Two key changes will have an impact on the direct cost of employment: increases to employer National Insurance Contributions (NICs) (introduced in the Budget) and the National Minimum Wage.

With such a direct costs increase employers are naturally looking at how to balance that increase, at least partially. There are several steps we recommend.

Firstly, conduct a thorough review of pay, pension and benefits policies. There may be opportunities here to optimise reward spend:

• Check whether salary sacrifice arrangements are efficient and being used to the full extent possible.
  
  
• Review and amend payroll processes to ensure you don’t overpay leavers either pay or holiday pay – there are a range of strategies to avoid this and, where necessary recover overpaid PAYE where payments are made that cannot be recovered.
  
  
• Assess the extent to which specific benefits are being taken up. Are some popular only in theory not practice? Is take-up for some so low that they should be removed and budgets refocused on more popular items?
  
  
• Review your minimum-wage compliance check. This is a complex area and we’ve seen employers being both too cautious and too permissive in how these are undertaken, leading to either pay top-ups that aren’t needed or unnecessary risk.
  
  
• Are any benefits being duplicated inadvertently? We see this often with employee assistance programmes, as arrangements with different providers have evolved over time. Is there scope to rationalise your offering?

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