As employee wellbeing solutions are often (although not always) bundled into employee benefits, this week, two pieces of research that point to trends in employee benefits procurement caught our eye at Make A Difference.
The first refers to data gathered by benefits provider Zest. This suggests that employers in the UK are increasing investment in employee benefits packages as they strive to gain a competitive edge in the race for talent.
The second refers to data gathered by GRiD, the industry body for the group risk protection sector.
Employers boosting benefits to beat competitors’ raising salaries
According to Zest’s research, nearly half (48%) of employers say they have boosted investment in their benefits package over the last 12 months in response to the changes in the economic climate. The research highlights the challenges businesses are facing in today’s competitive job market, with four in ten (42%) businesses grappling with recruiting difficulties.
Increased competition for talent has meant more than a third of employers (36%) now worry they can’t keep up with competitors’ raising salaries and won’t be able to attract or retain the right talent.
However, the research also highlights the shifting priorities amongst prospective employees with many now putting greater weight on workplace flexibility and personalised benefits.
Amidst the aftermath of the pandemic, employees are reconsidering what they really need from their employers. Employers struggling to recruit said that while pay remains an important factor, demand for flexible work terms (48%) is now the biggest factor hindering their recruitment efforts.
This demand from candidates now narrowly beats out salary (46%) as the biggest factor in struggles with hiring talent, closely followed by demands for better employee benefits packages (43%).
Commenting on the findings, Matt Russell, CEO at Zest, said:
“There’s no doubt that it’s an employees’ market out there right now and more than ever employers need to work to understand candidates’ unique needs in the race to recruit, motivate and retain great talent.
“As candidates demand more flexibility in their working lives, employers must rise to that challenge by offering working arrangements and benefits that are also sufficiently flexible and personalised.
“When it comes to benefits, employers should prioritise packages that can be individually tailored. Even the most cost-effective rewards can be incredibly successful if they effectively meets the needs of employees on a personal level.”
44% of employers source employee benefits directly
GRiD’s insights were gathered in January 2023 from 503 HR decision-makers and 1,212 employees working for UK businesses.
They have found that when employee benefits are being put in place or reviewed, 44% of employers source their employee benefits directly – by contacting a provider or supplier themselves. 34% do so by following up on opportunities that are sent to them from providers or suppliers.
Only 26% of employers say they source benefits via an intermediary (or broker/adviser) and 23% via a trade body or federation where a third-party organisation has already vetted the provider.
A quarter (26%) of employers claim that they know about all of the employee benefits available on the market, and a further 43% know about some of the benefits available for employees.
GRiD suggests that this is a concern because a lack of employers’ market knowledge could lead to them potentially missing out on new and emerging services that can support their staff and organisation.
With the employee benefits market changing so rapidly, it is both time-consuming and complex for employers to stay abreast of all developments themselves, especially on top of all their other responsibilities.
Katharine Moxham, spokesperson for GRiD, said:
“Providers in our industry frequently add additional support to their services that really benefit the business, employees and their families. While some employers may be aware of such developments, it is an intermediaries’ responsibility to know what is available and how it may best suit an employer and their staff, and they can point employers in the right direction.”
The research highlights that using an intermediary to source employee benefits has a number of benefits for both the employer and the employee. Although the findings show that larger business do have a greater propensity than SMEs to use an adviser (40% vs. 22%), there is still a huge opportunity for all employers to seek the support of an intermediary to help them source the most appropriate employee benefits. This is particularly true of employee benefits such as group life assurance, group income protection and group critical illness as this market continually enhances added-value support to meet the needs of the business as well as employees.
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