Employers missing an opportunity as staff demand greater financial security

Benefits packages are out of step with the needs of employees who are increasingly risk averse as a result of the recession, according to research from Populus and Economist Intelligence Unit (EIU).

The research found 77 per cent are worried about their financial security and are prioritising long-term financial protection in benefits packages.

But the majority of employers have not reviewed their packages since the financial crisis began in 2008.

The research found 74 per cent of employees could not see an end in sight to the slowdown.

UK workers are looking to their employers to offer more long-term financial security as part of their employee benefits package. Almost two thirds of staff, 62 per cent, see defined pension contributions as the most important benefit, but 60 per cent of UK workers believe that their employer should now offer income protection.

By contrast, ‘soft’ benefits such as gym membership are valued only by a small minority – 26 per cent of UK employees, the research found. 

A majority of employers still have a paternalistic attitude, with 52 per cent of those surveyed saying they have an obligation to look after their staff and aim to reflect that in the benefits packages they offer. And 36 per cent agree that it is typically better for their employees to obtain financial benefits through workplace schemes, rather than on an individual basis.

More than half – 51 per cent saw the anticipated cost of implementing changes as a drawback to reviewing their benefits, while the perceived lack of bottom line benefit was an issue for 34 per cent while excessive bureaucracy was a barrier for 29 per cent of employers.

Peter O’Donnell, chief executive officer of Unum says: “Employers can use their benefits much more effectively than they’re currently doing – if their staff have been educated to fully understand their packages, it can have a huge impact on their brand loyalty and engagement with their employer. Employers need to listen to their staff to work out what they want, and what they need.

“Matching the wants and needs of employees with what you’re providing not only helps employees, it makes commercial sense for the business – and understanding that is the key to a truly modern approach to benefits.” 

Dr Benjamin Reid, senior researcher, The Work Foundation says: “We’re seeing major changes in the way that employees think about their benefits, and we’ve found that even those presumed to be the most footloose and fancy-free in our society are moving towards wanting a much higher level of security from their benefits. They are becoming much more traditional in their approach to benefits – the recession has forced them to think about their finances in a different way.”