Salary sacrifice arrangements
More than three-quarters (78%) of respondents offer benefits to all staff via a salary sacrifice arrangement, according to the Employee Benefits/Xerox HR Services Benefits research 2016, which surveyed a total of 338 respondents in May 2016. This is six percentage points lower than the 84% of respondents that reported offering benefits through this type of arrangement in the Employee Benefits Benefits research 2014, published in May 2014.
Just 7% of respondents offer benefits through salary sacrifice arrangements to some staff, compared to 6% in 2014. The proportion of respondents that do not offer any workplace benefits through salary sacrifice has increased from 10% in 2014 to 15% in 2016.
There have been rumblings about the future of salary sacrifice arrangements for some time. The government expressed its concern at the growth of salary sacrifice arrangements in November 2015’s Spending review and autumn statement 2015 policy paper, and subsequently set out its intentions to limit the benefits that can be offered via such arrangements in the March 2016 Budget documentation.
Although the government has confirmed that pension contributions, childcare and health-related benefits, such as bikes for work, will continue to attract relief on tax and national insurance contributions (NICs) when offered via salary sacrifice arrangements, uncertainty remains around the scope of the proposed limits and the benefits these will affect.
Since the introduction of the national living wage for employees aged 25 and over in April 2016, employers must also ensure that salary sacrifice arrangements do not take the pay of these staff members below the newly implemented statutory rate of £7.20 an hour.
The proportion of respondents that offer benefits through a salary sacrifice arrangement
To all staff: 78%
They do not: 15%
To some staff: 7%
Sample: All respondents (219)
Childcare vouchers are the most popular tax-efficient benefit offered by respondents’ organisations (92%). The government’s tax-free childcare scheme, aimed at replacing childcare vouchers, will be phased in from 2017, with the current scheme remaining open until April 2018 to support the transition between the two.
Those benefits exempt from the government’s plans to limit salary sacrifice arrangements, such as pensions contributions (72%) and health-related benefits, including bikes for work (78%), also feature in the top three tax-efficient benefits offered by respondents via a salary sacrifice arrangement. Meanwhile, more than a third of respondents provide holiday trading (36%) and give-as-you-earn and payroll giving (37%) in this manner, and 17% offer car salary sacrifice schemes for staff.
The tax-efficient benefits offered by respondents via a salary sacrifice arrangement, either on a voluntary basis or through flexible benefits
Childcare vouchers: 93%
Bikes-for-work scheme: 78%
Pension contributions: 72%
Give-as-you-earn/payroll giving: 37%
Holiday trading: 36%
Health screening: 25%
Gym membership: 22%
Cars: 17%
Mobile phones: 10%
Group income protection: 10%
Car parking: 7%
Subscriptions (professional bodies): 4%
Training courses: 3%
Subscriptions (publications): 1%
Sample: All respondents that offer benefits through a salary sacrifice arrangement (184)
Do respondents’ organisations enable staff to contribute into their defined contribution (DC) pension via a salary sacrifice arrangement?
Yes: 74%
No: 26%
Sample: All respondents (216)
Company cars
Almost half (45%) of respondents offer a car allowance. Of this group, 95% do so a core benefit for some staff and 2% as a core benefit for all staff, according to the Employee Benefits/Xerox HR Services Benefits research 2016, which surveyed a total of 338 respondents in May 2016.
Less than a third (31%) of respondents provide a car through outright purchase, contract hire or leasing, 7% do so through a personal contract plan or employee car ownership scheme, and 6% offer access to an all-employee car ownership scheme or affinity plan.
The car benefits offered by respondents’ organisations and the basis on which they are offered
Company car through outright purchase, contract hire or leasing: Total: 31%; Core – all staff 9%; Core – some staff: 89%; Flexible benefit: 5%; Voluntary benefit: 0%
Company car through personal contract plan or employee car ownership scheme: Total: 7%; Core – all staff 13%: Core – some staff: 69% Flexible benefit: 6%%; Voluntary benefit: 13%
Access to an all-employee car ownership scheme/affinity plan: Total: 6%; Core – all staff 31%: Core -some staff: 8% Flexible benefit: 31%%; Voluntary benefit: 39%
Car allowance: Total: 45%; Core – all staff 2%: Core – some staff: 95% Flexible benefit: 3%; Voluntary benefit: 1%
Fuel for private use: Total: 13%; Core – all staff 11%: Core – some staff: 86% Flexible benefit: 7%; Voluntary benefit: 4%
Motor breakdown cover: Total: 7%; Core – all staff 15%: Core – some staff: 62% Flexible benefit: 23%; Voluntary benefit: 0%
Car parking: Total: 29%; Core – all staff 76%; Core – some staff: 15% Flexible benefit: 2%; Voluntary benefit: 7%
None of the above: 32%
Sample: All respondents (218)
Group risk
A large proportion of respondents (84%) offer employees life assurance or death-in-service benefits, according to the Employee Benefits/Xerox HR Services Benefits research 2016, which surveyed a total of 338 respondents in May 2016. Some 87% of those which offer this include it among their core benefits package for all staff, slightly higher than in 2014, when Employee Benefits’ Benefits research 2014, published in May 2014, found that 77% of respondents provide life assurance or death in service as a core benefit for all.
Fewer respondents (28%) provide life assurance to employees’ dependants and partners. Unsurprisingly, this is the same across group risk benefits; 30% offer personal accident insurance to staff and 12% to their partners and dependants, and 36% offer critical illness cover to employees, while 22% of respondents’ organisations make it available to employees’ partners and dependants. For those respondents that do provide coverage to dependants and partners, the most popular form of doing so is as a flexible benefit; 58% for critical illness, 50% for personal accident insurance, and 42% for life assurance.
Meanwhile, more than half (53%) provide income protection or permanent health insurance, 60% of which include this in their core offering to all staff and 36% as a core benefit for some staff.
The group risk benefits offered by respondents’ organisations and the basis on which they are offered
Life assurance/death in service: Total: 84%; Core – all staff 87%; Core – some staff: 13%; Flexible benefit: 6%; Voluntary benefit: 2%
Income protection/permanent health insurance: Total: 53%; Core – all staff 60%; Core -some staff: 36%; Flexible benefit: 4%; Voluntary benefit: 4%
Critical illness insurance: Total: 36%; Core – all staff 32%; Core -some staff: 14%; Flexible benefit: 41%; Voluntary benefit: 19%
Personal accident insurance: Total: 30%; Core – all staff 53%; Core – some staff: 17%; Flexible benefit: 22%; Voluntary benefit: 15%
Life assurance for partners and dependants: Total: 28%; Core – all staff 32%; Core – some staff: 12%; Flexible benefit: 42%; Voluntary benefit: 19%
Critical illness for partners and dependants: Total: 22%; Core – all staff 16%; Core – some staff: 2%; Flexible benefit: 58%; Voluntary benefit: 29%
Personal accident insurance for partners and dependants: Total: 12%; Core – all staff 25%; Core –some staff: 4%; Flexible benefit: 50%; Voluntary benefit: 29%
Rehabilitation benefits: Total: 5%; Core – all staff 80%; Core – some staff: 0%; Flexible benefit: 10%; Voluntary benefit: 10%
None of the above: 12%
Sample: All respondents (207)
Health and wellbeing
More than two-thirds (68%) of respondents offer access to counselling services or an employee assistance programme (EAP), the majority of which include this within their core benefits provision for all staff (93%), according to the Employee Benefits/Xerox HR Services Benefits research 2016, which surveyed a total of 338 respondents in May 2016.
Private medical insurance (PMI) is also a staple among many employers’ benefits packages, with 71% providing this for employees and 62% also providing it to employees’ partners and dependants. More than a third (35%) give employees access to a health cash plan, 42% of which offer it as a core benefits to all staff. Meanwhile, 28% of respondents offer this to employees’ partners and dependants, although the main means of doing so are as a flexible (35%) or voluntary benefit (44%).
Fitness schemes also feature in respondents’ benefits programmes, with 41% offering gym membership to staff and 26% running on-site fitness classes. While wearable technology continues to rise in popularity on an individual basis, it is yet to become a prominent fixture in employee health and wellbeing programmes, with just 8% of respondents offering it as a benefit.
The top five health and wellbeing benefits offered by respondents’ organisations and the basis on which they are offered
Private medical insurance (PMI) for employee: Total: 71%; Core – all staff 54%; Core – some staff: 41%; Flexible benefit: 8%; Voluntary benefit: 6%
Counselling/Employee assistance programmes (EAPs): Total: 68%; Core – all staff 93%; Core – some staff: 2%; Flexible benefit: 2%; Voluntary benefit: 4%
Private medical insurance (PMI) for partners and dependants: Total: 62%; Core – all staff 30%; Core – some staff: 39%; Flexible benefit: 24%; Voluntary benefit: 20%
Health screening: Total: 50%; Core – all staff 42%; Core – some staff: 36%; Flexible benefit: 22%; Voluntary benefit: 14%
On-site wellbeing events: Total: 47%; Core – all staff 84%; Core – some staff: 5%; Flexible benefit: 2%; Voluntary benefit: 11%
Sample: All respondents (204)
As we become ever-more digitally linked in and increasingly accustomed to searching for information at the touch of the button, whether through mobile devices while on the go or via laptops and PCs, it is perhaps not unexpected that employers are turning to digital means to provide wellbeing education and support for staff.
Almost half (49%) of respondents offer digital content on mental wellbeing, 42% on physical wellbeing, and 41% on financial wellness, according to the Employee Benefits/Xerox HR Services Benefits research 2016, which surveyed a total of 338 respondents in May 2016. In addition, around a third offer digital content support on community and social wellbeing (35%), and 31% offer job satisfaction or career wellbeing support in this way.
In comparison, while more than a third (34%) use printed materials to offer education and support on mental wellbeing, less than a third provide support on other wellbeing topics via this channel.
However, face-to-face communication remains a popular method for delivering wellbeing education and support, particularly around physical (42%) and mental wellbeing (42%).
The wellbeing/education support respondents’ organisations offer employees
Physical wellbeing: Face-to-face: 42%; Digital content: 42%; Printed material 31%: Other 12%; Do not offer: 27%
Mental wellbeing: Face-to-face: 42%; Digital content: 49%; Printed material 34%: Other 11%; Do not offer: 25%
Financial wellbeing: Face-to-face: 30%; Digital content: 41%; Printed material 28%: Other 11%; Do not offer: 33%
Community/social wellbeing: Face-to-face: 22%; Digital content: 35%; Printed material 20%: Other 11%; Do not offer: 45%
Job satisfaction/career wellbeing: Face-to-face: 32%; Digital content: 31%; Printed material 19%: Other 8%; Do not offer: 43%
Sample: All respondents (Checking: 218)
Personal insurance
More than a third (34%) of respondents include travel insurance in their employee benefits package, according to the Employee Benefits/Xerox HR Services Benefits research 2016, which surveyed a total of 338 respondents in May 2016. A fifth (22%) of those that offer travel insurance to staff do so on a voluntary basis, and 34% include it within their flexible benefits package. Both of these figures are higher than in 2014, when, the Employee Benefits Benefits research 2014, published in May 2014, found that 18% of respondents provided travel insurance as a voluntary benefit and 13% offered it as a flexible benefit.
Meanwhile, less than one in 10 respondents offer employees access to motor (9%), house (8%) or pet insurance (5%), and there seems little appetite among employers to increase their focus on such personal insurance benefits, with less than 2% of respondents planning on introducing one of these as benefits in the future.
The personal insurance benefits offered by respondents’ organisations and the basis on which they are offered
Travel insurance: Total: 35%; Core – all staff 38%; Core – some staff: 7%; Flexible benefit: 34%; Voluntary benefit: 22%
Motor insurance: Total: 9%; Core – all staff 41%; Core – some staff: 18%; Flexible benefit: 6%; Voluntary benefit: 41%
House insurance: Total: 8%; Core – all staff 43%; Core – some staff: 7%; Flexible benefit: 7%; Voluntary benefit: 50%
Pet insurance: Total: 5%; Core – all staff 30%; Core – some staff: 10%; Flexible benefit: 0%; Voluntary benefit: 60%
None of the above: 63%
Sample: All respondents (199)
Lifestyle benefits
More than half (54%) of respondents offer flexible-working initiatives, according to the Employee Benefits/Xerox HR Services Benefits research 2016, which surveyed a total of 338 respondents in May 2016. Among the other lifestyle benefits offered by respondents’ organisations, 48% provide additional annual leave for life events or in recognition of long service, and 31% offer enhanced parental leave. However, just 11% of respondents offer emergency childcare, 8% provide emergency eldercare support, and only 1% of respondents provide non-emergency eldercare.
Discounts and offers are also a popular feature in employers’ benefit offerings, with 41% of respondents giving staff access to retail and leisure discounts, 28% to retail and leisure vouchers, and a third (34%) offering dining cards. The number of respondents that include these benefits in their core benefits package for all staff has risen over the last two years; the Employee Benefits Benefits research 2014, published in May 2014, found that 26% of respondents provided retail and leisure discounts as a core benefit for all staff, and even fewer offered retail and leisure vouchers (11%) or dining cards (7%) as a core benefit for the whole workforce. This could perhaps reflect the growing popularity of benefits that can be used on a day-to-day basis, providing visible savings to staff while costing employers relatively little.
The top five lifestyle benefits offered by respondents’ organisations and the basis on which they are offered
Flexible-working initiatives: Total: 54%; Core – all staff 80%; Core – some staff: 15%; Flexible benefit: 1%; Voluntary benefit: 6%
Extra holidays for long service or life event: Total: 48%; Core – all staff 79%; Core – some staff: 17%; Flexible benefit: 4%; Voluntary benefit: 2%
Retail or leisure discounts: Total: 41%; Core – all staff 70%; Core – some staff: 6%; Flexible benefit: 6%; Voluntary benefit: 21%
Dining cards: Total: 34%; Core – all staff 44%; Core – some staff: 4%; Flexible benefit: 22%; Voluntary benefit: 32%
Enhanced parental leave: Total: 31%; Core – all staff 85%; Core – some staff: 12%; Flexible benefit: 2%; Voluntary benefit: 2%
Sample: All respondents (200)
