On the face of it, the higher-than-expected rates of employment, the growth in private sector jobs and recent survey evidence that some employers are struggling to fill specialist vacancies are all indicators that there is still competition for the best staff and that this will intensify once the recovery takes hold.
In these circumstances, employers need to be clear about how they are going to attract talent and how their employment offer can be made distinctive against the background of an ageing and more diverse workforce, which will have to work longer than expected and which, on average, will have a higher risk of developing a work-limiting health problem than ever.
The way employers calibrate their reward packages, for example, will need to adapt to the changing demographic, intergenerational and ‘life course’ needs of the workforce. The temptation for some will be to intensify their efforts to offer flexible benefits packages with almost infinite choices.
However, my sense is that some employers are beginning to rethink this approach, preferring to offer fewer options, but more meaningful and relevant benefits. Also, it seems likely that the increasingly blurred boundary between flex and voluntary benefits will become more important because salary sacrifice is increasingly a feature of both. In part, it seems to me this may be an adverse reaction to what some employers see as a provider-led approach by some suppliers, and a realisation that many employees don’t really care whether a benefit is voluntary or part of a flex package as long it is relevant to them, simple to access and clearly communicated.
So, while flexibility in benefits is here to stay, demand for simplicity, transparency and relevance may define the way the market evolves in the medium term.
Stephen Bevan is director of the Centre for Workforce Effectiveness at The Work Foundation