TYPES OF BENEFIT ON OFFER
The evolution and complexity of employee benefits have led to myriad definitions. For the purpose of this research, we have used the following:
The traditional package of employer paid benefits in which employees can now opt out of, or switch
A package of employer-paid benefits that enable staff to switch between two or more benefits, or between
employer-paid perks or cash.
Products or services on which the employer negotiates a discount with suppliers, but which the employee
pays for out of his or her net salary.
The mechanism through which employees can opt to pay for tax-efficient benefits by sacrificing some of their gross salary for the employer to purchase these benefits on their behalf.
Most employers still offer traditional core benefits to at least some of their employees. But over the past eight years, the market has seen a significant shift in the way employers offer other benefits, driven largely by product and provider evolution and external pressures, such as the economic climate. Over the years, this has led to a consistent rise in the percentage of employers that offer benefits through another mechanism, be it via flexible benefits, on a voluntary basis or through a salary sacrifice arrangement.
This year, there has been a rise in the percentage of respondents that offer benefits to staff on a voluntary basis. Some 79% now offer perks to all staff in this way, up from 72% last year. Overall, just 13% say they do not offer voluntary benefits to any employees, down from the 19% that said the same in 2011.
In part, this may be due to employers’ desire to offer a package aimed at helping their employees’ money go a little bit further in tough times, by offering discounts on products and services. Providing an element of choice and flexibility enables staff to tailor their package to suit their own individual needs.
Voluntary benefits schemes also enable employers to offer staff something extra at little additional cost, which can help to boost engagement and morale at a time when it may not be possible to provide significant pay rises or more costly benefits.
Read more Benefits research 2012