Benefits packages still a priority for employers

Despite the pressure on budgets caused by the downturn, more than four employers out of five are continuing to protect staff with competitive health and benefits packages, latest research has suggested.

The study, by insurer Unum and Personnel Today, found that 81% of employers are still providing sick pay above the statutory minimum, with more than two-thirds continuing to pay their employees something for up to one year, although just 12% offer support for longer than that period.

The poll of HR professionals found that 88% of employers rated providing sick pay above statutory entitlement – which is currently £81.60 per week for the first six months – as being either fairly or very important.

Nearly eight out of 10 offered benefits such as death in service or life insurance; more than six out of 10 provided private medical insurance; and more than half still operated a bonus scheme.

Jack McGarry, chief executive of Unum UK, said that with budgets under intense scrutiny, the key was for employers to ensure the choice of benefits on offer was balanced.

“We believe that benefits packages need to be reviewed and rebalanced. Over three-quarters of employers provide death in service/life assurance to their employees. However, employees are three times more likely to be unable to work due to illness or injury than to die during their working lives.

“Despite this, just one employee in 10 is covered by income protection, which pays up to 80% of a sick employee’s salary until they return to work or retire,” he added.

In separate research, Unum has highlighted the damage that being forced to leave work for health reasons can do to family finances.

More than one in four people who leave work for this reason fall into poverty, with 15% of spouses also leaving work within one week.

The Unum-commissioned research, which was carried out by the Institute for Social and Economic Research at the University of Essex, found that 28% of ill or injured people fall into poverty and one-third are living in poverty within a year of leaving work.

Those who leave work for health reasons are less likely to return to work than if unemployed, on average suffer a 25% drop in monthly household income and have a 10% chance of having problems meeting housing payments. It was also associated with a 60% probability of stopping saving.

A survey by XpertHR reveals that there has been no decline in the popularity of benefits and allowances in 2011.

Comments are closed.