Peter Reilly: Does paternalism still have a place in benefits?

Nearly 20 years ago, when I worked at Shell, we organised a debate on the future of pensions.

In the left corner were those who felt defined benefit schemes should be retained because they ensured employees could look forward to a secure financial future. In the right corner were those that favoured defined contribution schemes because of their greater transparency, individual choice and flexibility.

This was, in part, a battle between traditionalists, who saw a welfare role for the employer, and more modern free marketers, who felt it was none of the organisation’s business what employees did with their money.

The same argument could run through a variety of benefits now provided by employers. Some might be seen as the nanny state at work, others as responsible measures to protect employee interests.

Of course there is always a middle way that argues that, irrespective of economic philosophy, sensible employers protect their own interests by having healthy and happy staff who are not fretting about issues such as when their National Health Service appointment will come through, whether they are saving enough for retirement or whether their children are being well looked after.

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Protecting corporate reputation, developing the employer brand and building employee engagement all require organisations to consider financial and personal wellbeing more thoughtfully, and that will be reflected in the employee benefits they offer.

Peter Reilly is director of HR research and consultancy at the Institute for Employment Studies