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Using employee benefits to help low earners

Businesses should improve their employee benefit schemes to support lower earners, according to a report by the Work Foundation.

With levels of in-work poverty reaching record highs, the Work Foundation has been working in partnership with the Joseph Rowntree Foundation and businesses in the retail and social care sectors to explore how to maximise the value of employee benefits.

Their report, Improving fringe benefit schemes for low earners, says that although increasing wages will always be central to tackling in-work poverty, employee benefits can offer significant value for low earners struggling to stay afloat, particularly those in low-income households, and businesses looking to demonstrate leadership in alleviating in-work poverty.

An assessment of the market identified more than 50 different types of employee benefits, ranging from those that offer increased job security, flexibility or discounts on household essentials, to those that could be considered lifestyle perks, such as sporting or recreational facilities.

In particular, low earners value benefits that mitigate their highest living costs such as food and leisure, travel, childcare, housing and utilities, as well as those that provide financial education and support.

For example, employers are offering an increased range of schemes to help mitigate travel to work costs, including transport season ticket loans, travel expenses, company car/van, Cycle to Work/bike loans, and work bus/public transport subsidies.

The cost of childcare can account for a substantial share of outgoings in households with children. Employers can offer a range of benefits that can help to mitigate these costs, such as flexible working, paid time-off for caring responsibilities, or subsidised childcare.

To help with the cost of housing and utilities, employers can offer rental deposit loans, accommodation and rent subsidies, energy switching schemes, and technology and telecommunications loans or subsidies.

Meanwhile, free or subsidised meals and drinks, staff discounts, and shopping and lifestyle vouchers can help employees reduce the cost of food and leisure.

Employers can also help low earners better manage their money by providing access to low cost, low risk financial products and offering crisis loans that workers can repay monthly through their salaries.

Heather Carey, deputy director of the Work Foundation, said: "Employee benefits can be extremely valuable -- particularly schemes that help to mitigate living costs. But despite rapid expansion of the employee benefits market, our research finds that many employers are failing to maximise their value for low earners which is bad for employees, and bad for business.

"It's so important that employers recognise the business benefits these can bring -- the firms embracing fringe benefits are reaping the rewards of better employee engagement, productivity and performance -- as well as having happier staff."

Posted on November 26th 2018

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