Research by Chase de Vere, the independent financial and corporate advisers, in conjunction with Lightbulb, an independent research company, shows that many employers aren’t confident in the effectiveness of the employee benefits they offer to their employees.
The Research consisted of analysing 2,500 business records which are representative of the UK company population and then conducting interviews with the decision makers in 300 randomly selected businesses. When asked: Are you confident that your benefits package helps recruit and retain the best quality of staff? Only 42 percent of employers said yes, while 58 percent said no. When asked: How confident do you feel that the benefits package you provide offers value for money?
64 percent of employers said they were confident, while 36 percent said not confident. This is interesting when compared with the previous answer as it suggests that some employers are happy with the amount they are paying, although accept that the benefits might not be valued by their employees. They are looking at cost rather than value. When asked: Why do you offer the particular range of benefits you provide?
The responses were:
Cost 34 percent
Historical benefits package 25 percent
Popularity with staff 22 percent
Range of choice 11 percent
Recommended by adviser 8 percent
This follows the theme that cost is the most important factor for employers. However, it is concerning that a quarter of employers retain a benefits package simply for historical reasons. These benefits are unlikely to provide value for money and by not reviewing it employers are probably paying too much.
What criteria do you use to measure the effectiveness of your benefits package? The responses were:
Staff satisfaction surveys 49 percent
None 31 percent
Market competitive measures 24 percent
Cost threshold measures 17 percent
Criteria agreed with adviser 4 percent
It is positive that many employers seem to be getting feedback from their staff. However, the figure that jumps out is that 31 percent of employers have no means to measure the effectiveness of their benefits package. They could be simply throwing money down the drain.
In term of future plans, we asked:
Do you intend to improve your employee benefits package in 2016?
39 percent of employers said yes, while 61 percent said no.
This is broken down as:
Yes we intend to invest further 2 percent
Yes, we intend to increase the options we offer 5 percent
Yes, we will likely review 32 percent
No, costs are prohibitive or we have no budget 18 percent
No, we are happy with benefits package 36 percent
Have not considered this yet 7 percent
Sean McSweeney, Corporate Advice Manager, Chase de Vere, says: “It is deeply alarming that many employers aren’t confident they are getting value for the money they’re spending on employee benefits, yet are doing nothing to address it. “Employee benefits packages can represent a significant spend for many companies and if these amounts were spent elsewhere it is likely the Finance Director would be ‘all over it’ making sure the money was spent wisely. Yet with employee benefits spend this doesn’t seem to be the case. If employers don’t review their benefits packages they won’t know if they’re getting value for money, they won’t know if they can improve benefits for their employees and they won’t know if they can actually save money, perhaps by updating historical benefits or putting more focus on benefits their employees actually want and reducing spend on those they don’t”.