By Mike Preston
Employee benefits are set to be among the biggest challenges for SMEs in 2018. With flexible working policies and varied annual leave allowances now fairly standard among small businesses and start-ups, the ability to offer staff something different is becoming increasingly difficult as SMEs look to stay competitive.
One benefit yet to dominate the small business world is group life insurance. Research shows that only 4%* of SMEs currently offer their staff this type of cover, with most remaining largely in the dark about what it is, the associated costs and how it could improve employee engagement and retention.
There does appear to be some false perceptions around group life cover. Some may believe it to be too expensive, too complicated or only suitable for larger firms. In reality it can be an affordable, flexible addition to salary packages and a great way to look after staff – regardless of company size.
For the 96% of SMEs who might not be in the know about group life cover or ‘death in service’ as it’s often called, it’s often an affordable way for businesses to provide a level of support for staff and their family members that if the worst were to happen, gives them some financial support and security. For Employers, this benefit can result in improved attraction of talent and increased company loyalty in staff retention.
In a nutshell, group life insurance is an insurance policy taken out by an employer, giving employees peace of mind in case the worst should happen. It provides a lump sum – a multiple of salary or fixed amount – to the loved ones of an employee if they die whilst employed by the business.
This type of insurance is often significantly cheaper than individual cover purchased by employees separately and can be used as an attractive benefit by businesses to recruit and retain staff.
A typical quote for a manufacturing company based in the North East could be as little as £7.00 per month per employee to provide a benefit of £50,000**
For an SME, providing ‘death in service’ cover for staff could be the ideal first step towards introducing a wide range of insurance benefits as the business grows and matures. In comparison with a lot of staff perks, group life insurance can be inexpensive and allow small and medium businesses to logically add to the workplace pension they have already established.
Having gained valuable experience from the group life process, businesses can then seek to add slightly more complicated and sometimes more expensive additional benefits.
It could be argued that group life has been difficult to obtain for smaller businesses with a reducing number of advisers serving them in this area, resulting in lack of awareness and therefore engagement. For employers wishing to arrange group life cover directly, obtaining quotes from a wide selection of providers has often been regarded as time consuming and confusing. To add to this, many smaller businesses may not have a dedicated HR department leading to responsibility falling onto the accountancy department or office manager and inevitably getting pushed to the bottom of the to-do list.
This is where a comparison service such as Protect My People can help provide an accurate, quick and cost-effective solution, allowing businesses to view multiple quotes without the pain of completing multiple individual insurer questionnaires and processes.
Mike Preston is Business Development Director at ProtectMyPeople
**Based on company size of 20 employees, an average age profile of 42 and a 50:50 split of male to female doing administrative type of roles. Ts&Cs apply.