PP Show 2011: Employee debt to prompt benefit expansion

The next five to ten years will see a “sea level change” in employer benefit provision, according to Buck Consultants head of online and flex Dominic Holmes.

Speaking at the Professional Pensions Show 2011, Holmes said an employee debt crisis would push employers into becoming increasingly concerned with benefit provision.

Pension deficits, housing deficits - including mortgages - and consumer debt that has compiled since the credit crunch will all combine to cause a crisis and bring about an "employee real debt realisation".

Holmes said employers must play a bigger role in alleviating the financial stress on employees to stop it leading to absence and underperformance in their workforce.

"I think we'll see something that helps fundamentally address the employee real debt problem," he said.

"This will be a sea level change in the working environment, but employees and employers cannot do this on their own."

Holmes described auto-enrolment as a "catalyst" but called on the government to offer "a carrot as well as a stick" for those interested in total reward.

He pointed to current trends towards sophisticated packages like flex, total reward, integrated delivery and corporate wraps as growing areas for benefits.

For smaller businesses, Holmes said he expected there to be more bundled offerings available from providers.