Three-quarters of employers say they offer pensions to aid staff recruitment and retention, yet only 32% check whether their pension scheme is effective in these areas, according to the Employee Benefits/Axa Pensions Research 2008.
The research, published in August, found that 74% of employers do not measure the return on investment (ROI) on offering an occupational pension at their organisation.
Of the 88 respondents who said their company did measure ROI on pension spend, 53% looked at the impact on staff retention rates, and 35% looked at how it affected recruitment of staff, with the remainder measuring other factors.
“This gap is surprising given that 74% of employers declare that occupational pensions are a valuable retention tool, yet only 17% of employers bother to measure if this is true,” said Amanda Wilkinson, editor of Employee Benefits magazine.
“Equally, 78% of our sample said pensions are valuable for recruitment but just 12% formally check this at their organisation.”
Half of employers (49%) still operate a defined benefit scheme, but many are now closed to new members.
Aon’s 2008 Employer Survey, also published last month, found that just 17% of final salary schemes are open to new members.
June Grant, principal at Aon Consulting said: “With the number of final salary schemes plunging to a record low, they have now become gold dust for the employers who still have them.”
How employers measure ROI on their pension plans
They don’t 74%
Look at retention levels 17%
Look at recruitment data 12%
Plan to start looking at ROI 6%