Pensions, paid holiday above the statutory minimum, extra holiday for long service and flexible working are the most common benefits given to staff either as part of their core benefits package or part of a flexible benefits scheme. They also appear to be more widely offered in the public sector than in the private sector.
When it comes to holiday, not all employers are, on the face of it, complying with the law and providing the minimum statutory entitlement of 24 days’ paid leave. This new minimum holiday entitlement was introduced on 1 October 2007 and is set to increase further to 5.6 weeks from 1 April 2009. If employers include the eight bank holidays a year as part of the 24-day statutory entitlement, then as a minimum, employees should receive an additional 16 days’ paid leave. However, 10% of workers receive less than this. Unsurprisingly, this is most pronounced in businesses with less than 100 employees. Those in receipt of holidays above the statutory minimum may have managed to build up their entitlement by receiving extra holidays for long service, a perk that 39% of employees enjoy.
At least 70% of staff receive 21 days or more paid leave, excluding bank holidays, making this the most commonly-offered benefit overall. The most commonly provided holiday entitlement in the private sector is between 21 and 25 days’ paid leave, excluding bank holidays, where 43% of workers receive this, compared with 32% of those working for a nationalised organisation or public corporation or 25% in some other public sector body and 33% working for a charity or other voluntary body. However, a significantly higher proportion of those working in the public sector receive 26 days or more paid leave than in the private or charity and voluntary sectors.
Aside from paid holiday above the statutory minimum, the second most commonly-offered perk is an occupational pension, received by 53% of employees. More than 60% of employees in the public sector currently receive an occupational pension, compared with 42% in the private sector, and 49% in the charity and voluntary sector. The larger the organisation the more likely staff are to have an occupational pension. Just under a quarter (24%) of workers in organisations with fewer than 100 employees have an occupational pension, compared with more than half of those in organisations with 250 to 999 staff, and more than 70% of those in organisations with more than 1,000 staff. Occupational pensions are more prevalent among the higher paid, with more than 50% of employees earning more than £20,000 in receipt of one.
Of those receiving an occupational pension, 53% say they are members of a final salary or career average defined benefit pension scheme, while 29% claim to be members of a defined contribution pension scheme of some description. However, these figures may not, in fact, represent a true picture of what employers offer. Almost a fifth (18%) of those in receipt of an occupational pension admit that they do not understand what type of scheme they have. More then 60% of employees within the public sector or who work for nationalised or public corporations receive a defined benefit scheme, while only 35% do so in the private sector and 34% of those working for a charity or in the voluntary sector. Due to fears of mounting liabilities, many employers in the private sector have taken steps to close their defined benefit schemes to new joiners, while others have gone further and closed them to future accrual. The government has so far continued to support defined benefit schemes for the public sector.
Flexible working is another key perk, with 37% of employees receiving this. The benefit is more widely available in the public and voluntary sectors, where more than 40% of employees receive it, compared with only 29% in the private sector. It is also more likely to be provided by larger employers with more than 1,000 staff, where over 40% of employees are in receipt of the perk. Other perks that are commonly received by employees include bonuses (23% of employees receive these) and discounts on retailers’ products and leisure activities (22%). Of the standard benefits-type products, life assurance cover (19% of employees receive this), private medical insurance (14%) and employee assistance programmes (EAPs) (19%) all come within the top ten most commonly-provided perks, after holiday.