Pension costs are bigger concern for employers than attraction and retention

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Ensuring employee motivation through benefits is now a greater concern for employers than the attraction and retention of staff.

This is according to a survey by the Chartered Institute of Personnel and Development (CIPD), which found that the top reward-related worries for employers were workers not appreciating, and not engaging with, their pay and benefits packages.

While attracting staff was the biggest concern for reward practitioners in 2010, it slipped down to ninth place in 2011 and to 11th place this year.

Retention followed suit, slipping from sixth to 10th place in 2011 and then to 12th place in 2012.

The survey of 5,000 senior reward practitioners also found that the increasing cost of pensions had become a top 10 concern for the first time since the CIPD began the survey two years ago, most likely because of the introduction of auto-enrolment, which began for the largest UK employers this month.

Charles Cotton, rewards adviser at the CIPD, warned that employers should not forget the important role benefits can play in attracting and retaining skilled workers.

“Even in a stagnant labour market, key talent can find opportunities to move onward, so reward professionals shouldn’t be too complacent while they wait for the economy to eventually pick up,” he added.

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Top 10 concerns of reward professionals


1. Employees don’t appreciate value of total reward offering.

2. Reward not engaging employees.

3. Unable to increase pay levels due to budget constraints.

4. Employees don’t understand performance and behaviour requirement.

5. Incentives not motivating.

6. Inability to change reward practices quickly.

7. Inability to communicate desired performance and behaviours.

8. Reward is not perceived as fair.

9. Line managers have poor understanding of reward.

10. Increasing pensions costs.

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