‘If you start playing around with bonuses, in my experience you end up hacking people off,’ says Louise Hudland, HR director at law firm Shoosmiths.

Louise Hudland, HR director at law firm Shoosmiths, is wary of cash benefits. ‘If you start playing around with bonuses, in my experience you end up hacking people off,’ she says, pointing out that half of Shoosmith’s 1,400 employees are support staff. ‘The last thing I want to do is introduce a financial incentive that cuts across the business.’

Hudland’s solution is to concentrate on benefits that can be used and appreciated by everybody – and have a “wow factor” that gets people talking. The most popular of these, she adds, is permission to take the day off on your birthday, with the added boon of a £50 shopping voucher.

‘People love it,’ says Hudland. ‘I don’t care how highly paid you are, it’s still your birthday. Even more-senior staff benefit because they feel they can also take their birthday off.’

Non-cash benefits offered by today’s employers range from childcare vouchers and private healthcare to concierge services. One reason for the boom in benefits, apart from the tax advantages, is employers’ desire to attract and retain staff, according to Martin Tripp, managing partner at headhunting firm The Watts Partnership.

‘If someone works in a cash-only environment, [employee benefits] can be a big plus in attracting them,’ says Tripp. ‘But if they already have employee benefits, it’s difficult to get them to move from that to a salary-only package.’

There are other advantages. According to Phil Corfield, finance manager at IT company Gardner Systems, benefits help create a company culture that’s conducive to productivity.

‘Our overall package gives people a lot of support, not just through the tangibles, like private health insurance, but the intangibles too,’ says Corfield. ‘If people need to work from home for a period, or have childcare issues, we tend to be quite flexible. That means that they’re willing to be equally flexible with us.’

Tripp agrees that when it comes to motivating staff, it pays to be adaptable. ‘Flexible working is sneaking up on the outside as the benefit du jour,’ he observes. ‘Even when people aren’t paid particularly well, it gives them a feeling of being loved and looked after, which replaces the salary as a motivator.’

Popular perks

Flexible benefits packages are increasingly popular. Photo agency Getty Images decided to offer flexible benefits last summer, after an employee survey revealed limited awareness among staff of the perks they already received.

‘We have a young workforce, and what we offered were protective benefits you would only ever need if you were ill or retired,’ says Ruth Smyth, Getty’s vice-president of HR. ‘No-one knew the value they had.’

Now, employees can flex their benefits through a system of credits, administered online by the employees themselves. For example, they can ‘sell’ holiday entitlement in order to upgrade their health cover, or downgrade their life insurance to purchase childcare vouchers.

‘There’s a feeling around the office about how valuable this is to employees,’ says Smyth. ‘It also reflects the kind of company we want to be: by giving people the right to choose their benefits, we’re treating them like adults.’