A survey of 2,000 employees and 500 SMEs by leading digital pensions platform Penfold has today revealed that pensions are employers’ most useful talent recruitment and retention tool. Nine in ten employees state that pensions are the benefit that can keep them with their employer (90 per cent) or motivate them to change jobs (89 per cent).
Indeed, no other employee benefit rivals the appeal of pensions according to the UK’s workforce:
• Just two-thirds (66 per cent) stated that generous maternity/paternity leave was crucial
• The same proportion (66 per cent) said health insurance or life insurance (67 per cent)
• 60 per cent said unlimited holiday
• 56 per cent said childcare support
• Just 34 per cent said a gym membership and 66 per cent said work social events
◦ Likely a result of an increase in flexible work policies since 2020, with three quarters (76 per cent) naming remote or flexible working as key
Even financial benefits such as salary advances (65 per cent) and bonus schemes (74 per cent) didn’t challenge the appeal of pensions.
However, despite the value placed on pensions by employees, SME employers continue to prioritise alternative employee benefits:
• 59 per cent of SMEs said that travel assistance (such as subsidising season tickets) was more important than pensions
• 55 per cent prioritised work socials
• 50 per cent prioritised wellbeing support such as workshops and therapy
• 50 per cent ranked salary advances above pensions, while the same proportion also prioritised bonus schemes
These stats clearly show a significant mismatch between the views of employees and employers on the importance of different benefits, and in a challenging jobs market, the value of pensions should not be understated. Given that The World Economic Forum reports that one in five workers plan to quit their roles in 2022 alone as part of the pandemic-induced ‘Great Resignation’, employee engagement (particularly with financial matters) is more important than ever before. If employers are to retain, bolster, and develop their teams, they must prioritise the issue that clearly matters most to employees: pensions.
When asked what level of contribution from their employer would positively impact an employee’s decision to stay with the business, the average answer was 9.5 per cent. Just 5 per cent of employees said an employer contribution of 3-4 per cent would be enough to increase their likelihood of staying with an employer. In contrast, this was the most popular contribution level for SMEs, with 54 per cent saying they offered the minimum employer contribution of 3 per cent under auto-enrolment.
The most popular level of employer contribution (31 per cent) that would retain staff was between 8-10 per cent, while 16 per cent said an employer contribution of between 5-7 per cent would encourage them to stay with their current employer.
“Whilst it is not altogether surprising, we are highly concerned to see such a stark divide between the attitudes of employers and employees towards pensions,” said Chris Eastwood, co-founder at Penfold. “We hope that today’s research sparks conversations across the UK to foster a more cohesive approach towards financial support. The cost-of-living crisis means it is more important than ever that firms are aware and supportive of their team’s financial needs – we urge all employers to assess whether their current pension scheme aligns with short-term economic challenges and long-term financial objectives.”
