CIPD Research: Many employers up benefits spend despite the recession

Many employers increased their benefits spend last year despite the recession, according to research by the Chartered Institute of Personnel and Development (CIPD).

Some 40% of respondents to its Reward Management Survey 2010 said they had increased their benefits spend in the past 12 months. Those in the voluntary sector were most likely to have done so (48%), followed by the private sector (40%). More than a quarter (28%) said their benefits spend had remained the same.

By comparison, 16% of respondents had reduced their benefits spend in the past year. Employers in the private, and manufacturing and production sectors were most likely to do so. About one in five said they had cut back on their benefits spend during 2009, compared with three in 10 that reported their salary spend had been reduced during that period.

Just 5% of public sector respondents said they had reduced their benefits spend in the past year, however, more than one-third (36%) said they did not know how their spend had changed.

Looking ahead to the next 12 months, two-fifths of respondents said their benefits spend would remain the same, as many as a third said that it would increase, and one in 10 that it would fall.

Private sector respondents were most likely to predict that their benefits spend would remain constant – 45% said this was likely to be the case. Meanwhile, public and voluntary sector organisations felt that their benefits spend was more likely to increase, although public sector employers were more likely to predict a fall in their salary spend over this period.

As regards other planned changes, one-fifth of employers were intending to make changes to their pension arrangements. Among these, the most common amendment was to introduce a salary sacrifice arrangement (33%), followed by increasing employee contributions (23%), increasing employer contributions (20%), amending an existing final salary pension scheme (19%), closing a final salary scheme to existing members (16%) and introducing auto-enrolment (15%).

Full findings from the Reward Management Survey 2010 will be announced at the CIPD’s Reward Conference, taking place from 23 to 24 February.