Half of employees would sacrifice part of their salary for more personalised employee benefits, according to a new survey.
The report by MetLife UK, which surveyed 1,200 employees and employers, found that 50 per cent of workers would be prepared to accept a reduction in pay for more tailored perks, while three-quarters (74 per cent) of employees said they would work harder for an employer that provided benefits to support individual needs.
Just under four in 10 (39 per cent) workers also reported that if they intended to leave their current role within the next 12 months, having an employer that demonstrated more care for their mental wellbeing would encourage them to stay.
- Will your staff need a pay rise this year?
- Large employers failing to address in-work poverty, think tank finds
- How businesses should manage post-pandemic reward
Additionally, three-quarters (73 per cent) said they would work harder for an employer that cared about their wellbeing,
Samantha Johnson, policy lead at the Chartered Institute of Payroll Professionals (CIPP), said that employees’ needs were now central to reward and recognition strategies, but noted that flexible benefit packages came with “complexities in administration and compliance”.
“It is now central to a payroller's knowledge to understand how to ensure benefits in kind, salary sacrifice and expenses are implemented effectively and correctly”, she commented, adding that taking steps to improve this knowledge would “remove risk” for businesses.
Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter
Meanwhile, the research also found that two-thirds (67 per cent) of employers had begun reviewing their employee benefits package, with a similar proportion (63 per cent) reporting that they had seen an increase in employee queries about benefits since the start of the pandemic.
More than three in five (62 per cent) employees were interested in the ability to shape their benefits package with their employer, and half (48 per cent) reported being in discussions with their employer about benefits.
Almost two-thirds (64 per cent) of employers have been actively promoting their benefits offering since the pandemic as they seek to better understand employees’ needs.
Adrian Matthews, EB director at MetLife UK, said that employees were increasingly valuing a holistic approach to benefits packages following a seismic shift in the way that we work.
“During the pandemic with social venues closed, the ‘softer’ benefits such as gym memberships and Friday drinks became obsolete… more functional benefits such as income protection are proving to be more worthwhile to employees going forward.” he said.
Financial protection was a key motivator for employees, with two-thirds (65 per cent) reporting that they would prefer financial protection over ‘soft’ perks such as gym memberships.
For both employers and employees, pensions were ranked as the most important benefit for the coming year, rated at 7.48 and 7.78 out of 10 respectively (with 10 being of highest importance).
Income protection was rated 7.15 and 7.27 out of 10 for employers and employees respectively, while critical illness insurance scored 6.94 and 6.95 out of 10 respectively.
Having a season ticket loan was thought to be the least important benefit for both groups, rated at 6.27 and 5.61 out of 10 for employers and employees respectively. Having a gym membership was also near the bottom of the list, ranking 13th out of 19 for employers (at 6.78 out of 10) and 18th out of 19 for employees (5.65 out of 10).
Charles Cotton, senior policy adviser on performance and reward at the CIPD, said that there was no ‘one size fits all’ to employee benefits, and those looking to change their offering should start “conducting a review of what they currently offer and speaking to staff about what they value the most”.
“Taking time to invest not just in employee benefits but also in how you provide and communicate these benefits can improve employee retention, engagement and wellbeing so it’s well worth getting right” he said.