Employers are being warned not to ditch staff benefits in a “knee jerk” reaction to the Bank of England’s recent dire warning of a five-quarter recession.
Employee benefit consultants say they recognise that many companies will have to reduce spending, but there are concerns that this could mean cut backs on employee benefits, particularly relating to health.
But Partners& wellbeing and benefits director Steve Herbert says this would be a mistake and could leave firms in a worse position when it comes to hiring and retaining staff and dealing with the ongoing challenges of Covid-19.
Herbery says: “We completely understand – and fully accept – that faced with such grim economic predictions many employers will need to adjust their spending commitments to ride-out the recession ahead.
“Yet our very real concern is that some employee benefits offerings might be surrendered as part of any such review. We genuinely believe that this would be a mistake.”
Partners& points out that Covid remains a risk with numbers remaining high and further mutations possible in the winter months ahead. Long Covid also continues to be an issue with the latest figures from the Office for National Statistics showing that 761,000 people in the UK have experienced such conditions for a year or longer, of which 380,000 had suffered for over two years.
Other employee health concerns include the reality that a short-staffed NHS remains overwhelmed in many areas and may not be able to provide the rapid support and treatments that employees and employers would usually expect. Meanwhile the mental health of many workers remains fragile, with this issue likely to be exacerbated by the acute pressures and stresses of a cost-of-living crisis.
Herbert adds: “As we witnessed during the worst of the Covid-19 crisis, employee benefit insurances and protections are often at their most valuable, important, and useful when times are tough, and when employers have limited financial options available to support their workers.
“A good employee benefits offering should offer important protections, useful support features, and of course offer a viable route towards full health and a speedy return to work.”
Partners& also highlight the continuing concerns around recruitment and retention in the UK. This issue remains a very real headwind for employers, and whilst a recession may well result in an increase in unemployment, the UK could still face candidate shortages and skills gaps next year.
Herbert adds: “The reality is that 2023 looks set to be a really difficult year on so many levels. We are working with clients already to ensure that they are equipped to weather the coming economic storm and build resilience into their business so that they can be in a position to bounce-back quickly once things eventually improve.
“Now, more than ever, employers will need to retain their best employees, whilst also attracting what new talent is available. Employers will also need to do everything they can to keep their workforce fit, healthy, and productive.”