Reward survey: Focus on employee benefits

Only 15% of all UK organisations surveyed have a formal financial wellbeing policy or strategy 

These figures are low given how often financial stress has a negative impact on engagement, absence and performance. It also creates a clear ‘differentiator’ opportunity for employers who do formalise it.

77% of organisations have objectives for their employee benefits package - but 22% have no objectives

Over a fifth of employers are effectively spending on their benefits without a defined purpose, such as improving employee motivation and engagement at work, or raising productivity and business performance – all of which makes return on investment (ROI) conversations and benefits rationalisation much harder. 

Even among employers with benefits objectives, fewer than a third (31%) of them link their benefits to boosting productivity or business performance, suggesting a missed opportunity at a time when improving UK productivity remains a national priority. Even fewer (23%) link it to the associated national priority of improving employee health and wellbeing. Instead, benefits are more commonly aimed at supporting retention (44%), or motivation and engagement (37%). 

Not all employers check if their benefits package objectives are being met

Of those that say there are objectives behind the workplace benefits package, around one in seven (15%) do not then go on to assess their benefits against them, limiting their ability to assess relevance, effectiveness or value for money. Among those that do go on to conduct reviews, only a third (33%) say their benefits fully meet their objectives, something that only one-fifth (20%) of voluntary sector and one-quarter (23%) of public sector employers can also say. 

Larger employers and those with an employee financial wellbeing strategy or policy in place offer a variety of benefits and are more likely to provide benefits around pensions, investments, savings and borrowing

Fifty-seven per cent of large employers offer a workplace pension contribution matching plan, and 54% provide a workplace pension salary-sacrifice plan.

Organisations with a financial wellbeing strategy or policy in place are more likely to offer a workplace pension contribution plan (34%) compared with those without one (13%).

Big gap: Flexible working is seen as a key objective-driver (75%), but only 40% provide it

Among those respondents that have objectives for their benefits package, three-quarters of them say flexible working helps them achieve the key objectives of their benefits package. However, just 40% of all our respondents provide this benefit.

Only 39% of organisations feel a responsibility to signpost employees to financial information/guidance – but this rises to 80% in large private sector organisations

This reluctance to highlight such resources can negatively impact the financial awareness and resilience of UK workers. Part of this reluctance could be that many employers are confused between providing information and guidance, which is not regulated, and advice, which is regulated

Benefits review priorities are shifting beyond cost

While cost is cited as a key factor (42%) when assessing the impact of the benefits package, it is not the only factor. How the current benefits package supports performance and productivity (40%) is almost as important. This is a strong signal that HR can use to reposition benefits reviews as a performance and workforce effectiveness discussion – not just a cost-cutting exercise.