Nearly all employers (97%) are planning to maintain or increase their spend on employee benefits over the next two years, new research from the CIPD and LCP reveals. But a lack of analysis over the benefit spend is highlighted as needing improvement.
The latest ‘Reward management’ report, released by the CIPD and LCP, surveyed 568 HR practitioners questioning their organisation’s benefits provision. Employers are legally required to supply some benefits, such as a pension for automatic-enrolment purposes and paid leave, but can otherwise choose what’s offered as they see fit. Benefits can therefore range from social events to more substantial rewards, like Christmas bonuses and company cars.
The report finds 8 in 10 employers (81%) intend to spend the same amount on employee benefits over the next two years as they currently do, while 16% plan to increase their investment.
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. Respondents said they are most likely to increase investment in the following areas:
- Professional development (43%), which includes training, paid study leave and professional subscriptions.
- Health and well-being (29%), covering such occupational sick pay, employee assistance programmes and flu jabs.
- Financial benefits (25%), such as pension schemes, loans to help staff in financial hardship and free money and debt advice.
The research also shows that one in six employers (17%) expect to invest in a formal work-life balance policy within the next year, which can include flexible working and shared parental leave arrangements. Interestingly, the report finds 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.
Charles Cotton, senior reward and performance adviser at the CIPD, commented: “Despite the recent economic and political uncertainty, employers are committed to investing in their employees and their future. It’s encouraging to see the benefits that have been earmarked for further spend in the near future relate to people development and well-being. Spending in these areas can help to improve employee, and ultimately, corporate performance.”
But the CIPD and LCP’s report warns that any extra investment in benefits risks being undermined by the lack of analysis employers carry out. The majority of respondents (74%) said they don’t currently conduct a review of their benefit spend, so could be missing the opportunity to establish how effective their benefits are. This is despite benefits playing an important role in helping organisations succeed, with two-thirds (66%) of respondents saying their main purpose was to attract, recruit and retain staff to support current business needs.
The report also reveals that 16% of employers do not always communicate what benefits are on offer and 1 in 5 (21%) say their benefits are not easily accessible.
The CIPD is calling for better analysis of benefits so that employers can be confident they’ll contribute to the success of individuals and the business as a whole. It has a range of resources in HR analytics to help people professionals make a start.
The CIPD is also encouraging HR teams to be more proactive when promoting benefits and to adopt a multi-channel approach. This includes using tech solutions to allow employees to explore the benefits available to them in their own time, and for managers to have one-to-one discussions with their direct reports.
The survey found that currently the ten most popular benefits offered to employees across all sectors (private, public and voluntary/not-for-profit) are:
- Pension scheme – trust or contract-based
- Paid leave for bereavement
- Training and career development
- Childcare vouchers
- Occupational sick pay
- Employee assistance programme
- Christmas party and/or lunch
- Free tea and coffee
- 25 days’ or more paid leave for full-time employees
- Paid leave for jury service.
If you need better understanding of the benefits your organisation provides for staff you can contact Jamie Tuffield, advo’s head of employee benefits, on firstname.lastname@example.org.
You can view the original CIPD press release here.