82% see cost as key barrier to benefits choice

More than two-thirds (82%) of employers in Europe, the Middle East and Africa (EMEA) cited the increased financial burden on their benefits budget as the key barrier to implementing employee choice programmes.


Its 2014 EMEA Employee choice survey in benefits report, which questioned 636 employers across 17 countries, found that 53% of respondents provide some form of choice in the benefits they offer to their employees.

Choice in benefits is most common among employers in Spain (84%), followed by the UK (74%) and Poland (67%).

In the Middle East, employers are least likely (31%) to offer employees choice, while those in Western Europe are the most likely (60%) to.

Three-quarters (76%) of respondents reported a positive employee response to a benefits programme’s introduction, with Eastern European respondents reporting a 90% satisfaction rate.

More than half (56%) of respondents cited remaining competitive in the market as the most significant driver for offering choice in employees benefits, followed by improving employee engagement (55%) and retaining employees (54%).

The research also found:

  • 65% of respondents said the current economic climate has not affected the design of their benefits plan, while 13% said they have added a greater degree of choice due to the economic climate.
  • 32% of respondents have implemented a benefits choice programme in the last two years, while a further 32% are considering offering some form of choice in the next two years.
  • Almost a quarter of these respondents expect to implement voluntary benefits, while 12% expect to implement a flexible benefits scheme.

David Levey (pictured), senior partner and EuroPac leader of Mercer Marsh Benefits, said: “More and more employers are experiencing the virtues of offering employees a choice of benefits and the potential long-term cost savings to the organisation.

“However, some employers are still deterred by the perceived high cost involved, despite evidence to the contrary. It is up to HR directors to conduct a review of their benefits system to ensure they are not missing out on potential savings.

“We can see from the responses that nearly three-quarters said that offering choice is helping them meet their organisational objectives and a similar number said their employees have responded positively to benefits choice.

“It is therefore no surprise that more than half of the respondents without choice programmes said they will implement one in the next two years.

“Our expectation is that this trend will continue to accelerate, and that we will also see the proportion of smaller organisations providing benefits choice catch up with their larger counterparts.

“Cultural, historical factors and the role of the state have huge influence on how benefits are provided in each country, so a level of difference is to be expected.

“For multinational employers though, the most important consideration is balancing cost management with improving employee engagement.

“As the economy across Europe picks up, attraction and retention of employees is more important than ever and providing a choice of benefits is a proven effective way of achieving this.”