POSTED: December 14 2022
Small and Medium Business Employee Benefits
Small and Medium Business Employee Benefits: How 2023 will bring a next generational shift in employee benefits and wellbeing for SMEs

Small and Medium Business Employee Benefits

When discussing the SMEs of today, it’s unavoidable to mention the Covid-19 pandemic, the beginnings of which marked a seismic shift in how the majority of businesses functioned and operated. Organisations were forced to adapt if they were to survive and this meant the widespread overhauling of various attitudes and practices.

Many businesses initially believed that these consequent effects would fall out of significance as we emerged from a life of lockdowns and social distancing. However, it is increasingly becoming apparent that, not only are these changes here to stay, they are still evolving.

One challenge in particular for businesses is talent attraction & retention. That is, workers have reassessed their priorities and are now demanding more when it comes to their employment terms; they rightly do not want to sacrifice any aspect of their wellbeing for the sake of career advancements. The Great Resignation is still an ongoing economic trend which poses a significant risk for SMEs everywhere. Accordingly, further adaptation is going to be required of businesses as we move into 2023, and the two important areas concerned here are employee benefits and wellbeing. Namely, employers need to ensure that their organisation’s programmes are compatible with both the present, as well as the future in order to negate the mounting pressures. Throughout this article we’ll be outlining the salient details of this generational shift that’s on the horizon so that SMEs can pre-empt transformation, and so stay ahead of current developments.

Flexible Working

Flexible shift patterns for employees within businesses arose out of necessity during the pandemic. This dynamic signified the only solution for SMEs to remain operational because on-site working was an impossibility, evidently a result of the extensive restrictions in place. As these restrictions gradually eased up we then saw the introduction of hybrid working, where employees would alternate between going into the office and working from home.

Despite there being an anticipation for life in general to return to how things were prior to the pandemic, this wasn’t necessarily the case for flexible working. Its success evinced it to be an inadvertent upshot that was preferable for a lot of employees. So much so, that it has become a mainstay in many industries, and led to the prevalence of jobs which are entirely remote-based.

The discussion as to whether, where applicable, flexible working should be a set standard for SMEs is experiencing an exponential amount of traction. Foremostly, this is manifesting itself as trials which measure, and weigh up, the pros and cons of the 4 day working week. I.e., testing the efficacy of such a system against the usual five-day workweek. Folloinwgly, the latter is now commonly considered to be relatively outdated due to how the former has produced results which show a direct increase in a more positive work-life balance, talent recruitment & retention, productivity levels, and employee engagement, all while reducing overhead costs and a business’ environmental impact. Fundamentally, these are all factors which contribute to employee wellbeing alongside the longevity of SMEs collectively. It’s for this reason that, contrary to initial impressions, flexible working is likely to see an expansive implementation throughout 2023, necessitating all businesses to make the necessary prospective deliberations on the matter.

Mental Health Support

Even before the pandemic there was a steadily growing awareness regarding the vital importance of individuals’ mental health in society’s consciousness. Although, this coincidence was largely responsible for its being brought to the fore, in no small part owing to the permeating feeling of isolation which circulated on a global scale. The advantages of caring for one’s mental health make it so that, rather than its relevance dying down, it will only continue to grow well into 2023 and beyond.

What this means for SMEs who hope to recruit and retain top talent is that there is quite an unspoken requirement of a business these days. Namely, that it internally ensures the emotional wellbeing of its employees by making an active effort to incorporate mental health support within its operations. Thankfully, there are various wellbeing tools which help to achieve this. For instance, business owners can implement an Employee Assistance Programme (EAP) which provides either face-to-face or online support for any work-related and personal issues they may be dealing with. This can also be extended to stress management and mindfulness classes which typify a similar emotional outlet for workers. And on the other hand, by simply encouraging healthy communication in the workplace, this illustrates that your organisation is geared towards removing the stigma which persists around talk of mental health in working environments.

Add to this, that flexible working inherently affords such support by how it reduces stress and burnout, two elements of employment which are obvious concerns for SMEs, given that they each lead to absenteeism. All of these attributes are what potential employees take into account when applying for roles. Likewise, It’s worth noting that their gravity is instrumental if your business cannot sustain competitive salaries too, since the modern climate values mental wellbeing over monetary worth.

Private Medical Insurance

As support should be provided for employees’ mental health, it would be remiss to neglect the quality of their physical wellbeing also, especially as the two often influence each other. To mention another effect that the pandemic had, it is that it caused an unprecedented amount of strain on the NHS. The outcome of which was an overcrowding of hospitals & consequent burdensome waiting times.

Again, as opposed to the situation eventually getting better, it only seems like the crisis is getting worse with many people still having to wait hours to get essential medical assistance. The severity of the circumstances means that Private Medical Insurance, or Health Insurance, as part of an employee benefits package now looks incredibly attractive to potential candidates. The popularity of employer-funded healthcare has risen because it guarantees that SMEs can supply their staff with the help they need, when they need it. It is, therefore, a highly-valued asset for businesses who wish to attract and retain talent in 2023.

Moreover, it’s not as costly as one would assume, the benefits immediately outweigh the upfront expenditure and the emergence of virtual GP visits makes certain processes more efficient than ever. In a similar vein, the discussion of employees’ physical wellbeing always brings into question what other methods there are to combat the disadvantages that have been imposed by modern-day sedentary working environments. For example, if a job has an employee sitting at a computer desk for hours, it is well worth offering something like a Cycle-to-work scheme which balances out such an unhealthy dynamic.

Income Protection

Having said that today’s climate places more value on mental health than money, meaning that financial gains should not come at the cost of one’s emotional wellbeing, this does not go to say that the role of income should be underplayed. Instead, it would be categorically wrong to disregard the tangible connection that there is between emotional wellbeing and financial wellbeing. After all, it is a core aspect of employment and businesses are beholden to their employees when it comes to giving them what they deserve for their service.

Pertinently, as we edge towards 2023, this topic has gained a substantial amount of relevance. Interest rates are sharply rising and there is a formidable cost-of-living crisis sweeping throughout the UK. Not to mention, a recession looms over the country as a whole. Justifiably, the majority of people are worried about the stability of their finances, with some now being unable to successfully make mortgage repayments and meet their energy bills. It’s for this reason that Income Protection is a key factor in attracting & holding on to talent, and will certainly remain so in the new year. Namely, because it bestows a vital sense of financial security, thereby leading both current and prospective employees of SMEs to respond by recognising its prodigious worth for them.

Childcare Benefits

If any SME is to prosper then it must come to the plain realisation that parents are willing to put a halt on their career if their child is lacking in care. Further still, if a business does not offer a generous childcare benefits plan, then they are highly likely to look elsewhere for one that does. The aforementioned cost-of-living crisis has left a great deal of parents unable to afford proper childcare, resulting in its provision becoming a highlighted contributor to employee attraction, retention, and wellbeing. What’s more, childcare benefits are clearly shown to decrease absenteeism which is specifically down to parents having to give up shifts in order to look after their children.

The possibilities that are intrinsic within modern solutions to work, such as parents being allowed to plan their day around their children first while still being able to carry out their typical duties are a win-win for SMEs. Workplace morale will see a consequent boost, and so too will productivity because stress and worry will be eliminated.

As a business owner, you might assume that childcare benefits have always been at the top of the hierarchy. And, although this is partly true, it’s evident that this singular importance will be amplified in 2023 and the following years. Reason being, that the early part of Generation Z (those born in 1997 and onwards) are now beginning to firmly establish themselves within employment. On top of this, an outstanding number of this generation are now responsible for children and, as they are new to parenting, will naturally find it difficult to figure out how to equally dispense time between work and parenthood. Hence, it is now the time for SMEs to correspondingly cater for the new generation which is being ushered into employment relatively shortly after education.

People-first Culture

The arrival of the shift in focus towards employee mental wellbeing heralded employers leaping to found a people-first culture within their business. That is, a working environment free of toxicity and negativity. The previously mentioned Great Resignation symbolised a growing confidence in workers to prioritise how valued they felt over their employment status. Accordingly, it’s notable to bear in mind for 2023 that if one’s employees feel in any way disrespected, treated unethically, or excluded, then it is now more probable than it has ever been for staff to quit point-blank.

This is why a more humanised working environment, so to speak, is an integral necessity. When potential hirees are looking for work, a fundamental element in their considerations will be the impression they get of a workplace’s sense of community. The new generation of workers don’t just want to show up for a pay check, they want a place where they belong, one where their actions are rewarded, their skills are nurtured, and their voice is heard. If they feel like work is contributing to their own personal development, it’s clear that they will be more inspired to show up and demonstrate high levels of productivity.

A starting guideline for SMEs can be found in the term Diversity, Equity, and Inclusion (DEI). It is a model comprising a set of initiatives that represents a progressive discipline. Specifically, a discipline that fosters a workplace characterised by a workforce consisting of people with varied socioeconomic backgrounds, genders, races, and ethnicities. Further, all of whom are treated impartially, fairly, and given equal opportunity while it is ensured that they each feel like they belong and are suitably valued. As 2023 nears, a people-first culture looks more like an obligation for SMEs rather than a mere benefit, given that it embodies a necessary humanitarian step forward.

AI and Automation in Human Resources (HR)

When we think of the future, we are immediately drawn to technology because it is the presiding feature of our era. Developments are occurring at a rapid rate as well, meaning no industry is left untouched. And so, for SMEs everywhere it is desirable to take advantage of the latest tools, of which there will be an abundance in 2023 that utilise AI and automation.

To give an example, AI can be used to streamline the entire recruitment process for businesses in how it can automate candidate selection and interview scheduling. Despite the expression being terse, the details of the processes involved are time-consuming and arduous. Automating such tasks frees up a considerable amount of time, effectively working to permit employees to dedicate their time more productively. In this way, AI and automation are distinguished at increasing the operational efficiency of SMEs.

Additionally, it may at first not be apparent that AI can enhance the human side of a given organisation. However, going back to a business’ selection process for employees, having this facet be automated significantly reduces any potential discrimination resulting from prejudice because technology unambiguously removes human thought processes. And so, rather than being opposed, AI and automation do, in fact, work to benefit SMEs’ HR departments and pose a remarkable solution to achieving workplace DEI & consequent employee wellbeing for the years to come.

Going over all the above components that are contributing to the generational shift that is on its way for 2023, it isn’t hard to see how they all interact with each other in order to comprehensively improve employee wellbeing. Inevitably, SMEs are required to make these implementations if they are to stay cutting edge and so survive within today’s labour market. 

Thank you for taking the time to read this article, if you’re interested in making the changes to your business that we’ve mapped out here, then advo’s employee benefits team can assist you in doing just that! Feel free to get in touch today for more information on what we can do to help your organisation thrive in the new year. And for more related material, be sure to check out our news page which we regularly update.