Sage UK and Mercer have launched of Sage Employee Benefits, a new service designed to make it easier and more affordable for SMEs to introduce staff benefits packages.

Sage Employee Benefits offers small business owners the opportunity to provide benefits packages including medical, life insurance, income protection, pensions, travel and dental insurance. Provided via Mercer’s mercer-elect solution, the service harnesses Mercer’s strong relationships within the insured benefits market developed from its work with multi-nationals. The proposition is designed to give SMEs – looking to provide cover for up to 100 employees – access to competitive rates and leading benefits normally only available to larger organisations.

“Whilst most employers understand the significance of offering a benefits package, SMEs still have concerns regarding costs and the time required for administration. That’s why Mercer and Sage launched Sage Employee Benefits with mercer-elect. Designed with small business owners in mind from day one, it makes bespoke benefit packages simple to roll out and easy to manage at an affordable price,” explained Matthew Forrest, head of services, Small Business Division, Sage UK.

The Sage Employee Benefits solution simplifies the administration associated with running a benefits scheme by providing a secure online portal, which both employers and employees can access via their PC anytime they need information. The ‘anytime access’ helps free up entrepreneurs’ time allowing them to spend more time focusing on running their business.

Users of the service also benefit from access to Mercer’s teams of specialist advisors who provide expert guidance and insight on the latest legislation and market developments. This is all aimed at ensuring that SMEs are getting the most value from their packages.

“To think that employee benefits packages are the exclusive preserve of big business is simply wrong. When the changes brought about by the Pensions Act 2008 start to come into effect from next year, employer provision and contribution to pensions will switch from ‘nice-to–have’ to legal necessity for all organisations over the next few years,” commented Simon Griffiths, principal at Mercer. “At a time when pay rises, if they occur at all, are below the rate of inflation, employees are placing great value on the other benefits that their employers provide. We’re very pleased to be working with Sage and making the type of benefit that multinational employees enjoy as standard, available to the small business community.

 

Almost two-thirds (63 per cent) of small, family-run businesses would not survive the loss of a key member of staff due to ill health or death, according to new research by Scottish Widows.

The findings show that more needs to be done to educate small businesses about the risk of losing key staff members, said Iain McGowan, head of savings and protection at Scottish Widows.

The Scottish Widows Business Protection Report, which details research carried out with over 500 UK business decision makers, shows that the majority of businesses are still reluctant to protect themselves from the unexpected loss of a business owner or key member of staff.

By their nature smaller businesses are more exposed to certain risks and in particular the loss of a key player. Despite this, 60 per cent say they do not think they need a protection policy in place. And the research also shows that only six per cent of UK businesses have financial protection to cover the death of key person while only four per cent have protection for a key person suffering a critical illness.

“Small businesses are the lifeblood of the UK economy making up 99 per cent of the private sector. Even in these challenging economic times today’s entrepreneurs must be prepared for the financial impact that a critical illness or death of a key employee could have on their business,” said McGowan.

“Businesses need to consider the key risks they face to all aspects of their operation. This includes planning for the very real risks their business could face from death, critical illness, or long term incapacity of a key employee or business owner. While small businesses receive assistance and advice when starting up, they also need help in taking a long term financial view of their business and planning for risks accordingly.

“This responsibility for further education and understanding sits with the industry, Government and businesses themselves.”

John Walker, chairman, Federation of Small Businesses said: “The loss, even temporarily, of a key staff member or other interruption is always going to hit the smallest firms the hardest. A single member of staff could be half your workforce. It is therefore vital that small businesses get their contingency plans in place now, not when trouble strikes.”

 

New figures from the Federation of Small Businesses (FSB) show that sickness absence costs small businesses on average £1,500 per year.

Long term sickness absence does not affect the smallest of businesses frequently, but when it does it has a big impact and the costs can be high. The FSB’s ‘Voice of Small Business’ survey panel shows that on average small businesses only experience 2.4 days sickness absence per employee each year – much lower than the national average 7.7 days per employee – 25 per cent said that they experienced no sickness absence at all and 81 per cent said that they were not at all affected by long-term sickness absence.

However, in the last 12 months sickness absence cost firms on average £1,500, but for nine per cent it cost more than £5,000. So it is important that the Government does more to help with the costs of sickness absence in the smallest firms.

Currently, some small businesses can feel confused by the Percentage Threshold Scheme – the current system used to calculate how much SSP an employer can claim back. This means that many small businesses either have to spend time doing difficult calculations or they have to spend money on buying in help.

With 40 per cent of small business employers claiming that dealing with holiday entitlement and sickness absence was one of the most difficult aspects of employment law, the FSB believes that recovery needs to be simplified so micro firms can reclaim all SSP costs more easily to stop them from being hampered at such a difficult time.

The FSB is calling on the Government to introduce a small employer’s relief for all firms with an annual National Insurance Contributions bill of less than £45,000 to recover SSP. This relief would be like that used for reclaiming statutory maternity pay and would use the same calculations. As a result, it would ease the administrative burden, as well as helping businesses manage sickness absence better.

Small firms care about their staff and want to invest in their health where they can. However, Government must understand the pressures small firms are under, and that this is one pressure among many. This needs to be recognised within the soon to be published independent review into sickness absence.

It will also need to recognise that small firms are not able to cope with an increase in the burden of responsibility or an increase in regulation, but that by better supporting small businesses, they could be able to improve the way that they manage sickness absence.

The Government should look at improving the way the Fit Note is used by making it electronic and increasing the training that GPs are given on how to use it.

Small businesses also need better access to free occupational health advice either through GPs or via the national occupational health phone line to make this issue easier to manage.

John Walker, national chairman, Federation of Small Businesses, said:

“Small firms act like a tight knit family and value the contribution their staff bring to the business. And research shows that staff in smaller firms are more often committed and loyal. But sickness absence is one of the most complex pieces of employment law they have to deal with. It can also be costly with small businesses paying around £1,500 over the past 12months. The Government must provide a small employers relief for statutory sick pay in the same way they do for statutory maternity pay so those small businesses that experience a member of staff on long-term sickness absence, are not hampered and are given the support they need.”

Changes to unfair dismissal rules which could save nearly £6 million a year for British business have been announced by Business Secretary Vince Cable and Chancellor George Osborne.

Today’s decision will see the qualification period for the right to claim unfair dismissal extended from one to two years. This will come into force on 1 April 2012. This is the latest development in the Government’s workplace reforms which aim to increase business confidence to take on more workers.

Changes to the unfair dismissal rules follow the ‘Resolving Workplace Disputes’ consultation published in January this year which also proposed measures to encourage early resolution of disputes, the speeding up of the tribunal process and measures to tackle weak and vexatious claims.

These combined proposals should see the number of unfair dismissal claims drop by around 2000 a year.

Business Secretary Vince Cable said: “The priority of this government is to increase growth in our economy. We have one of the most flexible labour markets in the world but there is more we can do to give British business the confidence it needs to create more jobs and support the wider economy to grow.

“Businesses tell us that unfair dismissal rules are a major barrier to taking on more people. So today we have announced that only after working for the same employer for two years can an employee bring an unfair dismissal claim.”

A key part of the Government’s growth strategy is to create the conditions which allow businesses, particularly SMEs, to grow and expand by reducing regulation and maintaining a flexible and dynamic labour market.

Over the past 18 months, the Government has started a fundamental Employment Law Review to ensure that it is fit for purpose, that it properly balances the needs of employers and employees, and provides the competitive environment required for businesses to thrive.

For the next three weeks the Red Tape Challenge will focus on more than 160 different cross-Government employment related regulations that businesses have to deal with in all areas of the workplace.

The campaign asks for a variety of suggestions about how regulations can be improved, simplified or even abolished, whilst also ensuring that the current standard of employment rights for employees are maintained. Examples of regulations which Government is seeking views on include the rules on collective redundancies, employment agencies, immigration checks, the National Minimum Wage and statutory sick pay, to make sure they are fit for purpose and easier for businesses to understand.

New research from Scottish Widows has revealed that UK businesses remain worryingly passive when it comes to protecting one of their key assets – their employees. This is despite over three-quarters (77 per cent) admitting that they can identify at least one individual whose loss through death or critical illness would have a serious impact on the profitability or future survival of the business.

The Scottish Widows Business Protection Report, which details research carried out with over 500 UK business decision makers, shows that the majority of businesses are still reluctant to protect themselves from the unexpected happening to a business owner or key member of staff. Just 13 per cent of businesses who have identified the importance of a key person hold insurance that would protect the business against their loss and despite such a low take up of business protection, 60 per cent of businesses admit that they would definitely not survive the loss of a key person.

In fact, it is more likely that UK businesses will insure office equipment, such as the photocopier, against breakdown than they are to insure a key individual whose skill sets are vital to the future survival of the business. The research shows that over a quarter (27 per cent) of businesses have insurance for office equipment in place, compared to just six per cent with financial protection if a key person dies and four per cent with protection if a key person suffers a critical illness.

A logical conclusion as to why the take up of Business Protection is so low is down to a lack of knowledge and understanding of the benefits – with 38 per cent of businesses not taking out cover as they don’t see its’ value, 16 per cent saying they hadn’t even thought about taking it out and 17 per cent saying they thought it would be too expensive. This highlights the value of sound holistic financial advice which could potentially ensure a better informed and better protected business population.

Unfortunately, despite the majority of businesses openly acknowledging that the loss of a key person would have a severe, if not fatal impact on their future survival, just 29 per cent have actually sought any form of advice on business protection, whether through an Independent financial adviser, their bank or any other resource such as their solicitor, accountant or even family and friends.

In addition, the research highlights that in the last 12 months almost a quarter (27 per cent) of business owners have invested their own money into their business, while a further 13 per cent expect that they will have to do so in the coming year. If people are to put personal assets at risk then it is vital that they take the necessary steps to prevent a damaging impact not just on their business, but potentially their families and personal lives.

Businesses are also worried about the future impact recent and proposed government spending cuts will have on them, with 53 per cent stating these will have a negative impact, despite a pledge by government to provide further support, through competition reform and reducing the regulatory requirements imposed on them.

Iain McGowan, head of savings and protection at Scottish Widows commented: “There are many reasons for business owners failing to take action. In some cases, this represents a failure to plan properly or a lack of understanding of the benefits of business protection. Perhaps even a refusal to contemplate the death or critical illness of a colleague. However the potential consequences to the business, demonstrate the importance of protecting arguably the one thing that can ensure its future survival; its employees.