Useful benchmarking information on benefits
Over the past two months, customers have increasingly been looking to benchmark their benefits practice with the external labour market.
Their motivation is unclear – it seems there may be a move away from trends in recent years, when organisations were either looking to leverage better value from their benefits, or promote their value to employees because they were restricted in what they could pay in their annual pay review.
Now, it appears people are more concerned that, having not reviewed their benefits for some time, they may now be out of alignment with an increasingly competitive labour market. I, therefore, thought it would be useful to summarise some of the key trends from our benefits market database.
Company cars are seen as a key benefit, particularly for the Construction and Facilities Management sectors; and many organisations have been reviewing their policies in recent months. Of particular interest is the level of seniority a perk (or status) car is provided. Few organisations provide them at more junior levels, other than when there is a job need / requirement. We generally find that perk cars are generally provided at Paydata Levels 10 and above (Career Professionals). Cash alternatives vary significantly, typically between £4,000 and £10,000 per year, dependent on seniority.
Life assurance is an area where organisations are often more generous than the statutory cover, paying lump sum payments at, or in excess of, three times the base salary.
Pension policies appear to be the most inconsistent between organisations; in particular, contribution levels vary significantly from a maximum employer contribution of between four and 15 per cent (dependent on seniority). Practice appears fairly evenly split between providing fixed or variable contribution levels. As you can imagine, defined contribution schemes are the dominant type offered, although this does vary between sectors, often driven by historical practices.
Private medical insurance
Private medical insurance is usually provided, although policy coverage and employee funding very much depends on seniority and sector.
Having provided a Total Reward Statement service for a number of years, we see a myriad of other benefits provided, including dental care, employee assistance programmes, a whole host of allowances (e.g. First Aid), gym membership, childcare vouchers; the list goes on and on.
Our customers often tell us that employees are increasingly looking at their total package, when comparing prospective employers. Consequently, they have to ensure they review, benchmark and communicate their whole package much more frequently.