Investment in employee benefits is increasing despite pressure on businesses, new research has revealed.
The Benefits Design Research 2023: Adapting to external and internal business change report from Howden Employee Benefits and Reward & Employee Benefits Association (REBA) discovered that nearly three-quarters (64%) of employers intend to boost their benefits funding.
The study further found that 15% believe their benefits technology is at a desirable level, with 60% planning to introduce new wellbeing and benefits technology within two years.
In terms of benefits strategies, the majority (89%) of those surveyed believe theirs is highly or somewhat effective in supporting talent goals, while 86% say they are good at supporting the company’s wider culture. A total of 84% said their strategy helped the company address talent shortages, and 85% believe they are a useful talent retention tool.
However, almost one in three employers think their benefits strategy isn’t effective when it comes to supporting equity, diversity and inclusion.
Matthew Gregson, executive director at Howden Employee Benefits & Wellbeing said: “In the past three years, we have seen a seismic shift in the approach to employee benefits. Over half of respondents have reviewed their benefits despite economic and salary pressures, with the biggest changes to programmes being improved funding.
“Two-thirds will have addressed health and protection gaps in the five years 2020 to 2024, whilst nearly six out of 10 will have improved benefits for lower grades.
“However, for all positive efforts made by reward teams in the past three years, certain elements of their offer are still falling behind, especially in terms of communications and technology – which together make up how employees ‘experience’ their benefits. This can correlate to poor results, in terms of the impact of benefits on HR goals.
“We are seeing most employers fall into one of three camps – the very small minority who likely feel they are achieving their desired benefits goals, those who’ve made the strategic changes and now need to improve experience and those who may well be left behind, if they don’t hurry up and undertake the same strategic review of their own programme.”
The research showed fairness and inclusivity were likely to be a priority in future benefits decision-making, with more than half of organisations intending to fill benefits gaps for lower grade employees and a quarter planning to reduce the waiting period for joining benefit provisions.
Seven in 10 (70%) plan to implement new benefits or increase choice, personalisation or flexibility, while one in five (20%) are extending the provision to workers’ dependents. A further two-thirds have already, or intend to, implement or enhance benefits to support diversity, such as provisions for neurodivergent staff or gender health support.