Companies keen to reduce staff costs without penalising employees should think carefully about how they operate their benefits scheme, an expert has advised.
The International Monetary Fund recently cut its growth forecast for the UK to 1.6 per cent in both 2008 and 2009 and with the economic outlook gloomy, many companies will be keen to control spending more tightly.
One way to do this is to look at where savings can be made when providing benefits, according to Ernst & Young's director of employer services Jim Boylan.
"What's important to remember is that it is not always the most costly perks that employees appreciate most. Even better, there are a number of benefits that are
tax advantageous," said Mr Boylan.
Among his recommendations are establishing an approved company share option plan and replacing bonus payments with additional pension contributions in order to cut the tax bills of both employer and employee.
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