Thomsons Online Benefits have today published their annual Employee Rewards Watch report for an incredible ninth year with 76% of respondents rating pension reform as their key benefit challenge for the next twelve months.
Chief Executive Officer of Thomsons Online Benefits, Michael Whitfield, commented:"During the last 30 years, there have been many changes in the world of pensions - some positive, some negative - but no change as significant as the introduction of National Employment Savings Trusts (NEST) and the accompanying application of auto-enrolment. Everyone should prepare themselves for a roller coaster of a pensions ride over the next few years as we respond to the staging dates and then the subsequent phasing dates which occur all the way up to October 2018. Respondents to Employee Rewards Watch this year have given a very clear indication that this issue is very firmly on their radar."
Employee Rewards Watch (ERW) was first launched in 2004. This year some 430 organisations took part making it the UK’s most authoritative benchmark of employee reward and benefits trends and industry practice. Respondents answered a structured series of questions on pensions, salary sacrifice, reward strategy and governance, flexible benefits, health & wellbeing and employee engagement.
Unsurprisingly, 76% of respondents cite changes to pension legislation and regulation as their key benefits strategy challenge, although only 24% are compliant already and 43% won’t be ready until September 2012. Just 19% are already using auto-enrolment to enrol eligible employees into their pension schemes. Affordability (55%) and a lack of understanding (41%) were reported as the main reasons why employees don’t engage with or take up their pension benefits.45% state that controlling employment costs is their top concern yet there is an 18% decrease in companies that can report on their total reward costs and 59% still don’t have a written reward strategy. 51% will look for other cost savings in their businesses as a result of mandatory employer pension contributions although many will look to reduce other benefits (16%) rather than cut headcount (3%) or freeze recruitment (2%).40% of companies now offer flexible benefits schemes with 56% reporting that improved employee engagement is the greatest benefit of implementing flex.62% of organisations are not yet aware of the Government’s healthier workforce pledges and, although 11% provide health and wellbeing benefits primarily to reduce levels of sickness absence, 38% do not know if their absenteeism levels reduced in 2011.
Michael Whitfield, Chief Executive, commented: “When we first started to conduct this survey, we really wanted to make sure that our finger was on the pulse of benefit change. Almost ten years later, those intentions have never been more relevant as we approach compulsory group pension schemes for all, no set retirement age and the dismantling of public sector pensions. In 2012, HR professionals and other Board Room Executives will need access to the most relevant, up to date information on a diverse range of benefit and reward topics and trend changes to help them manage their talent pools even more effectively and appropriately".
Managing Director of Thomsons Online Benefits, Chris Bruce, comments: "It is plain to see from the valuable trend data that ERW and Darwin™ (our benefits technology platform) have now given us access to, that change is the only constant in our lives - both in business and on a personal level. Being responsive to change, having the agility, the insight and the tools to deal with these challenges is vital for the survival of strong customer and employer brands. We will look forward to sharing the results of ERW 2012 with participants and to helping map out robust reward strategies for the future.”