More than a third (38%) of respondents are likely to review their organisation’s benefits package at the same time as complying with auto-enrolment legislation, according to research by Aviva.
Its second Working lives report, which surveyed 760 private sector employers, found that, over the next 12 months, 63% of respondents will spend the same amount on employee benefits, while 6% will increase the amount they spend and 17% plan to reduce their spend on benefits.
Among respondents who have not yet auto-enrolled employees, only 7% will reduce the other benefits offered to staff.
The research also found:
- 75% of medium-sized organisations surveyed will either maintain or increase the amount spent on employee benefits.
- 20% of large organisations surveyed plan to reduce the amount spent on employee benefits.
- 42% of respondents have concerns about managing the cost of auto-enrolment.
- Among those that have started planning for auto-enrolment, the most common preparations include examining the specific cost implications (35%), reviewing the existing pension provision (48%), and understanding how to integrate auto-enrolment with the payroll data (36%).
- 57% of those that have begun planning for auto-enrolment have involved a financial adviser in the process.
- 60% of respondents said it is standard practice to seek feedback from employees on the relevance of workplace benefits at least once a year, while 22% of small employer respondents conduct six-monthly reviews. Larger employers were the most likely to carry out annual reviews (49%).
- 62% of respondents said the benefits package is a key part of their annual strategic planning process.
The report also surveyed more than 4,000 private sector employees. Among its employee respondents, it found:
- 37% of respondents plan to opt-out of auto-enrolment, while 28% are undecided.
- 45% of respondents who currently do not take up their employer’s pension scheme said they cannot afford it.
- 19% do not save into a workplace pension because they are repaying debts, while 17% are saving for other things, such as a house or holiday.
John Lawson, head of policy, corporate benefits at Aviva, said: “It is encouraging that, despite concerns about managing the costs of auto-enrolment, some employers are looking at increasing their spending to preserve and enhance their existing workplace benefits packages.
“Offering a range of benefits, including those that are not purely financial, can be crucial to employees’ wellbeing at work.
“When business budgets are stretched, it is can often be cost-effective for employers to look at extending their benefits package, particularly when many are looking for ways to reward their staff without being able to increase their salaries.
“Seeking professional financial advice is a positive move in the right direction, so it is good to see that many large employers have taken this step.
“For businesses which are still considering how best to implement the changes in their organisations, this approach can be an important part of getting the most out of their benefits package, as well as seeking regular feedback from their staff.”