The typical benefits package still includes the traditional perks such as enhanced sick pay, life assurance and occupational maternity and paternity pay, supplemented by more affordable options such as salary-sacrifice-based or voluntary benefits, according to the findings from a comprehensive new survey of employee benefits undertaken by pay and HR specialists Incomes Data Research (IDR).
Almost all respondents (94%) improve on statutory sick pay terms for staff with at least a year’s service, while 90% offer life assurance to pension scheme members (and 61% offer life assurance to all staff regardless of pension status), typically at the level of four times salary. Family-friendly benefits are also widespread, with just under two-thirds (64%) enhancing maternity pay after a year and a similar proportion (60%) improving on statutory paternity pay in some way.
‘Some of the most popular benefits are those that can be offered at little or no cost - for example, through salary-sacrifice arrangements,’ explains Louisa Withers, Director at IDR. Under these programmes, staff pay for benefits such as childcare vouchers (83% - although such schemes are now closed to new applicants) or cycle-to-work schemes (67%) from their gross salary, saving on income tax and National Insurance in the process. Similarly, benefits such as free or subsidised car parking (55%) and season ticket loans (half of respondents) can also provide a valued incentive for staff with little outlay required on the part of the employer.
In terms of medical and health-related benefits, around half provide free or subsidised gym membership and a similar proportion offer health screening, while free flu vaccinations are available at around two-fifths of organisations. Just under a third, meanwhile, fund private medical insurance as a workforce-wide benefit, with coverage often expanding to include partners or family members once employees reach manager level.
Despite signs elsewhere that some employers are keen to promote ‘financial wellbeing’, workplace saving schemes such as save as you earn (SAYE), workplace ISAs and share incentive plans (SIPs) are among the least prevalent employee benefits. ‘However, we may see this change in the wake of an enhanced focus on employees’ monetary welfare,’ says Withers.
With the advent of auto-enrolment, most employees are now eligible for membership of a pension scheme. Defined benefit (DC) schemes predominate: defined benefit pension schemes are offered by only 18% of the sample and are now largely confined to the public sector.
The report also looks at working hours and annual leave. Across the sample, contracts are most commonly for 37.5 hours a week, although there are variations by sector: contracted weekly hours are highest in private services and manufacturing and lowest in the public sector. Holiday provisions in the public sector are generally the highest, while many private services firms have holiday provisions much closer to the statutory minimum level of 5.6 weeks or 28 days.
The information was collected by a survey conducted by IDR between November 2018 and January 2019. The survey gathered information from 169 organisations within the UK across a wide range of sectors, together employing more than 1.4 million staff. We also include other relevant information from IDR research with employers conducted throughout the year.
The results are published in the IDR Benefits Handbook, which is designed to help identify typical benefits practice in each of the four main sectors of the economy: manufacturing and primary; not-for-profit; private services; public sector.
The benefits covered include the key core benefits of holiday, maternity and paternity provisions and pensions, as well as other benefits commonly offered by employers as extra incentives as a means of promoting employee satisfaction and wellbeing and, in a wider sense, helping recruitment and retention.
The information provided outlines the prevalence of each benefit by sector, as well as analysis of the monetary value of the benefit where data permits.
For more information, please contact Louisa Withers, Director, on email@example.com or on 01702 669549.