Why employers struggle to match a fair benefits offering with rising costs
UK employers are struggling to bridge the gap between offering a fairer spread of benefits that meets the needs of all employees and rising costs. 71% of employers say they struggle with the rising cost of benefits, according to Gallagher’s 2019 Benefits Strategy and Benchmarking Survey.
The report, which surveyed UK organisations from a wide cross section of industry sectors and company sizes, asked employers how their strategies are evolving to keep pace with changing employee priorities across the spectrum of benefits, including pensions, workplace perks and flexible working.
Despite best intentions, most employers have not increased their flexible and voluntary benefit offerings. Last year, 47% said that they planned to improve flexibility in the provision of benefits, however this year just 22% of companies offer some form of flexible benefits (up slightly from 20% last year). 78% of organisations offer no flexibility, whilst just 5% offer full flexibility. Practical challenges in implementing these changes include negotiating with providers and choosing a delivery method.
Given all the challenges facing employers, more organisations are researching the market, with the number saying they struggled to understand their organisation’s position against the market dropping to 34%, compared with 52% last year. However, just 43% poll their employees and only 27% have a pre-defined communications budget. Of those that do, 85% spend just 10p per employee per month to outline the benefits available to them – limiting the maximum value employees can get from their benefits. Furthermore, 37% find communicating about benefits a challenge.
“Benefits are by no means a silver bullet towards achieving a happy workforce, but employers must adopt a holistic view if they are going to improve retention and engagement of top talent,” says Nick Burns, CEO at Gallagher’s UK Employee Benefits Consulting Division. “It is clear from this report that most organisations know this as the majority of employers who are planning changes to their offering say they are going to enhance benefits in order to build a better workplace.
“With the needs and priorities of employees changing, this report highlights how employers can address their employees’ concerns and balance rising costs in order to face the future with confidence,” he adds.
What challenges keep your peers and competitors up at night? Where do you stand in the competitive landscape? How can you distinguish your organisation as better than the broad market – whilst containing cost? Get a quick read of today’s big trends, so you can face 2020 planning with confidence. Get your 2019 Benefits Strategy & Benchmarking Survey Executive Summary.
This is a sponsored article provided by Gallagher.
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