Reward management survey
The CIPD’s eighteenth reward management survey reveals the UK benefits landscape and highlights the importance of employee financial wellbeing
The CIPD shares five top tips to help employers better communicate the benefits they offer, after Reward Management survey reveals mismatch in expectations.
The CIPD’s latest Reward Management survey reveals that UK employers need to work harder to ensure that low-paid workers have easy access to employee benefits that could help increase their spending power and protect them from poverty.
With 38% of employers planning to increase their spend on benefits in the next year, the CIPD is urging them to make sure it’s money well spent.
A survey of 2,500 employees revealed the fragile state of employee financial wellbeing and found that, for too many people in the UK, work is not a reliable route out of poverty:
With the cost of living rising at a worrying rate, the CIPD is urging employers to do what they can to better support financial wellbeing. Along with paying a fair and liveable wage, providing the right employee benefits – ensuring they are inclusive and accessible – is crucial to helping people escape poverty.
The right benefits can help to offset the 'poverty premium', increase your people’s spending power, and protect them from financial shocks. The good news? 60% of employers say they offer a good benefits package and 38% are planning to increase their benefits budget in the next year. But just 40% of employees say they’re happy with the benefits on offer and only 41% say they are easy to access.
The survey also found that those on the lowest incomes, who could most stand to gain from a strong employee benefits package, are the least likely to know what benefits are on offer and how to access them - resulting in much lower levels of satisfaction with the benefits package.
The CIPD’s research shows that employers offer a wide range of benefits that contribute to making work a more reliable route of poverty – not just tangible ‘in-kind’ perks, but also less tangible benefits such as flexible working and training and development, both of which can help people increase their earning potential.
But those on low incomes appear to have fewer benefits available to them. For example:
Several so-called ‘fringe’ benefits that help offset the cost of housing, travel and childcare can be of particular value to those on the lowest incomes. For example, interest-free loans or subsidies can help people to avoid the ‘poverty premium’ they would otherwise pay if they can’t afford to get the best deals by paying for goods and services upfront.
Relatively few employers offer such benefits currently, but the CIPD’s survey of employers suggests we could see some of these increasing in coming years:
Another important aspect of a benefits package is helping employees to better manage their finances and providing support in times of difficulty. The CIPD’s YouGov survey showed that employees not only value the idea of having a financial wellbeing policy at work, but are also much more likely to be satisfied with their overall benefits package if their employer has such a policy in place:
Although only 18% of employers currently have a financial wellbeing policy in place, 78% say they do offer an employee assistance programme and 41% offer free financial education, guidance, or advice.
Employers already investing in such benefits should consider communicating this as part of a holistic financial wellbeing policy, to help ensure staff know how to access these services and how they could help them. Employers who can’t offer such benefits could instead easily sign-post free and independent advice and guidance, such as that offered by the Money and Pensions Service.
‘Protecting people from in-work poverty goes beyond paying a fair and liveable wage. Employee benefits can make a valuable difference to living standards, but those at most risk of in-work poverty seem to be the least likely to be covered by a financial wellbeing policy or benefits package that meets their needs. Some employers may not even need to introduce new perks – they may just need to work harder to ensure employees know what’s on offer, how it will help them, and how to access existing benefits.’
* Childcare vouchers offer tax savings when paid for through salary sacrifice. These are now being superseded by the Government’s tax-free childcare scheme but are still available for those pre-enrolled in existing schemes before September 2018.
The CIPD’s eighteenth reward management survey reveals the UK benefits landscape and highlights the importance of employee financial wellbeing
As the cost of living continues to rise, employers have a more important role to play than ever before in supporting their employee's financial wellbeing
Welcome to the CIPD’s annual survey exploring health, wellbeing and absence in UK workplaces in partnership with Simplyhealth