Significant salary differences still exist between the sexes in benefits roles, says Debbie Lovewell
Employee Benefits surveyed 621 people responsible for managing benefits in UK organisations for its Employee Benefits Salary Survey 2009.†
Almost 60% were from firms with more than 1,000 staff and 83% were from the private sector.
Reward managers highly valued
The survey showed compensation and benefits experience is highly valued in HR departments, with salary levels for this group higher than those for generalist HR practitioners. This can be attributed to factors such as the complexity of reward and acknowledgement of the function’s business role.
Generalist HR appears a common route to benefits, with 58% of respondents following this path. A route into reward via a different department, such as sales or marketing, was taken by 10% of respondents.
Overall, the mean salary for respondents is £48,436 – a slight rise on last year’s £47,946, despite the tough economic conditions.
But there are still significant differences between the salaries received by men and women.
The mean salary for men (£59,534) is now more than £16,000 above the mean salary for women (£42,988). This is a little concerning because it indicates the people who are responsible for implementing and complying with equal pay and sex discrimination legislation in their organisations are themselves not being treated equally.
A higher proportion of women feel their salary is slightly below average for their role – 47% compared with 35% of men. Men are much more likely to admit their salary is slightly above average for their role.
Salary and Bonuses:
Almost 70% of respondents receive a cash bonus. This widespread use of company performance as a bonus criterion could be a significant factor in respondents failing to earn their full potential bonuses. For example, 15% of respondents did not earn their potential bonus last year. At the other end of the scale, just half of those who could have earned between 31% and 50% of salary in bonus payments actually achieved this. When it comes to spending their bonus, just 8% sacrifice some of it into their pension fund, while 1% sacrifice the whole amount. Sacrificing their bonus in this way has tax and national insurance efficiencies for employees.
Just over half (51%) have had a salary review in the past 12 months, but 41% have not had a salary review in the year because of a pay freeze in their organisation. Just 9% said they had not had a review for another reason. Where respondents had received a pay review, this was most often an annual review within their existing job (78%). Other reasons for a review included a promotion or new job internally (7%), and new responsibilities (7%).†
Pay has been frozen in 26% of respondents’ employers, but 63% said all or almost all salaries had been increased. However, 15% expected their salary to stay the same in the next 12 months, and 9% hedged their bets on what would happen.
Compensation and benefits professionals enjoy a relatively large amount of holiday each year. More than half (56%) receive 25-26 days a year, while 14% are entitled to 27-28 days (excluding bank holidays). Just 12% receive fewer than 25 days a year. But with the function’s often notoriously high workload, it would be interesting to know how many of these days respondents actually manage to take.
Compensation and benefits or reward professionals might be expected to be the ones most likely to sign up to their employer’s pension scheme. After all, it is this group that is often responsible for promoting the pension plan(s), as well as educating other members of staff about the benefits of joining, and the need to make provision for their retirement. So it is surprising that not all our respondents practise what they (or their close colleagues) preach, with 10% failing to join their organisation’s pension scheme.
Affordability may be one reason, because 52% of those that are not active members of a plan are in more junior administrative or analyst roles. But this does not account for the remaining 48% who are at compensation and benefits or HR manager level or above.†
Of the 39% who are still fortunate enough to be active members of a defined benefit (DB) scheme, the vast majority (82%) enjoy final salary benefits. Although this figure has changed little since our 2008 survey, it will be interesting to see whether it alters over the coming year given the numerous reports of DB scheme closures to future accrual that have hit the headlines in recent months.
More than half (59%) of respondents who are active members of their employers’ pension scheme belong to a defined contribution (DC) plan. Of this group, more than half (52%) are members of a group personal pension (GPP) plan, while a quarter belong to a trust-based money purchase plan and 16% to a stakeholder scheme.
It is rather worrying that 5% of respondents claim not to know which type of scheme they belong to, given they are responsible for managing all, or part, of their organisation’s benefits provision. These percentages have changed little since last year’s survey, indicating just how slowly the pensions landscape changes despite the flurry of headlines about DB scheme closures leading to an increased number of DC plans on offer. However, the pensions reforms that are due to come into effect in 2012 are expected to be a catalyst for increasing DC scheme membership.
Employee share schemes:
Just over a quarter (26%) of respondents receive shares from their employer as part of their remuneration package or through an employee share scheme. Among this group, all-employee plans are the most popular way of distributing shares. Overall, the percentage of organisations that offer shares through a sharesave scheme (41%) has changed little year-on-year.
However, the basis on which organisations offer shares through a share incentive plan (Sip) has altered slightly over the past year. Almost 20% now offer free shares through a Sip. Last year, this was the most common way for employers to offer shares through this type of scheme (27% did so).†
This year, matching shares are offered more widely (by 23%). Company share option schemes have also risen slightly in popularity. The value of shares or options that have been granted and are still held by respondents varies considerably.
More than one-third (39%) of respondents are provided with a car or a car allowance as part of their reward package as either a business or perk driver. This is a slight increase on the 28% that said they received the same last year.
A large majority (80%) of respondents who are provided with the perk are at manager or director level, indicating that cars can be a powerful recruitment and retention tool used by employers to incentivise higherranking employees. Of this group, 38% receive a traditional company car rather than a car allowance.
In addition to salary, bonuses, cars, shares and pensions, reward professionals receive a number of other perks paid for by their employer. A quarter of respondents receive perks via a flexible benefits scheme, while 59% have access to voluntary benefits. Overall, just under two-thirds (63%) are satisfied to some extent with their benefits (excluding salary, but inclusive of shares, pension and bonus payments).
A further 19% have no strong feelings either way, but 17% are dissatisfied with their perks in some way. Despite this, a higher percentage of respondents than last year say they value their benefits package (43%) and feel it shows their employer cares about them (19%) – up from 34% and 9%, respectively. It may be the recession has prompted some employees to review their package compared with other organisations, which has boosted their appreciation of what they receive.
Respondents’ biggest gripe concerns the flexibility of benefits packages. More than a third (36%) of respondents would like their package to be more flexible so it can be tailored to suit their needs. The increasing financial pressures on many individuals may also be behind the rise in the percentage who would prefer to receive cash instead of benefits (up from 2% to 6%).