Peter Reilly: Universal benefits trend set to continue in 2014

It is interesting to consider how well the employee benefits market has survived the long recession when considering the state of the benefits market and product take-up.

Peter Reilly

It is also important, when focusing on the future, to consider the extent to which we will see a surge in benefits take-up as employers become more profitable and the labour market tightens. 

The Chartered Institute of Personnel and Development’s Annual survey report 2013, Reward management, published in May 2013, suggests that the 90%:10% pay:benefit split generally continues with any increase in benefit spending, due to cost increases rather than provision improvement.

It would be understandable if organisations have concentrated on pay because this is where staff will have been struggling, with wages falling behind prices. Interestingly, recognising this challenge, half of the survey respondents offered their workforce debt advice counselling, 13% welfare loans and a quarter financial education.

Universal benefits 

For the future, we might expect to see the continuing trend towards universal benefits, with fewer status benefits and their mass customisation. These reward characteristics are part of long-term trends: the reduction in organisational hierarchy and respect for workforce diversity.

Reward practitioners have, for a while, recognised the need to segment their workforce into groups. Personalisation takes that a step forward, made easier by IT advances that simplify benefits management.

The interest in John Lewis Partnership’s reward model suggests that profit-sharing arrangements ought to grow, especially as they are both positive for employee engagement and for cost management.

Similarly, benefits and rewards as a component of employee recognition might be a way of generating interest among younger workers, alongside time off for community activities.

Health-related benefits

Health-related benefits may also see growth. If the state continues to withdraw from health and welfare provision, or at least to cut its reach, employers will be increasingly expected to fill the gap with insurance schemes for aspects of health and job protection.

In a similar vein, there is the question of eldercare: will the increasing number of elderly people and the rising costs of care provision impact on working people in terms of time and money?

Will this drive some innovation in benefits provision? On a more positive note, interest in employee wellbeing, which is good for public relations and business, might lead to greater provision of private services, such as well-person clinics and support such as counselling.

Peter Reilly is director, HR research and consultancy at the Institute for Employment Studies