The world has changed immeasurably in the 12 months since we published the Benefits research 2016.
As the UK moves further towards its exit from the European Union and, at the time of writing, towards a snap general election, much uncertainty exists as to the potential impact of such events on the economy, business and employee benefits.
Over the past year, however, some uncertainties have already been removed, such as that surrounding salary sacrifice arrangements prior to the government’s confirmation in November 2016’s Autumn Budget that it would limit the range of benefits attracting tax and national insurance (NI) advantages when offered on this basis.
While this may not have been the result many in the industry were hoping for, confirmation of the government’s decision did mean that employers could begin to make plans about how their organisation would deal with the change and adapt their benefits strategy accordingly. The impact of the change appears to have been wide-reaching; just a third of respondents said it would not have an impact on their benefits strategy because the benefits they offer via salary sacrifice are exempt from the changes. Of those that are affected, approximately a fifth respectively say that they will have to change the mechanism by which they offer impacted benefits, they will communicate the changes to staff or they will review their benefits strategy in light of the change.
But even against a backdrop of such significant change, some of the issues shaping respondents’ benefits and reward strategies remain constant, as they have done for the past 13 years. Just as in 2004, when Employee Benefits published the inaugural Benefits research, this year the effectiveness of reward and benefits in supporting recruitment and retention are the top two reasons behind respondents’ decision to offer such schemes. This is hardly surprising; after all, whatever the challenges facing organisations, they will always require top talent in order to succeed in business.
As we move towards another potentially turbulent 12 months, it will be interesting to see the impact of political and economic shifts on reward and benefits.