What are Employee Discount Schemes?

What is an Employee Discount Scheme?

An employee discount scheme is a program run by a company to help its employees pay a reduced amount for specific purchases. These schemes are a common type of employment benefit offered by companies, especially small businesses.

Different companies offer different types of employee discount schemes. What a company decides to offer is normally influenced by the type of organisation it is. For example, AirBnB offers a quarterly stipend for employees to spend travelling, whereas retail outfits such as the big supermarket chains offer a percentage reduction on shopping bills. Other companies may negotiate with different retailers or services to provide exclusive discounts for their employees.

Employee discount schemes are usually designed to be everyday savings and help make employees’ day-to-day lives easier rather than provide an occasional luxury or treat, although you will find schemes covering both.

Pros of Employee Discount Schemes

There are several benefits to offering an employee discount scheme:

Improves Employee Engagement

An employee discount scheme is designed to help employees reduce their everyday expenses, demonstrating that the company cares about the well-being and personal lives of its team. When employees feel valued and supported, they are more likely to be engaged and motivated to produce high-quality work.

Helps With Talent Retention and Recruitment

A good employee discount scheme not only makes a company more attractive to work for but can also encourage employees to stay longer in their roles. The actual perks of the discount scheme can be a significant draw for new recruits, but the fact that it exists at all is also an important signal of how the company values its employees.

Provides an Alternative to Pay Rises

Companies can help their employees save significant amounts of money with an employee discount scheme. Significant financial savings can be considered part of pay rise negotiations: reducing employees’ costs is a way of improving their financial well-being if it is hard for employers to fund large pay rises.

Can Be Used to Support Employee Wellbeing

If an employee discount scheme includes reduced-cost access to well-being services such as benefits packages such as gym membership, fitness classes, healthcare plans, and counselling services, there is a direct benefit to employee well-being. Discount schemes can also benefit employee well-being by helping the employee feel supported and reducing financial stress through the savings available.

Types of Employee Discount Schemes

A quick search on the internet will show you that there are many different types of employee discount schemes available. Some of the different types of schemes to help with everyday purchases include:

1. Cashback: employees get some of their money back when they spend it at specific retailers.
2. Discounts and discount codes: employees receive a reduced rate when purchasing a service (for example, discounted gym memberships) or a standard discount on their retail bill (for example, 10% off their shopping each time they visit a specific shop).
3. Vouchers: employees receive exclusive coupons to spend at a specific place, often somewhere that may be considered a treat or a good way to promote self-care.
4. Stipends: employees receive a certain amount of money to spend on a specific area, such as health and well-being, travel, or self-development, for example, training courses not directly linked to their roles.

How to Implement An Employee Discount Scheme

When you decide to implement an employee discount scheme, what benefits you offer and how you do it requires some thought and research. The following steps are a guide for introducing an employee discount scheme:

1. Identify Your Companies’ Needs

Consider your priorities in terms of helping your employees save money and what would benefit them the most. Running a survey is a good starting point, and you may want to run a workshop or set up a specific working group to gather feedback. You also need to think about who will run the programme for you internally and what factors you need to consider to ensure its sustainability. It could be very damaging to start an employee discount scheme and then have to stop it because you struggle to manage it.

2. Research Potential Vendors

Once you know what your company needs, you will need to spend some time searching different employee discount schemes for possible partners and determining what is right for you. Remember that you are looking for a long-term partnership, so the fit needs to be right for both parties.

3. Negotiate Your Employee Discount Scheme

Here is where your clear idea of what you need and why comes into play. Keep your priorities in mind as you negotiate: it’s not just what you can offer your employees but also the ease with which employees access the programme, the range of choices, and the flexibility. Each employee is different, and you want to set the company up with a scheme that works for as many people as possible.

4. Communicate To Your Employees

The key to its success is ensuring that everyone is aware of and understands how your employee discount scheme works. Think about how best to launch the employee benefits scheme, get feedback on how it works, and communicate it to new recruits. Some companies have a party or a gift to make the start of a scheme, whereas others go for a lower-key approach with a soft launch trialled with a specific department to iron out any teething issues.

4. Regularly Review and Update the Scheme

As with many elements of working life, it’s essential to get feedback and review how the employee discounts scheme works. Again, your original goals will help here. Make sure the scheme meets the requirements you set for it and don’t be afraid to amend it if it’s not working in the way you hoped.