UK businesses are prioritising employee benefits and wellbeing strategies despite cost driving decisions, according to new research.
According to a report titled “Benefits Design Research 2024,” conducted by Howden Employee Benefits & Wellbeing and the Reward & Employee Benefits Association (REBA), 70 per cent of firms intend to maintain their benefits despite cost concerns, with 31 per cent expecting to absorb cost increases, and 32 per cent aiming to boost investment.
But around 80 per cent of companies still struggle to secure budget approval, with 38 per cent of them intending to allocate resources to financial wellbeing in 2024/2025, marking a 217 per cent increase from 2023.
Pension spending is also projected to surge, with 30 per cent planning to raise their contribution in 2024/2025, reflecting a 233 per cent increase from 9 per cent in 2023. Future areas of focus include projects around financial welfare and technology.
Howden Employee Benefits & Wellbeing executive director Matthew Gregson: “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.
“Companies must prioritise measuring the impact of benefits to demonstrate value and secure budget. Currently, significant numbers are failing to measure the impact of their benefits on key strategic business objectives, such as employee absenteeism; Diversity, Equity, and Inclusion initiatives; employee wellbeing; retaining and recruiting employees, and employee engagement.
“Despite increasing costs, employers continue to invest in employee benefits, reinforcing their value both to the business and employees. However, moving forwards companies will need to run their programmes more effectively, benchmarking their existing benefits, using data-driven insights to inform their strategies, and ensure they measure the value of their benefits, and manage their stakeholders well.
“Strategic priorities will involve ensuring pension are better funded and performing well, financial wellbeing support is provided for employees and that healthcare and protection benefits are universally available and more effective. Businesses will also need to make better use technology and improve benefits communications to drive value and to measure and demonstrate the value of their benefits programmes to secure support and ensure their aspirations become a reality.”