How much would you say benefits and perks influence the role you choose next?

While culture, career progression and good leadership all contribute to employee satisfaction and encourage loyalty, salary, benefits and perks still need to be competitive to attract top talent. More than a third of employees say perks and benefits are among their top considerations before accepting a new job.

We wouldn’t recommend a candidate whose sole motivation is money, but remuneration is naturally a significant part of any career decision. Loyalty and performance should be recognised and reflected in reward.

A strong benefits package can often be more attractive than base salary alone. It can improve employee engagement, provide greater financial security and encourage long-term commitment. In turn, this reduces the risk of competitors attracting your leadership team with higher salaries.

So, what are good employers offering to attract and retain senior talent?

1. An Uplift in Salary

Annual pay rises are the most basic form of recognition and play an important role in retaining employees and keeping them motivated.

To attract someone in the first place, however, the offer has to be compelling. From our experience, it takes an average increase in total remuneration of around 17% for a Director to move roles.

2. Bonuses

It is rare for us to work on a search where an annual bonus is not part of the package. Whether it is based on a balanced scorecard or awarded on a discretionary basis, most companies have some form of bonus scheme in place.

Bonuses help retain high performers and are a key part of a competitive package. You may be able to match a candidate's base salary, but if they currently receive a 30% bonus and your role offers 10%, the difference will usually need to be reflected elsewhere in the package.

3. Long Term Incentive Plans

Typically reserved for more senior employees, Long-Term Incentive Plans (LTIPs) reward Executives and Directors who achieve agreed business or performance targets over a number of years. The reward is usually additional bonus payments or shares in the company.

In recent years, some MPs have argued that LTIPs should be scrapped because they can overcomplicate executive pay. While some organisations have faced criticism for their schemes, particularly water companies, well-designed LTIPs generally encourage leaders to focus on the long-term success of the business.

4. Flexible Car Schemes

Most senior directors receive either a company car or a car allowance. Giving candidates the option to choose between the two can be a valuable benefit.

For example, a Director who commutes into London by train five days a week may gain little value from a company car, whereas a cash allowance could help cover travel costs instead.

Everyone's circumstances are different, so simply offering the choice is often appreciated.

5. Flexible Benefits

As with car schemes, employees value different benefits. Flexible benefits have become increasingly common in the UK, whereas they were much less widespread ten years ago.

Employees are typically given a benefits allowance, perhaps £6,000, which they can use to select the benefits most valuable to them or, in some cases, take as cash. Personalising benefits allows employers to cater for different priorities. Some employees place greater value on pension contributions, while others prefer additional annual leave.

Options can include increased pension contributions, extra holiday, private healthcare, childcare vouchers and gym memberships.

6. Pensions

Final salary pension schemes remain more common in the transport sector than in many other industries, largely because a number of organisations were previously publicly owned. At some companies, these schemes continue to contribute to low staff turnover among long-serving employees.

Although final salary pensions have largely disappeared over the past decade, they are still difficult to compete with. If you are trying to recruit someone away from a final salary scheme and can only offer a defined contribution pension, you should expect to make up the difference elsewhere. In our experience, that often means offering an additional 10-12% in salary.

If you're reviewing your executive reward package or would like to understand what today's market expects, we'd be happy to help.

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Get in touch at enquiries@newsomconsulting.co.uk.