Despite economic and political uncertainty, employers understand how important it is to continue investing in their workforce.
Nearly all UK employers (97%) expect to maintain or increase their spend on employee benefits over the next two years, according to new research by the Chartered Institute for Personnel and Development (CIPD) and consultancy firm LCP.
Eight in ten employers (81%) intend to spend about the same amount on employee benefits as they currently do, while 16% plan to increase their investment.
The 'Reward management' report is based on a survey of 568 HR practitioners about their organisation's benefits provision.
All employers were asked which benefits they intend to spend more on in the next two years, even if their overall funding will remain steady or decrease. The top priority was professional development (named by 43%), which includes training, paid study leave and professional subscriptions. This was followed by health and wellbeing (29%), including occupational sick pay, employee assistance programmes and flu jabs, and financial benefits (25%), such as pension schemes, loans to help staff in financial hardship, and free money and debt advice.
The research also revealed that one in six employers (17%) expect to introduce a formal work-life balance policy – such as flexible working and shared parental leave arrangements – within the next year. And the authors of the report noted that when there are a higher number of women in management positions, an organisation is more likely to already have a formal work-life balance policy in place.
Commenting on the findings, Charles Cotton, senior reward and performance adviser at the CIPD, said: "It’s encouraging to see the benefits that have been earmarked for further spend in the near future relate to people development and wellbeing. Spending in these areas can help to improve employee, and ultimately, corporate performance."
However, the report also warned that any extra investment in employee benefits risks being undermined by a lack of analysis. The majority of respondents (74%) don’t currently conduct a review of their benefit spend, which means they could be missing the opportunity to establish how effective their benefits are.
Meanwhile, 16% of employers do not always communicate what benefits are on offer and one in five (21%) say their benefits are not easily accessible.
Dipa Mistry Kandola, head of flexible benefits services at LCP, commented: "Our report reveals that more employers than expected don’t promote their benefits or make them easily accessible. Organisations could be wasting significant costs if their people don’t know about the range of benefits on offer, or are put off utilising them if they’re not easily accessible.
"Organisations will only be able to get true engagement from their people if they offer tailored benefits facilitated through a comprehensive, multi-channel communication strategy that encourages feedback. The way benefits are communicated, delivered and measured is just as important as having the right benefits in place."
The survey found that the ten most popular benefits offered to employees across all sectors (private, public and voluntary/not-for-profit) are:
1. Pension scheme (trust or contract-based)
2. Paid leave for bereavement
3. Training and career development
4. Childcare vouchers
5. Occupational sick pay
6. Employee assistance programme
7. Christmas party and/or lunch
8. Free tea and coffee
9. 25 days’ or more paid leave for full-time employees
10. Paid leave for jury service
With businesses in a battle for the best talent, it's essential for firms of all sizes to be able to attract workers by offering modern working practices and the sort of benefits that employees really want.
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