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Latest NewsPay & benefits

Benefits and allowance schemes still popular with employers

by John Eccleston 13 Jun 2011
by John Eccleston 13 Jun 2011

Employers are set to continue their use of benefits and allowances as a key tool in attracting and retaining employees, with some planning to increase their use in the coming year.

The XpertHR 2011 benefits and allowances survey, which received responses from organisations employing in total almost 600,000 people, polled employers’ current and planned use of benefits and allowances, as well as surveying the most popular forms of benefits.

The key finding of the survey is that, despite uncertain economic conditions, most employers have maintained or increased their pre-recession benefits offerings and continue to provide a wide range of perks to employees.

Further, employers are optimistic as to what benefits they plan to offer for the coming year, with a quarter (26.9%) planning to introduce a new benefit or allowance for employees and only one in 20 (6%) planning to withdraw one. The majority (60.4%) have no changes planned.

According to the survey, childcare vouchers (81.3%) are the perk most widely offered by UK employers, followed by free car parking (77.2%). Employee assistance programmes (69.2%) have overtaken private medical insurance (66.5%) since 2010 as the third most commonly offered employee benefit.

The new benefits most frequently introduced by employers over the past year were childcare vouchers, employee assistance programmes and healthcare cash plans.

The survey also highlighted some differences between the public and private sectors, with a far higher proportion of public sector respondents expecting to change their benefits and allowances offerings over the coming year.

Almost one public sector employer in four (24.2%) plans to reduce a particular benefit compared with fewer than one in 20 (3.9%) of those in the private sector. However, public sector employers are also more likely to be planning to introduce a new benefit than private sector firms, suggesting that many public sector organisations will be looking at their overall benefits offering over the coming year.

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Many of the changes planned are to the menu of options offered through flexible or voluntary benefit schemes, as would be expected. A number of employers are also looking at introducing or adding to salary-sacrifice benefits, particularly cycle-to-work schemes. Dental cover is mentioned by a handful of employers, while one firm is looking into both corporate wraps and wellbeing benefits.

For more information on employee benefits schemes, take a look at our free Buyers’ Guide on the topic.

John Eccleston

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