employees. In turn, happy employees provide better customer service, stay with the company longer, and respond better to motivation strategies. These are quantifiable perks for HR because they boost staff engagement and help employees feel like what they do is noticed and appreciated, which motivates them.
Research indicates that happy employees do better on the shop floor and beyond, boosting sales and brand loyalty. It is a compelling argument for investing in employee benefits, not as a marginal add-on but as an integral business strategy.
Employee benefits programmes: real-world examples in retail
Taken together, these benefits serve various employee needs, from financial to physical and emotional, and can contribute to a stronger, more engaged and motivated team. Companies are increasingly using innovative benefits to create a more engaged and motivated workforce.
- Poundland. For instance, Poundland offers development opportunities alongside staff rewards for a far more enlightened and engaged approach to learning and careers.
- H&T Pawnbrokers: As a gesture of appreciation, H&T Pawnbrokers introduced special Christmas benefits in 2020, offering staff three paid holiday days, vouchers, personalised messages from leadership, and a festive bonus. This is a clear demonstration of how seasonal initiatives can boost morale and strengthen employee engagement.
- Superdrug and Savers. In April 2023, Superdrug and Savers also revealed a comprehensive wellbeing package, which included a financial wellbeing app with shift-based earnings tracking and flexible pay. It also offers digital GP, mental health, and nutrition support via Aviva’s Digicare app, as well as enhanced discounts on select items, vaccine clinics, mobile SIM plans, and other benefits. This illustrates an employee wellbeing programme that can be both strategic and comprehensive in scope.
How should retailers choose an employee benefits provider?
Selecting the right benefits provider is key. Retail HR should:
- Prioritise a retail-specific, user-friendly platform. Find a provider that has an easy-to-use platform with a wide, relevant set of benefits designed with retail workers in mind.
- Focus on communication, flexibility, and analytics. Providers also need to enable clear communication to drive visibility and adoption of the benefits by employees and provide analytics-based insights that allow businesses to evolve their solutions.
- Customer support: How will you and your employees get support? A good provider should offer responsive and knowledgeable customer service, ideally with a dedicated account manager.
- Flexibility and customisation: Does the provider offer a wide range of benefits that can be customised to meet diverse employee needs? Can employees choose benefits that are most valuable to them?
Not making the right decision can lead to low benefit engagement and wasted resources. All too frequently, programmes are devised without input from employees or are rigid and unable to accommodate the changing and unique needs of an individual, leading to disillusionment and, in some cases, suspicion of employer motives.
Final thoughts
Employee benefits schemes are essential for driving engagement, attracting and retaining top talent in an industry where people matter more than most. Supporting employees’ mental health and wellbeing is increasingly viewed by candidates as crucial beyond salary considerations.
However, employers sometimes use excellent benefits packages as a way to cover up for low wages. Benefits do add value, but they should not be used to substitute for paying fair and competitive wages that help meet most employees’ basic needs. For retailers, finding the optimum compensation and benefits mix that sends signals about pay, security, and clarity to their staff is critical.
For more insights on how to drive employee engagement and retention, join our free-to-attend event, Retail HR Summit.
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