From June, companies with 49 or fewer employees will begin automatically enrolling them into workplace pensions: however, almost three in ten employers (29 per cent) with less than 50 staff have not started preparing for this.
At the same time, 18 per cent do not currently offer Group Life Assurance to any members of their staff, highlighting the untapped potential for this employee benefit among smaller businesses.
Of the small businesses that already offer Group Life cover, the most popular reason for doing so is that it is an attractive benefit for employees (33 per cent).
A quarter (24 per cent) offer this benefit to protect or support their employees, while one in five (20 per cent) say it fits with their paternalistic or caring company culture.
18 per cent use Group Life provision as a recruitment or retention tool.
Employers admit to not knowing much about Group Life Assurance, but cost and simplicity are key drivers
The three most common reasons that sub-50 employers do not offer Group Life cover are:
- it is perceived as an expense the business cannot afford (42 per cent),
- employers don’t know much about it (24 per cent), and
- the belief that staff do not understand or value it (17 per cent).
This runs alongside a lack of understanding of Group Life Assurance among the employers themselves.
One in 10 (10 per cent) small business employers have no knowledge or awareness of Group Life cover, while 40 per cent admit to knowing little about it.
Over a quarter (28 per cent) believe they know what it is but are not sure of the cost or the value to their business.
91 per cent of small business employers believe Group Life Assurance costs would be more than 1 per cent of their payroll, with 45 per cent thinking it would be over 3 per cent: in reality, it typically costs less than 1 per cent.
The size of the employer’s business also affects the factors that dissuade them from buying Group Life cover – cost was most important factor for over 50 per cent of employers with 2 to 4 employees, while among those with 20 to 50 employees, over a third (34 per cent) mentioned a lack of time or resources.
Over half of sub-50 employers interested in an easy-to-implement Group Life Assurance product
When offered a simple, low cost (£4-£8 per employee) Group Life Assurance product with minimum administration, 52 per cent of small businesses without cover in place expressed an interest.
Group Life doesn’t only support employees and their families financially but also through wider support, such as bereavement and probate helplines. Almost two-thirds of small business employers (62 per cent) said they would be very concerned by the impact an employee’s death would have on their family.
60 per cent said the same about the impact it would have on them personally and 55 per cent worried about the effect it would have on other employees.