Aviva’s Working Lives Report has found that 2016 could bring a workplace benefits boost in the private sector. The latest research shows that almost one in five (19%) employers are planning to increase spending on workplace benefits in the next 12 months, rising to 25% among large firms (250+ employees).
This is a major reversal from Q1 2013, when just 6% of employers were planning to increase their spending and 17% were planning cuts.
More companies are now offering employee benefits beyond basic salaries than was the case three years ago – partly resulting from the roll-out of auto-enrolment. Additional staff benefits are now offered by 86% of employers, up from 81% in Q1 2013.
The report suggests the increase in benefits provision by private sector companies may be linked to a shift in HR priorities. Attracting employees with the right skills is now the number one aim of businesses in regards to their staffing: 36% of employers now see this as a top priority, up from 17% in Q1 2013.
More than half (56%) of employers offering benefits now say they do so to support recruitment and retention, compared with 44% three years ago. Almost two in three (64%) now make staff benefits a key feature of their annual strategic planning.
Businesses are also seeking more regular feedback from staff on the benefits they offer: 72% do so at least once a year, up from 60% in 2013.
Private sector confidence and work/life balance both improved
The three years which have passed since Aviva’s last Working Lives report in Q1 2013 have seen a degree of confidence return to the UK economy. Two in five (40%) employers are confident in the economy, compared with just 25% three years ago. Those who lack confidence have fallen from 45% to 19%.
Private sector employees have also felt an improvement in their work/life balance. More than three in four (78%) feel they work in a friendly atmosphere (up from 64% in 2013). There has also been a significant increase in those who are happy with the impact work has on the time they spend with their family, up from 53% in 2013 to 67% 2016.
The Working Lives report also examines employers’ biggest business concerns and how these have evolved since Q1 2013. It found that staying ahead of the competition and innovating remains the most common concern among private businesses, affecting 47% – up from 42% three years ago.
In line with their returning confidence, surviving the downturn (16%) has been overtaken as employers’ second biggest concern by adapting to have more efficient systems, processes and technologies (30%).
Among small firms, keeping up with new legislation, such as pension changes, is the biggest concern, affecting 37%. This also registers as the third most common concern across all employers, with 25% feeling this pressure compared with 14% three years ago.
Although large firms report less pressure from legislative changes, they are more likely to feel concerned about keeping up with employees’ pay and benefits package expectations. This now affects 18% of all firms, up from 13% in Q1 2013.
Auto-enrolment retains support from majority of employers and employees
The pressure to keep up with new legislation is likely to have been impacted by the continued roll-out of auto-enrolment across firms of different sizes since 2012. 480,000 micro, small and medium sized businesses are due to set up a workplace pension for the first time this year.
Aviva’s research shows both employers and employees have continued to welcome the Government’s decision to introduce auto-enrolment for company pension schemes. Three in five employers (61%) in Q1 2016 agree with making the workplace the focus for automatic pension savings – a slight increase from 58% in Q1 2013. Approval rises to 74% among those who have begun auto-enrolment (74% agree while 6% disagree), indicating that the initiative has largely been well received to date.
A significant 93% of staff who have experienced auto-enrolment say the process was straightforward. This is particularly positive given that just 55% of employers who have started the process share this view, falling further to 24% among small firms.
Nevertheless, the biggest reported effects of auto-enrolment to date are both positive. One in four (25%) employers who have auto-enrolled staff say the biggest effect has been to modernise their pension scheme, while one in five (20%) say the biggest effect has been to allow them to provide better pensions for more employees.
This contrasts with the views of those firms yet to begin their auto-enrolment journey. Alongside providing better pensions for more employees (13%), the biggest effect they anticipate is passing on the cost to customers (13%). A similar proportion (12%) are concerned about limiting the size of salary increases.
Andy Curran, Managing Director of Corporate & Business Solutions at Aviva, said:
“This report paints a very positive picture of the workplace in Britain on the whole, and it is pleasing to see that – with confidence improved since 2013 – businesses are again looking to invest in their workplace benefit packages. Additional benefits are a great way to attract and retain skilled employees and increased investment gives a clear indication that employers are again looking to expand, rather than just survive.
“Auto-enrolment has played a major role in that and it’s good to see that those who have been through it are reporting positive experiences. For employers, the journey may not have been as smooth, especially for those smaller businesses with limited resources. But auto-enrolment is encouraging millions of people to save for their futures and the work businesses of all sizes are doing to support it is very encouraging.”
Full press release on www.aviva.co.uk