As former chairman of the Pension Protection Fund, I was particularly concerned about initiatives that make it easier for small and medium-sized enterprises to get their employees auto-enrolled in pension schemes.
After discovering the gaps that exist between what employees and employers actually think about auto-enrolment and pensions, I was interested in learning more about employers’ perceptions of the total benefits packages currently being offered to their employees. If benefits are key to attracting and retaining staff, the question now is: are businesses meeting the needs of their employees?
The answer lies in a study by Hibob – a fintech company providing a cloud-based HR and benefits platform, of which I am chairman. Entitled Powerful Perks – What People Really Want, the study undertook in-depth analysis of 4,000 employees and 500 employers, asking them which benefits they believe employees actually want to see in their employment package.
Surprisingly, the results revealed significant differences in what employers think their employees want, and what those employees actually want.
With UK businesses spending approximately £40bn on employee benefits each year, it is disappointing to find that many staff are not using these benefits. In fact, only one in three employees make regular use of their benefits. This suggests that the benefits being offered are neither accessible nor relevant. Employers seem to be spending money on benefits that are adding little – if any – value to many of their staff.
However, although many employees are not making use of their benefits package while in work, it is something they find very important in their process of job selection. Forty-one per cent of employees who took part in the study said their benefits package was important when choosing their employer, and the importance placed on benefits in job selection increased with income. Fifty-three per cent of those earning £20-30k said benefits were important when choosing a job, rising to 69-72 per cent for those earning £40k and above.
Now more than ever, people have the ability to work remotely, and the demand for this is clearly high. Unsurprisingly, this was the highest rated benefit in Hibob’s study, with 43 per cent of those surveyed indicating they would want this as part of their package.
Peace of mind benefits, including pension, life insurance, private medical insurance, critical illness protection and travel insurance, were also important benefits according to those who took part.
As former chairman of the Pension Protection Fund, I was of course pleased to learn that employees would allocate the majority of a hypothetical budget to their pensions, and that people are aware of the importance of saving now, in preparation for their later life.
Benefits are an opportunity to offer employees a sense of belonging and support, fostered by an inclusive workforce they wouldn’t want to leave. The culture of the company is also particularly important to retention. Praise and strong networks are significant but cost nothing – so if nurtured properly, they are both cost-effective to employers and valuable to employees.
Companies that get this right by taking the time to learn and understand what their employees really need and want will get their own important benefit. They will be able to attract and retain their best, brightest and most committed employees, who will help build their business for the future.
Lady Barbara Judge is chairman of Hibob