As 2024 draws to a close, it makes sense to look ahead to what we can expect from 2025.
Mark Jones, Reward and Benefits Partner at pensions, benefits, investment and wealth advisers Isio, believes 2025 will be a significant year for employers, with the Government’s Get Britain Working White Paper and the Employment Rights Bill laying the groundwork for major changes that all those with people, rewards and benefits strategy would do well to prepare for.
Making work better
Central to this is the creation of the new Fair Work Agency, which will consolidate enforcement powers across employment rights.
With stronger powers to investigate and take action, employers face the prospect of more robust inspections and tougher penalties if they fall short. This marks a shift from reactive enforcement in certain areas, where employees were often responsible for raising claims, to a more proactive approach led by regulators.
Jones says: “For employers, the message is clear: get your house in order now, or risk fines, reputational damage, or being named-and-shamed”.
Flexible working no longer in flux
Jones also believes that flexible working will also remain a key area of focus. He says: “This is no longer a nice to have – it’s a key part of any benefits strategy and will be a key bargaining chip in the race for talent in 2025. Getting this right can improve turnover and employee engagement”.
Meanwhile, cost pressures aren’t going anywhere. National Insurance (NI) and minimum wage changes will remain high on the agenda, forcing employers to make tough choices about staff reward. Employers should look at their reward package holistically, maximise use of salary sacrifice schemes (for example, for pension contributions) and may need to look for cost savings in other employee benefits.
Jones suggests that employers should start scenario planning now, looking at how changes in NI might affect their total cost of employment. Reviewing the structure and design of benefits packages, as well as considering where support can be targeted most effectively, will be key to weathering changes.
To wrap up he reminds us: “Those that prepare early will be better positioned to manage costs without compromising their employee value proposition as we move into next year.”
