I have been privileged to have had the opportunity to work outside the UK for the last four years with my last role in Asia running global benefits for a multinational bank. Each year though, I read Employee Benefits’ Benefits research in detail because it gave me a good independent view of what was happening within the UK benefits market. So if I was away for four years again, what do I expect to have influenced the benefits agenda by 2020, or about 1,000 days away from now? Below are three themes for you to reflect upon or challenge
Benefits design
Most organisations now seem to have reached some stability on benefits design and offering their employees choice. With the demographic differences in the workforce, this will not diminish. But employers are starting to understand that it is not what they offer, but how, that is more important. Segmentation, personalisation, data analytics and marketing techniques will continue to be a skillset needed by the benefits professional. What makes your benefits unique is how you engage your workforce. Regular targeted communication using technology will continue to replace once-a-year mass-market generic communication methods and simplification of offerings rather than complexity will be the flavour for the next 18 months.
Also, total reward communication has never been optimised; it needs to properly highlight the intangible aspects of work and what makes a business unique, such as flexible working.
Longevity of the workforce still needs to be understood and plans adapted. Keeping older employees in the workforce at high grades causes challenges for talent management as well as cost base management. But losing such employees still causes knowledge drain. Benefit plans need to be able to support staff moving laterally and downward within the organisation.
As xx said: “It is not what benefits you offer but how, that is more important today”.
Legislation
Rightly or wrongly, UK benefits have always been strongly driven by legislation. With the changes to salary sacrifice, which came into effect on 6 April, it now feels we have a more stable and fair taxation basis that can be sustained by the government.
I would expect some further simplification around pensions to help employees truly understand the options available to them, especially compared now to alternative vehicles such as the Lifetime individual savings account (Lisa).
More importantly, we have Brexit around the corner. This will see us picking the most appropriate aspects of employment and data protection laws, then overlaying them with aspects which will drive the UK economy growth. I expect data protection to be a strong focus of differentiation but employment laws to remain flexible to enable rapid expansion and contraction of the workforce on economic grounds. Threats around movement of resource within the EU will be negotiated well to enable the UK and businesses to keep talent that we need from overseas.
Probably the biggest area with the potential for change is consumer protection within the workplace. The playing field between buying a product through work versus individually is unbalanced and greater protection is needed in the workplace.
Benefits Technology
The market seems to be splitting into two, with global solutions that can provide a consistent brand and user experience across multiple markets, and local UK best-of-breed solutions that often use multiple sites from multiple vendors to create a unique employee experience. Both these markets will continue to grow and some of the innovative vendors around wellness and financial guidance are currently quite exciting and refreshing to the UK market. These niche players are expected to continue to grow in the next few years as technology enables data to be transferred in real time efficiently between vendors. But the vendors will need to work together better to ensure data protection and consumer rights are at the forefront of their offerings. Expect, and demand, systems to be built more quickly and reliably including mobile as a primary communication channel.
In summary, roll on 2020. It is still an exciting time to be in employee benefits in the UK.
Marcus Underhill is director of engagement and insights at Staffcare