Investing in staff is key, protecting them is critical!
Recent research from The Telegraph suggests that 99% of the estimated 4.9m businesses in the UK are Small to Medium Enterprises (SME’s).
This represents an employed workforce of 24.3m people, accounting for over 80% of the entire UK’s workforce.
Recently, the Confederation of British Industry (CBI) wrote that people are a business’s most valuable asset. Boasting a worth £17.61trn in 2013, that’s more than twice as much as machinery or buildings.
With this being the case, it’s clear to see that investment in people is of upmost importance in helping a business grow and compete. The right re-numeration, benefits, progression opportunities and working environment all contribute to keeping your workforce happy & loyal.
But what happens when something unexpected occurs, such as illness or even death, leaving the business without their key members of staff? This could be anyone from the Managing Director, down to technical or specialist staff who facilitates the daily running of the organisation.
How does that affect the business?
Consider the potential implications:
- Recruitment costs to find a suitable, qualified replacement
- Huge time, cost and resource to train new staff
- A significant loss of profits and increased drain on business funds as a result of lost hours contributed by the affected individual
- Business reputation – a loss of confidence from current clients leading to reduced income
- Existing staff feeling nervous about the future sustainability of the business, who start to look at alternative employment
- The business having to look at obtaining a loan/overdraft facilities to ease the financial burden by losing key staff members
The effects could be catastrophic, potentially even lead to questions about the viability of the business continuing – after all, key members of staff aren’t easy to find!
What if you could provision against this?
The good news is you can.
A simple, low cost insurance policy called ‘Key Person Protection’ allows you to protect your business from the financial effects of losing a key person. It can be arranged to provide a lump sum if the key person is diagnosed with a critical or terminal illness, or a lump sum if they die.
The policy proceeds are paid directly to the business to be used to help replace the key person and help cover the loss of profits that may occur.
Can your business afford not to have this cover in place?
Paul Reed – Protection Specialist and Co-founder of Vita – an independent, national award winning, insurance brokerage in Cardiff.