Employers urged to modernise benefits packages

EMPLOYEE BENEFITS

Employers urged to modernise benefits packages

Nearly half of UK employers say that the benefits they offer to staff are outdated, according to research by Employee Benefits magazine in association with the Work Foundation.

The study argues that benefits packages were originally designed with the "middle class, white male" in mind, but by 2010 only one in five of the workforce will be white able-bodied males under the age of 45. Gone are the days of the pension scheme for all with private medical insurance, and possibly a company car, as you move up the ranks. Instead people would like to pick and mix their own benefits which can range from travel insurance and a personal computer for home use, to deciding how many days leave they can take each year.

Stephen Bevan, director of research at the Work Foundation, says: "The bad news is that workforce demographics are set to change still further, so many aspects of employee reward and recognition will need to be refreshed. It’ s no longer the case that employee benefits have a long shelf-life -- they must be constantly refreshed to keep them relevant and motivational."

Growth of flex

The research found that 15% of UK employers now offer flexible benefits, which allow staff to pick from a menu the benefits they want to receive, and a further 24% are either planning to or have a scheme under consideration. Half of employers (49%) say that in the future most organisations will offer benefits to staff in this flexible manner.

As Debi O'Donovan, editor of Employee Benefits magazine, explains: "People have become used to planning their lives online and selecting what suits them best, just look at the way people now put together their own holiday packages online. With the improvement in technology we are seeing the same advances in the workplace with staff putting together benefits packages to suit themselves."

Other key research results

Value of benefits: 76% of surveyed employers say they struggle to make staff understand how valuable their benefits packages are.

Culture: 57% of employers would like to have a workplace culture that encourages good work-life balance, 48% would like one that is empowering and the same number would like a high performance culture.

Choice: 66% of survey organisations believe that it is important to employees that they choose their own benefits.

Pensions: 50% of employers believe that having a good pension is important to staff.

Company cars: 61% of employers provide company cars, but almost all of them (98%) only offer it to selected staff.

Private medical insurance: 60% of employers offer private medical insurance, but only 42% of these offer it to all employees.

Voluntary benefits: 60% of employers offer staff a voluntary benefits plan, where staff can buy products, services and benefits through their employer at a discounted price.

Want to know more?

Title: The Benefits Research 2004, published by Employee Benefits magazine in association with The Work Foundation.

Methodology: The research is based on 447 replies received from UK organisations in December 2003 and January 2004.

The Work Foundation exists to "inspire and deliver improvements to performance through improving the quality of working life". The Work Foundation has consultancy expertise in reward strategy. For more information visit www.theworkfoundation.com

Employee Benefits is a monthly magazine for all those interested and involved in employee benefits. For more information visit www.employeebenefits.co.uk

Posted 1 June 2004