Most companies pay bonuses to reward high performing employees – I recently had the pleasure of discussing more interesting ways of engaging employees with a fast growth tech company client.
Beforehand, we’d discussed the tricky financial difficulties that may lie in-store for the majority of folk over the next 5 years given our perilous financial deficit in the UK. At the opposite end of the spectrum, the company has spare cash earning disappointing rates of interest on deposit. Given the potential economic uncertainty ahead, the management team was keen that any employees laden with existing expensive personal debt could clear it as soon as possible given the stress that this can cause. So they wanted to discuss ways of helping employees reduce any personal debt e.g. credit card, store cards etc with available spare cash available in the company.
We discussed the possibility of setting up a company hardship fund especially for company employees to crack this problem. The thinking is that the company would lend money to employees who apply for financial assistance and pay a relatively low interest rate (compared to the rate suffered on credit cards yet more than the company can receive on deposit). The loan could be repaid either by repayment or by salary sacrifice. We are currently working with the management team to consider ways of helping the company achieve this without triggering any unexpected tax charges e.g. for the salary sacrifice option.
How refreshing to see a company that puts its employees’ welfare on a pedestal like this – there are others that have shown that this works to build successful profitable businesses.