Employers find it challenging to make benefits balance.

Feel the benefit.

UK employers are struggling to bridge the gap between offering a spread of benefits that meets the needs of all employees regardless of level, category or service and rising costs. A survey from Gallagher has found 71 per cent of employers say they struggle with the rising cost of benefits – down from 74 per cent in 2018. 67 per cent say appealing to a diverse workforce with varying preferences is one of their biggest challenges.

Gallagher’s 2019 Benefits Strategy and Benchmarking Survey also says 15 per cent of companies are planning to make changes to their criteria for eligibility to extend the same treatment to all employees in a range of areas. For example 42 per cent of companies are offering shared parental leave on the same basis as maternity leave, up from 35 per cent last year. In 2019, there has also been a trend towards ‘same for all’ annual leave eligibility 52 per cent, up from 46 per cent; and ‘service-related’ 34 per cent, down from 37 per cent.

Despite best intentions, most employers have not increased their flexible and voluntary benefits offering. Last year, 47 per cent said that they planned to improve flexibility in the provision of benefits, however this year just 22 per cent of companies offer some form of flexible benefits (up slightly from 20 per cent last year). Seventy-eight per cent of organisations offer no flexibility, whilst just five per cent offer full flexibility. Practical challenges in implementing these changes include negotiating with providers and choosing a delivery method.

Given all the challenges facing employers, more organisations are researching the market, with the number saying they struggled to understand their organisations position against the market dropping to 34 per cent, compared to 52 per cent last year. However, just 43 per cent poll their employees and only 27 per cent have a pre-defined communications budget. Of those that do, 85 per cent spend just 10p per employee per month to outline the benefits available to them; limiting the maximum value employees can get from their benefits. Thirty-seven per cent find communicating about benefits a challenge.

“Benefits are by no means a silver bullet towards achieving a happy workforce, but employers must adopt a holistic view if they are going to improve retention and engagement of top talent,” said Nick Burns, CEO at Gallagher’s UK employee benefits consulting division. “It is clear from this report that most organisations know this as the majority of employers who are planning changes to their offering say they are going to enhance benefits in order to build a better workplace. With the needs and priorities of employees changing, this report highlights how employers address their employees’ concerns and balance rising costs in order to face the future with confidence.”

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