Reward and benefits research: Suited and rooted

The IFF Research Attitudes to Work study demonstrates that, irrespective of sector, neither pay and bonuses nor working hours and flexibility are considered to be as important as job security in the current tough economic climate.

The survey of 472 workers, published exclusively in Personnel Today, offers an intriguing insight into how attitudes to benefits differ between the public and private sectors.

Pay and financial reward, including bonuses and benefits, are more important to private sector employees than to those in the public sector (63% say it is ‘very important’, compared with 46% in the public sector). And when it comes to choosing a job, one-third of private sector workers (32%) say that the overall financial package offered, including pay and benefits, is ‘very important’, compared with one-fifth (21%) in the public sector.

Public v private sector: stick or twist?

Employees in the public and private sectors were asked if they found the prospect of working in the other sector attractive, and why. Here are some of their answers:

You are currently working in the public sector, but would you move to the private sector?

  • “No – because of the uncertainty in these economic times.”

  • “No – there is less job security, the pay is not as good, there is not as much holiday, the hours are longer and there is too much stress.”

  • “No – there is too much pressure and no training given in the private sector, and no financial support.”

  • “No – because you get a good pension in the public sector.”

  • “Yes – the rate of pay is higher in the private sector, the benefits are better, as well as the choice of hours, the pension scheme, the bonuses. You can earn more. ”

  • “Yes – you might get more opportunity for promotion, a better salary, and a more stable work routine.”

You are currently working in the private sector, but would you move to the public sector?

  • “No – the public sector would never match my pay.”

  • “No – there’s not enough money.”

  • “Yes – I feel people in the public sector are looked after better and have more job security.”

  • “Yes – I think the public sector offers just a bit more security, more benefits, and a better pension scheme.”

  • “Yes – there is more flexitime, more holidays, more benefits, and more training.”

  • “Yes – because I do not get any sick leave in my current job.”


While there is little difference between the levels of satisfaction reported by employees in the public and private sector, public sector workers are more likely to describe themselves as either ‘a bit’ or ‘much worse off’ than those in the private sector (45% of public sector workers say this, compared with 33% in the private sector).

Public sector workers are much more satisfied with the amount of holiday they get (68% are ‘very satisfied’, compared with 42% in the private sector). They’re also more likely to believe themselves to be ‘a lot better off’ than private sector employees in this respect (29% of public sector workers said this, compared with 12% of private sector workers). However, holiday is seen as similarly important by both sectors.

Public sector workers place more importance on the hours that they work and the opportunities to change the way they work (43% say it is very important, compared with 32% in the private sector). Despite this, the public and private sectors share similar levels of satisfaction with their hours (40% of public sector workers are ‘very satisfied’ compared with 36% in the private sector).

So which benefits are becoming more important to employees, and why?

Changing priorities

“Research IFF has undertaken over the past 15 to 20 years indicates that, for graduates in particular and for the wider working population, there has been a shifting hierarchy in terms of benefits and their appeal,” says associate director Mark Samuel.

“Through the boom years of the 1990s and 2000s, pay and financial remuneration came to be taken as a given: employees barely gave a thought to these factors, which they simply could not imagine not meeting their expectations and requirements. Of greater stated importance were prospects for promotion and career progression in general, with an increased focus on peripheral ‘nice-to-have’ benefits such as gym membership, first-class business travel, a range of on-site personal services or an expense account.

“As the boom times have come to an end, and graduates are less able to pick and choose, we now see that the ‘nice-to-have’ benefits are disappearing from packages as they become less important as a deal-breaker for firms and less appealing to prospective employees.”

It seems job security has trumped these benefits. “Today, simply being able to get and keep a job is the key concern for many prospective employees,” adds Samuel. “Some are willing to sell themselves short simply to get a job, while others put much greater emphasis on job security than in the past and see flexible working as a potential indicator of a company that takes a more flexible, longer-term view, showing greater trust in its staff.”

The factors that are most important to workers in both the public and private sector – a good atmosphere in the workplace and job security – are those it is most difficult to engender in an organisation, and almost impossible to incorporate into a benefits package. Nevertheless, the evidence suggests that pay and bonuses play more of a role in the private sector, while working hours, flexible working and training opportunities are more important in the public sector – useful information for HR professionals tasked with developing effective reward and benefits policies.

Looking at existing benefits, occupational pension scheme membership is virtually a given for public sector workers, while private health insurance is widely enjoyed by private sector workers, and in particular, management. It would be difficult to omit such items, particularly for more senior-level appointments, and Samuel says employers have been slow to reduce benefits, despite the need to make cost savings.

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Impact of recession

“Compared to previous downturns, employers are taking less of a ‘slash and burn’ approach to their workforce during this recession, as they are much more mindful of the need to prepare for the economic upturn and respond quickly and competitively as markets improve,” he says.

“This has led to a preference, particularly among professional services firms trading on the quality of their staff, for offering staff unpaid leave and shorter working weeks rather than make them redundant. One side effect of this is that older workers are being kept on rather than eased into retirement, as in previous recessions. This in turn offers fewer opportunities for young people to enter the jobs market.”

Official statistics confirm this, indicating a shift in the balance of the employed from full-time to part-time and increasing joblessness among the young.

“Pay and bonuses and career progression are now much less of a priority for young and graduate employees than they were two years ago,” says Samuel. “Some are willing to sell themselves short simply to get a job. Again, this has an effect on benefits packages, as those items generally geared towards the young, such as gym membership or ‘duvet days’, are disappearing.”

The impact of the downturn on workers’ attitudes to benefits will depend largely on the length and severity of the recession. This is evident already in financial services, as the banking sector appears to have got over the worst of the recession, with plenty of ‘big bonuses are back’ stories in the media.

However, times of hardship tend to stick in the mind and have a long-term impact on people’s views, argues Samuel. “The influence of the period of post-war austerity can still be seen in baby boomers today. Outside the banking sector, it is likely that there will be greater emphasis on job security as the UK emerges from recession, rather than on the kinds of generous benefits packages that characterised the boom period when people were prepared to change job fairly frequently for better pay, reward, responsibility and prestige.”

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