Employee Engagement and the Government
Does the UK Government have a part to play in furthering Employee Engagement in the workplace?
The Government has already expressed a desire to boost Employee Engagement in the UK, through initiatives such as Engaging for Success in 2009. But is it doing enough to raise the country’s lagging engagement efforts?
A new article by current affairs and business publication Raconteur looks at what kind of additional actions it could take to further Employee Engagement, and the effects of some current government policies.
One of the main areas of potential improvement is training, where it’s suggested the government could promote, subsidise or reward activities within an organisation, allowing more workers to be developed and empowered. Although the apprenticeship levy was a good first step, it’s believed more could be done to boost engagement and therefore productivity through further investment in adult education.
Health and wellbeing is also highlighted. The government could take steps to reward companies proactively trying to improve employee wellness, by allowing them to claim back tax on physical wellness activities. Further work could also be done on flexible working, creating additional legislation to allow employees more freedom to manage the work-life balance.
Despite these positive potential actions, recent government legislative measures may have actually had a negative impact on engagement levels. Salary sacrifice schemes have existed for some time, for benefits such as Childcare vouchers, gym membership and mobile phones. These schemes allow your employer to dock a set amount from your salary, in return for providing non-cash benefits. The advantage of the scheme was that with a lower overall salary (after subtracting the salary sacrifice scheme sum), you pay less National Insurance contribution (as could your employer), and in some cases less tax as well. This gives you more value in real terms.
Effective from April this year however, several salary sacrifice schemes no longer allow you to save on both Tax and NI. Kevin Gude, Director of Gowling WLG says “Health and wellbeing-related benefits are valuable but, as a result, expensive. Offering them through a salary sacrifice arrangement made them just a little easier for employees to buy.” With these schemes now proving less beneficial, it’s likely there could be a drop in Employee Engagement, especially as some of them link directly to health and wellbeing.
In addition, although the living wage is a positive change in many aspects, national living wage payments cannot be used against salary sacrifice schemes. This means that those on lower incomes who were previous using salary sacrifice schemes might actually be worse off than before.
The increase in Insurance Premium Tax is also causing some companies to re-evaluate whether they are able to continue to offer perks such as private medical insurance and dental cover. Again, this will negatively impact staff wellbeing and therefore engagement.
There are undoubtedly a myriad of potential actions the government could take to boost employee engagement, but at the moment, there is definitely an element of mixed messages. If it wants to be seen as championing engagement to turn the tide of the UK’s flagging performance, it needs to be aware of knock-on detrimental effects of other policies, and compensate for them with other initiatives.
With these recent policies possibly reducing Employee Engagement in your organisation, it’s important to make sure you get the most out of all your workforce systems. Bodet’s modern Time & Attendance Solutions can be used to boost Employee Engagement across a number of factors, including flexible working, staff empowerment, communication, fairness and wellbeing.
If you would like further information on how we can tailor a Time & Attendance System for the specific needs of your organisation, or to book a free demonstration, please contact us.