A growing number of employers are looking to improve their employee benefits, latest research from the Reward & Employee Benefits Association (REBA) reveals.
The organisation's New Model Reward Research 2017 - carried out among 183 pay, reward and benefits specialists working across a variety of organisations and industry sectors - looked at the challenges faced by HR managers over the coming year.
One of the key highlights of the research was the growing demand for employers to increase basic pay - with more than a third of the respondents (36%) agreeing that the national living wage was putting pressure on them to increase their base wage. Additional pressure for increased pay was also coming as a result of the minimum wage (27%), future gender pay reporting (21%) and pension lifetime allowance changes (11%).
However for many, simply increasing salaries during these challenging economic times is not a viable option, and as a result, a growing number of respondents are looking to improve their employee benefits offering, with three quarters (76%) saying there will be an increased focus on employee benefits by 2025.
The respondents also recognised the challenges to employers of having to tailor their rewards offering to a much wider variety of needs as a result of a number generations now working alongside each other in the workforce. Just over a fifth (21%) said they were looking to improve benefits for today's graduates - also known as ‘Generation Z' - with 14% saying they would improve benefits for older workers.
The survey also highlighted that pensions were still high on the agenda for most of the respondents, with an encouraging 90% offering more than the legal minimum contribution to their employees. There was also a huge rise - over 75% - in the demand for pension advice and education on pensions, possibly as a result of the influx of new pension savers created by auto-enrolment and the new freedoms at retirement for those saving into defined contribution (DC) arrangements.
REBA director Debi O'Donovan said: "Changes in legislation, demographic shifts and economic pressures such as the rise in student debt will result in reward strategies shifting over the next 10 years to meet new needs. Our research shows how the increase in agile working and the ageing workforce, for example, mean reward professionals cannot simply keep doing things ticking over. Now is a good time to look forward and reassess whether your reward strategy will support your future HR and business strategies."
The survey was conducted in association with JLT Employee Benefits.
Head of reward & benefits Andrew Drake commented: "It's clear from the research that as a result of the pressure to increase pay, employers are rethinking their approach to reward and benefits, and I think we'll see a shift towards doing more through benefits over the coming years. It is also encouraging to see that a growing number of employers are addressing the emerging demands of an increasingly diverse workforce, and understanding that the days of a ‘one size fits all' benefits solution for employees have long gone.
"If they haven't done already, my advice to employers is to take a step back and rethink the way they approach reward. The current reward model needs revitalising, and there are many ways in which employers can be creative with their benefits and enhance their reward strategy, which will ultimately help to improve productivity and employee retention."
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