I often get asked: ‘What trends are you seeing in the market?’ Usually, trends in benefits are like slowly shifting sands where you can spot potential formations years in advance. But in the past few weeks, I have seen two sets of research, both commissioned by Employee Benefits, that indicate we are experiencing a sudden step-change.
Ever since the economic downturn began back in the summer of 2007, we have been waiting for employers to cut benefits. But to date, every action has indicated the opposite. During a time of pay freezes and redundancies, employers have been careful to preserve or even enhance their benefits offerings. In fact, in recent years, benefits managers in this market have been busier than ever, rebroking benefits to get better deals, reviewing suppliers to squeeze out every drop of value, and implementing salary sacrifice wherever they can to preserve benefits.
Now, in year five of these tough times, benefits managers are straining to find any more savings. This, coupled with the need to budget ahead for the costs of auto-enrolment and employer pension contributions, is leading to a new shift in benefits. For the first time, we are seeing data indicating that employers are considering reducing benefits. The Employee Benefits/YouGov research 2012, published at Employee Benefits Connect last month, revealed that 26% of large employers expect their level of benefits to decline in the next 12 months (13% of medium and 8% of small employers said the same). The Employee Benefits/Towers Watson flexible benefits research 2012, published in April, also highlights an austerity-induced behaviourial shift.
We explore the impact of tough times in our cover story (Adding colour to benefits boost staff engagement) where we also flag up a crucial trick many employers are missing – benefits that cost little to offer but, statistically, drive employee satisfaction. These include financial advice in the workplace and discounts on your own or other organisations’ products. Most employers consider these perks of little importance, but they are three of only eight benefits that have a proven link to staff satisfaction with their employer. Check out this month’s supplement on financial education – a benefit that will be welcomed by cash-strapped workers.
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