Companies are changing benefit policies to reflect post-pandemic priorities and attract and retain staff in one of the most competitive labour markets the U.K. has ever experienced.*
Of the more than 230 UK organisations responding to the survey, 46 per cent plan to change their current benefits offerings and 71 per cent will be enhancing their benefits.
“The pandemic has prompted a mass shift in working habits and companies are beginning to reflect this accordingly when it comes to their benefits strategy,” said Nick Burns, CEO of Gallagher’s Employee Benefits Consulting Division in the U.K.
“The survey reveals, areas such as health and wellbeing and ensuring a family-friendly approach to benefits are increasingly viewed as central to the employee experience.”
Key trends include:
Employee Health and Wellbeing
Health and wellbeing continues to be a major focus this year as a resilient workforce will be more agile when adapting to change. That said, one-third of organisations added new benefits in this space.
- Three quarters of organisations (76 per cent) reported offering an Employee Assistance Programme (EAP).
- There has been an increase in fitness-related benefits such as a discounted gym memberships (69 per cent) in order to accommodate the different ways people have been exercising during the pandemic.
- Annual leave has become more important to support employees’ mental wellbeing.
- Holiday or Annual Leave is a statutory benefit in the UK (minimum of 20 days plus 8 bank holidays for a full-time employee) and just over half of organisations (51 per cent) have applied the same holiday entitlement to all employees.
- The ability to buy or sell holidays (36 per cent) is up slightly compared to last year.
- Of those who offer flexibility, around 42 percent allow both buying and selling of holidays.
- It is most common by far to allow five days to be bought or sold where trading is offered, although a few organisations allow 10 days. The highest cited response was 15 days.
- In addition, organisations are offering a variety of alternative leaves outside of family leave, including: bereavement/compassionate leave (93 per cent), study leave (58 per cent), volunteering leave (36 per cent), carers’ leave (22 per cent) day off on birthday (10 per cent).
Equalisation and Fairness of Benefits
Organisations are endeavouring to provide more family-friendly benefits.
- Accordingly, maternity and paternity pay has improved – with 88 per cent increasing enhance pay compared to 62 per cent two years ago.
- Forty-one per cent of respondents offer shared paternal leave on the same basis as maternity, with paid paternity leave increasingly becoming the norm.
- The extended duration of leave has also risen among 32 per cent of respondent organisations, compared to just 17 per cent two years ago.
- The adoption policy matches the maternity policy for the majority of organisations (88 per cent).
The COVID-19 Effect on Benefits
The long-term effect of Covid-19 on ways of working is also starting to materialise, with 64 per cent of organisations revealing that they won’t return to pre-pandemic ways of working.
- Overall, 86 per cent of organisations have made changes to their working practices in the past year, offering more agile or flexible working.
- In total, a fifth of organisations have offered change shift patterns too, whilst half have provided home office funding for their workforce.
- Reflecting the impact of the past year on the workforce, 10 per cent of organisations have witnessed an increase in uptake of Private Medical Insurance (PMI) by employees – whilst 19 per cent noted an increase in the use of sick pay.
- Company-funded private medical insurance (PMI) continued to prove the most popular health benefit offered (77 per cent).
- The provision of Health Cash Plans increased slightly on last year at 32 per cent, whilst 36 per cent of respondent organisations offered company-funded health screenings or medicals.
- The number of companies offering sick pay increased slightly, up from 43 per cent last year to 51 per cent.
“This will be an ongoing process as in 2022 we can see that benefit redesign is very much on the agenda,” said Burns.
“Benefits are of course just a part of the jigsaw puzzle to the wider employee experience and how getting that right will help with talent retention and organisational culture.”
* Gallagher’s 2021 Benefits Strategy Benchmarking Survey report.