Work perks – Pile on the freebies


An interesting view on `affording’ modern working life:

CIPDFrom share schemes to stately homes, there are ways to beat the cost of living crisis. Get inspired by particularly innovative HR departments 

Everyone knows pay is failing to keep pace with the cost of living: the Bank of England says real wages are falling at their fastest rate since the 1920s, with the result that by some calculations the average pay rise is only half the rate of inflation. The CIPD has estimated that today’s minimum wage is worth 30p less in real terms than seven years ago.

Little wonder many HR departments find themselves at the sharp end when employees struggle to make ends meet. But beyond the obvious solution of pay rises all round, there are a number of thrifty offers HR can make to staff which succeed in putting pounds back into their pockets without busting budgets. People Management takes a tour of proven benefits tactics that have delivered for organisations of all sizes.

Spend a little, save a little more

According to Alistair Denton, managing director of employee benefits provider Edenred, voluntary benefits – bought by staff but designed to ultimately save them more than they paid out – are the new buzz in reward. “If childcare and group risk products, like private medical insurance or income protection, are products staff would buy anyway, then employers negotiating them at discounted rates at no cost to them is a no-brainer,” he says. Discount cards are a case in point: designed to offer employees money off at high street stores, Boston Consulting Group estimates their popularity has grown at 20 per cent per year over the last five years, with the average staff member saving around £1,000 a year. Energy giant E.ON says the 12,000 employees enrolled in its ‘MyChoice Everyday’ scheme collectively enjoyed £400,000 back in their pockets last year.

By offering a salary sacrifice scheme as a way to ‘buy’ benefits, staff technically take a pay cut, but research by Lorica Employee Benefits finds that those who choose two or three such benefits (from a list of cars, mobile phones, childcare vouchers, computers and even pension contributions) can effectively boost their base 
pay by 3-5 per cent due to reduced tax and NI contributions.

Employee share schemes (which most typically involve selling shares at reduced prices) have enabled some staff to enjoy spectacular windfalls. BT employees who invested the maximum £250 per month into its five-year sharesave scheme would have netted a profit of £68,500 by summer 2014. Last year, William Hill staff (who can already buy shares at a 20 per cent discount), saw its share price grow to the point where anyone saving the maximum £250 per month could have pocketed £20,000 on top of their £9,000 investment.

Super subsidies

The idea of subsidising common items is generally restricted to a number of relatively obvious areas: canteens, for example, are a mainstay for most large organisations, and gym membership (or even a subsidised in-house gym) ticks the well-being box, too. Last year, 164,000 employees bought a bike through the Cycle To Work scheme, up 16.4 per cent on 2012 and testament to the power of ‘nudge’ thinking and a straightforward proposition.

Generally speaking, if you produce something of value, offering it to staff at a subsidy adds to the feel-good factor: it’s why JD Wetherspoon lets its employees chow down for half price, and Harrods offers a similarly sized discount on work wear. But it also pays to be creative. John Lewis owns four properties – including a 16th century castle on Poole Harbour and a watersports club in north Wales – that employees can hire for a hefty saving. KPMG has announced plans to offer subsidised mortgage rates via a partnership with Yorkshire and Clydesdale Banks, recognising the fact that two thirds of its employees live in the rapidly overheating London market.

Think freebie

If you want something for nothing, the tech sector is the place to be. Googlers, for example, live a gold-plated life with free yoga, rental cars, massages, meals and even complimentary car washes, although as executive chairman Eric Schmidt noted in his recent book How Google Works, they are expected to forgo their work-life balance into the bargain. For the same reason, concierge services are now popular among London legal and professional services firms: picking up dry cleaning and running errands for employees means they can devote their time to revenue-generating activities.

Freebies can be lower key, however. O2’s shuttle bus to Slough station has proved so popular it is used by 19 per cent of the workforce. Holiday firm Center Parcs gives away a Christmas hamper every festive season. But it’s IKEA which has really mastered the art: in 1999, it shared a day’s profits with its employees, while in 2006 it offered all 9,000 staff a free bike. Other generous handouts have included mobiles pre-loaded with £5 of credit and a BlackBerry Playbook. In 2013, it settled on a £100m contribution to the pension scheme, worth around £500 to the average staff member.

Hard cash

End-of-year bonuses and profit-related pay are the obvious ways to give something back. But if that all sounds a little vulgar, there are interest-free loans for season tickets or payments for referring friends for vacancies (at pensions business Phoenix Group, up to £3,000 is available if a staff referral successfully passes their probation period). An increasing number of organisations, including Leeds University and William Hill, have created hardship funds for employees experiencing temporary cash flow problems.

The right incentives can alter employee behaviour. Pensions provider Friends Life wants more of its staff to work from home, so it gives homeworkers £216 a year to support bills. Technology firm UKFast values loyalty highly, and pays a bonus of £1,000 for five years’ service, rising to a tax-free £10,000 for a decade. In the past nine years, the idea has cost more than £110,000.

Founder Lawrence Jones says: “I’ve no doubt some business owners and accountants will think I’m crazy, but paying significant amounts that allow people to make life-changing decisions is one of the most sensible decisions we’ve made here. The costs of having to recruit and retrain new people would be a lot more. Having individuals who understand the business and who can also guide new recruits is priceless.”

Serviced apartments business SilverDoor pays employees a ‘punctuality bonus’ for turning up on time. “Many will appreciate just how much time can be wasted each week if staff habitually arrive 20 minutes late and then have a coffee before settling down,” says director Chris Gee. To avoid what he calls “arrival creep”, the company offers £150 per month for maintaining a 100 per cent blemish-free lateness record.

“We don’t penalise people for being late when they’re ill or suffer things genuinely outside their control,” says Gee. “But we do expect staff to be in on time for everything else. It’s a substantial extra amount they can earn, and it’s really valued. Lateness is now virtually eliminated.” Whether you agree with the idea or not, it’s further proof that money still talks when it comes to motivating staff.

Read the CIPD Reward Management survey at

How to get free stuff for your staff

The web is awash with free offers – a conservative trawl online reveals you can secure Olay Total Effects day cream, Gucci perfume, Felix cat food, Head & Shoulders shampoo, gym passes, bottles of Coke, hotel discounts, hair straighteners and taxi rides within a mouse click.

If you’re interested in bulk freebies for staff, however, one of the most interesting new additions to the genre is The Work Perk (, where HR departments with a minimum of 200 employees can receive offers from companies prepared to send you crateloads of everything from cosmetics to chewing gum.

Peter Crush, People Management magazine, 24 October 2014

Leave A Reply

Your email address will not be published. Required fields are marked *