Maximising value from employee benefits
Research* by Isio and YouGov, who surveyed over 7,000 private sector employees, has found that employers across the country could be spending up to £15bn a year on employee benefits that don’t resonate with their staff.
The findings show that there is a strong correlation between relevant benefit provision and employee retention, meaning getting this wrong is expensive, especially in the current labour market. Ethnic minorities were most dissatisfied, evidencing a need for a more inclusive approach to benefit design.
Of those surveyed, just 23% felt their current package met all their needs, with levels of satisfaction highest amongst older, married homeowners of White ethnicity. Satisfaction levels dropped to 16% and 15% respectively for Asian and Black respondents. This means that three quarters (77%) of employees believe their benefits do not fully meet their needs. Those who are unhappiest with their benefits package often have needs that aren’t being met through their employer, such as a need for help with debt management.
The findings also reflect current struggles with the cost of living, with more than half (56%) of respondents admitting that they felt negatively about their imminent financial future and 79% of respondents making spending reductions in the first half of 2023.
Employer support within the benefits package makes a real and meaningful difference; people who felt their benefits package met their needs were 62% less likely to have made cutbacks to their spending, such as shopping essentials and utility bills, over the first half of 2023 than their less satisfied colleagues.
*In conjunction with YouGov, Isio surveyed 7,674 private sector employees in June 2023 on a range of issues surrounding employee benefits and personal finance concerns. Responses for don’t know or prefer not to say answers have been removed, unless explicitly shown.
Jonathan Gilbey, Director, Isio Reading, Reward and Benefits comments “It is not surprising that people who are older, married, homeowners and White are happiest with their employee benefits package. While a lack of inclusiveness in benefits design was unintentional, they are the people who traditional benefits packages were perhaps created by and for. It is clear we need change.
“There is an opportunity now for employers to reshape benefits packages so that they resonate not just with their current workforce but future employees. Those that don’t take up this opportunity will be losing vast amounts of money each year on unwanted benefits.
“It’s encouraging to see financial education high on the agenda for all demographics and also to see the demand for benefits which directly tackle the cost-of-living challenges so many people currently face. If employers can target benefits more specifically on the things that their employees actually want, they have a real opportunity to improve inclusivity, remove wastage and benefit from greater talent retention.”
For further insights on how to make the most of your reward and benefits, read the full series here.
Contact
Jonathan Gilbey
Isio Reading
[email protected]
+44 7788141619
Isio provide companies, trustees and individuals with the highest levels of expertise across our core pensions business, which includes Actuarial & Consulting and Pensions Administration, as well as our complementary services: Investment Advisory, Reward & Benefits and Wealth Planning.
