New research by the Reward & Employee Benefits Association (“REBA”), sponsored by JLT Employee Benefits, highlights a trend for increasing personalisation in reward and benefits packages offered by UK employers.
The survey of 286 pay, reward and benefits specialists working across a variety of organisation sizes and industry sectors, captures challenges faced by HR managers due to a variety of shifts in 2016 and beyond. Benefits are reflecting big changes in working practices towards individual responsibility, which is expected to translate in a huge rise in home technology (laptops, tablets) offered through the workplace.
Reward and benefits managers who responded to the survey are projecting a 42 percent increase in the inclusion of this perk in in employee benefits packages in 2016, and a 161.5 percent increase in the long term. At the same time, employers are transferring more HR costs to employees through the use of flexible benefits, voluntary benefits and salary sacrifice. Group risk insurance looks particularly affected as Group Income Protection provided via a flexible benefits system is projected to jump by 60 percent in 2016, whilst Group Life Insurance expected to rise by 85.7 percent and Private Medical Insurance by 187.5 percent.
Salary sacrifice looks set to become more prevalent for managing employee benefits. The number of employers providing a DC scheme via salary sacrifice is expected to increase by 23.7 percent in the coming years. Meanwhile, car salary sacrifice for perk cars could virtually double from 2.1 percent of all schemes to 3.9 percent. The provision of financial education and advice is also likely to leap, with 28.6 percent more employers planning to introduce it in 2016 than offered it during 2015. Data shows they are prepared to put money behind it, with 69.8 percent saying benefits communication will be their top spending priority in 2016.
When asked about their top strategic priorities for 2016, reward and benefits specialists are mostly focused on improving employee engagement. Indeed, 35.6 percent of respondents said that this is their most important objective. Pay benchmarking comes second, with 29.8 percent of reward and benefits managers citing it as a priority for 2016. This is a result from legislation for fairer pay, including the introduction of the new living wage in April 2016 and Equal Pay Audits.
Debi O’Donovan, partner at REBA, said:“Significant societal, demographic, legislative and workplace changes are showing up in employee benefit choices and strategies. These seemingly iterate changes are causing cumulatively significant shifts in the way we think about work, and therefore reward: increased personalisation, more responsibility pushed onto the individual (and away from government and employers), greater flexibility in choice and working patterns. This research reflects the knock on effect on individual benefits packages.”
Andrew Drake, Head of Reward & Benefits at JLT Employee Benefits, comments:“2016 presents us with a great opportunity to take benefits schemes to the next level. People more and more expect their employer to look at remuneration in terms of total reward, whilst providing flexibility in the way they can choose the benefits that are most valuable to them. The underlying challenge for employers and their consultants lies in our ability not just to offer the right schemes, but also to educate and inform employees so they can make the most their reward and appreciate its value.”