Cost in the number one factor driving decisions around employee benefits and wellbeing strategies in the UK, according new a new report.
But despite escalating concerns regarding costs, employers still place significant importance on employee benefits, with a majority (70 per cent) vowing to maintain existing benefits structures.
The report also indicate a significant number of employers are planning to increase spending on financial wellbeing int he year ahead, with more investment into pensions also planned.
These finding were included in the Benefits Design Research 2024, by Howden Employee Benefits & Wellbeing and the Reward & Employee Benefits Association (Reba).
The report identified the impact of internal and external pressures on benefits and wellbeing strategies and design. It found that a third (31 per cent) anticipate absorbing cost increases, while a more confident 32 per cent of employers said they intend to increase their investment in benefits.
The report found that 38 per cent of respondents were planning to allocate resources to financial wellbeing in 2024/25 — a 217 per cent increase from the previous year.
Investment in pension spend is also set to increase significantly with 30 per cent intending to increase their investment in 2024/25 — up from just 9 per cent in 2023.
However, the report found that securing budget approval is a potential barrier to investment, highlighted by eight out of 10 employers. As a result they called for better data on show the return on investment on benefit spend and to demonstrate value.
Looking ahead, companies will focus on technology and financial wellbeing projects over the next two years.
Howden Employee Benefits & Wellbeing executive director Matthew Gregson says: : “Despite increasing costs, employers continue to invest in employee benefits, reinforcing their value both to the business and employees.
“Employers recognise prioritising benefits supports business and HR goals such as improving diversity, equity, and inclusion, attracting talent and retaining employees with key skills.
“However, a pressing business concern is risk mitigation. People risk is a growing issue, particularly when it comes to employee health. Annual insurance cost increases can be considerable and are unlikely to significantly reduce in the years ahead. Therefore, ensuring the workforce remains healthy and productive has never been more important.”
