Private medical insurance (PMI) has seen a significant rise in demand, with 40 per cent of employers offering it, compared to just 14 per cent last year, as “flex pots” gain popularity, according to new research from Zest.
Organisations are increasingly implementing “flex pots,” which are sums of money set aside for employees to spend on benefits that are important to them, according to Zest CEO Matt Russell. It gives employees the freedom to decide how to spend the money, whether it is for wellness initiatives like sports or mindfulness classes or services like private doctor’s appointments.
According to him, flex pots are a cost-effective way to improve employee wellbeing and satisfaction in light of the growing need for choice and flexibility, particularly among smaller businesses that might not provide complete private medical insurance. This solution could potentially tackle the difficulties of meeting the demands of each employee while offering comprehensive benefits.
He says: “If we can’t afford private medical, we’ll maybe find a halfway house which might be private GP, or it could be a flex pot, or it could be an allowance per year, or it could be a wellbeing day. I think there’s lots more to be done in terms of supporting employee wellbeing, as organisations face increasing challenges in meeting diverse employee needs.”
Additionally, the research from Zest also found that pension contributions are one of the top employee benefits being demanded with 32 per cent requesting higher pension contributions, but only 36 per cent of employers are providing this benefit, according to Zest.
According to the Zest study, 32 per cent of workers say that higher pension contributions are their favourite benefit, making them a top priority. There is a discrepancy between what employees want and what employers provide, though, as just 12 per cent of businesses have increased pension contributions in the past year.
The research found that nearly two-thirds or 63 per cent of workers, particularly younger workers between the ages of 18 and 34, believe that benefits like healthcare and pension contributions are becoming more and more important when choosing a job, and 56 per cent of workers would consider leaving their current position for a better benefits package.
According to Zest, employers may need to adjust their services to accommodate these preferences since the demand for wellness benefits is outweighed by financial support choices, especially because 19 per cent of businesses say they cannot afford to raise salaries.
Russell says: “Organisations who fail to meet the needs of their employees could face a debilitating talent drain unless they enhance their benefits packages.
“Employees are placing increasing importance on financial support from their employer and aren’t afraid to switch jobs to get the perks that they need. Employers must ensure that not only are they increasing investment in their benefits offering but delivering enhanced value by implementing the support employees are calling for.
“However, there is also an opportunity for those employers who understand the support their employees are demanding when it comes to benefits packages. These firms can possess a competitive edge as they can leverage their generous and targeted benefits to support talent attraction and retention which can support productivity and business performance.”