What benefits should you be providing to home workers?

With the death of office-based perks such as free food and gym passes, People Management asks what should replace these, including new expense policies  

Office perks such as free food or a gym membership are often seen by employees as a major benefit – and sometimes even the major attraction – of joining an organisation. A free hot meal, fresh fruit and Friday drinks are welcome bonuses that some staff came to expect pre-Covid.

But such workplace perks are of course difficult to deliver for many businesses during a pandemic, and could disappear altogether where firms roll out long-term home working or even decide they don’t need an office space at all. Last week Deloitte, for example, announced the closure of four of its UK sites in favour of remote working. 

There’s evidence employers are giving the matter careful thought, however. A recent survey of 144 employers by Howden found almost three in four (72 per cent) were planning to review their employee benefits provision as a direct result of the pandemic, and more than a third (38 per cent) felt they were now ‘much more important’ than pre-Covid. 

So People Management asked experts if benefits should be rethought, and if so what now-obsolete offerings should be replaced with, including the pros and cons of more generous expense policies to support staff working from home...

Should employers reconsider replacing their current offering? 

The question of whether workplace benefits are in need of a serious rethink is a longstanding one, says HR coach and consultant Gemma Bullivant, who believes long before the outbreak many businesses were “wasting money” on benefits that were neither used nor valued by employees. “It has never been more relevant or important to establish a curated employee-led approach to benefits – a way to enable flexibility and choice to employees to ensure what is on offer is of personal value,” she says.

While it is too early to see specific trends in new benefits being offered, Debi O'Donovan, director at the Reward & Employee Benefits Association, says questions from employers are already pouring in. “It is very much top of mind as benefits budgets come up for review,” she says. “Anything from gym membership, travel loans and travel discounts through to business travel insurances, company cars and office-based perks are coming under scrutiny.”

But, says Claire Cross, HR director at Gattaca, these uncertain times mean many businesses are for now “holding off” on making fixed decisions about their benefits offering.

What are the dangers of leaving benefits unchanged and not rethinking those that can only be delivered in the office? 

Many benefits packages come with a degree of geographical weighting, which means they are located near to the office rather than the employee’s home, says Steve Herbert, head of benefits strategy at Howden Employee Benefits and Wellbeing. This, he explains, could discriminate against those who feel unable to come into the office where this workplace is still open – and long term would discriminate against those working predominantly from home. “By definition many workers in the post-pandemic world will be unable to take advantage of such offerings, and this may lead to accusations of unfair treatment, which can lead to lower engagement levels and, by extension, lower productivity too,” he warns.

As recruitment starts to pick up again, businesses can’t afford to lose talent to competitors as a result of not maintaining attractive offerings, Herbert adds. “Getting the mix of benefits right to ensure that all workers – wherever they are based – see the full value of the benefits package will be a key consideration,” he says.

What should replace existing perks?

As such, O’Donovan expects to see more spending on benefits that can be accessed closer to employees’ homes, and which help employees with their physical and mental wellbeing – for example, access to local gyms or memberships to private clubs. “[I also expect to see] a bigger emphasis on perks that will motivate teams and individuals during the darker winter months, such as posting out team treats and rewards or games that allow groups to bond and be more creative together,” she says.

Investing in an employee assistance programme if a company doesn’t have one already is “a really sensible idea”, says Sally Ward, reward manager at hr inspire. She suggests companies check their existing life insurance, group life assurance and private medical schemes before sourcing new benefits. “Many providers are adding valuable add-ons such as virtual GPs, mental health support, online health checks, nutritionist consultations and tailored fitness programmes, all at no extra cost,” she says.

Benefits and perks that can be obtained digitally and used anywhere will be “vital”, adds Herbert, while offering cash alternatives via a flexible benefits platform will “simplify the administrative headache” by making sure the correct communication and tax treatment is issued to every worker regardless of what combination of benefits they select.

Some existing benefits, including reward-based health insurance and online shopping discounts, already – even before the outbreak – provided extras for people not physically based in an office, says Lianne Baker, head of HR at Gascoyne Estates. “I am hoping to see providers start giving more of a variety of perks that can be purchased online such as fruit bowls, healthy drinks, meals and free yoga classes,” she says, adding that there should always be an element of choice for employees.

But, warns Bullivant, the future is still not clear enough at the moment for organisations to be making “wholesale sweeping changes” to benefits. “Most companies have ongoing commitments to existing arrangements that can't be changed overnight,” she says. Nonetheless, some employers will be able to renegotiate with their providers to make allowances for the current situation, Bullivant says, adding that mental health and wellbeing should be the “primary focus”.

What should employees who are working from home be allowed to expense? 

As many employees working from home are missing out on the benefits of coming into the office – such as free meals or even a suitable home office set up – employers might want to consider expanding their current expenses policy, says Cross. She suggests one option is to create a system where employees have a budget with a supplier to spend on items of their choosing that are delivered to their home address. “Some employers, Gattaca included, already have wellbeing spend pots that employees can use to claim back anything that contributes to their physical, mental or financial wellbeing. This could be a pair of trainers or even a massage,” she says.

Most employers already have policies for claiming expenses related to working from home, says O’Donovan – with arrangements varying from not allowing any claims to offering employees pots of money to draw from. “I’ve seen amounts from £30 to £60 mentioned,” she says. O’Donovan adds that many companies have allowed staff to retrieve screens, keyboards and other ergonomic equipment from their offices, while others have allowed staff to claim for “reasonably priced desks or to upgrade broadband if needed for work”.

Baker adds that a simple solution like a perks pot of money for employees could be more attractive than expensing individual items. “It would become very complicated if everyone started expensing things they were used to receiving in the office,” he says.

Employers can also offer a £6-a-week working from home allowance as part of an HMRC-approved scheme that allows employees to receive the extra money tax free. However, Herbert suggests employers should consider going above and beyond this if they are able to offer a more generous allowance. “It’s not unusual to see higher amounts paid, similar to a car allowance, which are taxable but generally kept outside of pay rise calculations and pensionable pay,” he says.

If an employer can’t afford to provide even the £6 allowance, employees can claim an equivalent tax break of £6 directly from HMRC, which employers should consider communicating details of to staff.