Employee Benefits Salary Survey 2008

Women working in-house for employers in the field of compensation and benefits are earning significantly less than their male counterparts, according to the Employee Benefits Salary Survey 2008.

Benefits professionals’ salaries differ between genders, says Amanda Wilkinson

Women working in-house for employers in the field of compensation and benefits are earning significantly less than their male counterparts, according to the Employee Benefits Salary Survey 2008.
There is a difference of more than £15,000 between the mean salary for men (£59,177) and women (£43,213), according to the survey.

Bonuses
Salary Increases
Leave
Pensions
Share Schemes
Company Cars
Other Benefits

Experience in compensation and benefits is fast becoming recognised as a highly-prized asset in HR. As a consequence, salaries for professionals specialising in this area are moving ahead of their counterparts in general HR, as is borne out by the findings of the Employee Benefits Salary Survey 2008, which quizzed 543 respondents who are responsible for, or contribute to, the management of compensation and employee benefits for staff in their own organisation. From the most junior level of administrator to the top rank of director, compensation and benefits experts are higher paid than those with generalist HR titles who also have some responsibility for managing benefits.

Although the mean salary for respondents overall is £47,946, there is more than a £15,000 difference between the mean salary for men (£59,177) and for women (£43,213). This presents some cause for concern as the very people responsible for ensuring that their organisations are complying with equal pay and sex discrimination legislation are not themselves being treated equally across the profession when it comes to pay. This may be partly due to the fact that it is difficult to benchmark salaries in this field as those with compensation and benefits responsibilities in organisations are few and far between.

One reason for the gender bias towards men in terms of higher salaries is that a larger number of women in our sample occupy the low-to mid-ranking roles of administrator, analyst or manager whether in compensation and benefits or HR generally than men. However, even here they tend to be paid less than men in the same position, apart from the role of HR administrator where the difference may be partly down to the fact that men in this role are significantly outnumbered by women in our sample.

There is also a difference in mean salaries of more than £4,000 between those who are contracted to work full-time (35 hours week or more) and those who work part-time. Although only 8% of respondents work part-time, all of these, except one, are female.

Despite the difference in salary by gender, satisfaction levels between the sexes are similar. The bulk of respondents (54%) to some degree or another are satisfied with their salaries, but almost a third (28%) are not.

A higher percentage of those who work part-time (59%) are satisfied than those who work 35 hours or more each week (53%). The long hours worked by full-timers may have something to do with this as 40% work 43 hours or more a week.

Bonuses

A surprisingly high proportion of respondents – 71% – receive an annual bonus. Of those who do, 86% say the bonus is based to some degree on company performance, while 75% have personal performance as a measure, and 17% team or departmental performance. An unlucky 5% received no payout at all last year.

However, a fifth of those entitled to an annual bonus received between 5% and 9.9% of their annual salary, while almost a third received between 10% and 19.9%.

Only 12% of those in receipt of an annual bonus salary sacrifice all or part of it into a pension provided by an employer, thereby saving on tax and national insurance.

Salary Increases

Unsurprisingly, the bulk (86%) of respondents said they had received a salary review in the past year. Of these, the main reason given was an annual review in an existing job (77%), while 9% said it was due to being given a promotion or new job internally, 5% said it was because they took on new responsibilities internally and 5% said they had one as a consequence of taking a new job externally. A small proportion (2%) had a review at their request.

Of those who had a review in the past 12 months, almost two-fifths (38%) had an increase of between 2-3.9%, while just under a quarter (23%) received an increase of 4-5.9%, and 36% were given a rise of 6% or more. It is therefore interesting to see that only 14% expect an increase of 6% or more in the next 12 months. This may be due to the current uncertain economic climate as well as government pressure to keep pay rises well below the current rate of inflation. Indeed, the bulk of respondents are expecting a pay increase of below the rate of inflation of 4.7% for the year to August, based on the Consumer Prices Index.

Leave

The bulk of respondents who work 35 hours or more a week are given 21-25 days paid leave a year, excluding bank holidays, by their employers. However, a significant proportion (32%) are given 26-30 days paid leave, while a lucky 7% get more than 30 days paid leave a year.

Pensions

The take-up of company pension schemes among employees in general is often a major concern for benefits experts. It is therefore surprising that 11% of those responsible for promoting pension schemes are not active members of these plans. Age may have something to do with this as younger employees tend to be less interested in pensions. Indeed, more than a quarter (26%) of respondents aged less than 26 years have not joined employers’ pension schemes, and 19% of those aged between 26 and 30 years are in the same boat, compared with 13% or less for all other age bands. Income is another factor, as more than 20% of those at administrator level have not signed up to their employer’s pension.

Of the 89% of respondents who have joined their employer’s scheme, more than a third (36%) are active members of a defined benefit (DB) pension scheme.

The bulk of these (80%) are active members of a final salary plan while 14% are in a career average scheme. The most common rate of accrual is 1/60th, taken by half of those respondents who are active members of a DB scheme.

More than half (56%) of those who are active members of their employer’s pension scheme belong to a defined contribution (DC) scheme. Of these, more than half (52%) are members of a group personal pension plan, while 23% are members of a trust-based money purchase plan and a fifth have joined a stakeholder scheme.

Given that the respondents to this survey are responsible for managing all or part of their organisation’s benefits, it is surprising that 5% do not know what type of DC pension they have joined. More than half (56%) of those who are members of their organisation’s DC pension scheme receive employer contributions of between 5% and 9.9%.

When it comes to putting their own hands in their pockets, the majority (66%) of DC members make contributions of between 3% and 7.9%. More than half of those who are active members of their employers’ DC schemes make contributions via salary sacrifice, saving them tax and national insurance (NI) and their employers NI.

Share Schemes

A quarter of all respondents receive shares as part of their remuneration package or through a company share scheme.

Among these respondents, all-employee share schemes seem to be the most widespread, with 39% of respondents receiving shares through a sharesave scheme, 27% through a share incentive plan (Sip) offering free shares, and 16% through a Sip offering paid-for shares.

A significant proportion (26%) of respondents also receive shares through a long-term incentive plan.

The value of shares or options that have been granted as part of a remuneration package and are still held in this way, varies considerably. Almost a tenth of the recipients (7%) claim to have holdings or options worth £40,000 to £59,999, compared with 40% whose stake is worth £4,999 or less.

Company Cars

Almost a third (28%) of respondents receive a company car either as a business or perk driver as part of their reward package.

Of these, 45% claim to have a traditional company car, as opposed to a car allowance. The value of the car received varies depending on the respondent. Almost half (48%) say their car is worth between £20,000 and £29,999, while 22% drive vehicles worth between £30,000 and £39,999.

Almost three-fifths (59%) of those who receive cars are entitled to a car allowance. Of these, 76% have an annual car allowance worth between £5,000 and £9,999

Other Benefits

In addition to company cars, shares, pensions, bonuses and holidays, compensation and benefits experts receive a number of other paid-for benefits fromtheir employers, with life assurance being the most widely provided. These paid-for benefits may be received either as core perks or through flexible benefits schemes. When respondents were asked to pick their three favourite benefits, holidays came out top, followed by bonuses and privatemedical insurance.

A fifth (21%) of respondents have an employer that offers a flexible benefits scheme, and 46% have access to a voluntary benefits schemewhereby they can buy perks at a discount or through salary sacrifice. When it comes to the specific tax-efficient perks on offer, 26% of respondents claim to take advantage of childcare vouchers, 12% bikes for work, 28% payroll giving and 3% mobile phone loans.

Overall, almost 69%of respondents were satisfied to some degree with their benefits packages (excluding salary, but including shares, pension, company car and bonus).

However, 17% expressed a degree of dissatisfaction with their perks.

When quizzed further on their benefits package, only 2%of respondents said theirs was a poor show and 6% that they would prefer cash instead of perks,while a quarter said theirs needed to be more flexible, and 23% said more benefits were needed.

Nevertheless, just over a third (34%) said they valued their package.