Edenred: Seven Benefit Trends for 2014 - Insight Report

EdenredBenefits InsightSeven trends for benefits in 2014

2 www.edenred.co.uk/ehub

ContentsThe agenda for benefits in 2014 3

Benefits budgets will remain protected 3

A ’more for less‘ strategy dominates benefits planning 4

Pensions remains the prime concern for employers 5

The cost of living is also a big issue 6

The shift to mobile is having little impact on benefits strategy 7

Benefits are seen as a tool for engagement not performance 8

Return on investment remains a problem 9


The agenda forbenefits in 2014Things are looking up. With a sunny economic outlook, organisations can plan for a new year with some measure of confidence for the first time since 2008. But what does the year ahead have in store for benefits? At the end of 2013 we surveyed decision makers in HR and reward and asked them about their priorities. This is what they told us.

Benefits budgetswill remain protected

While the majority of organisations will see budgets static (72%), one in five organisations will have more to invest in benefits in 2014. With only a minority (7%) asked to cut back on benefits, it is clear that benefits

will remain protected from budget reductions in the year ahead.

What this means for youThese figures are largely consistent with our research last year which found 76% of organisations would have the same or less budget in 2013. Increases in benefits budgets are an exception not the norm.

Only a minority(7%) were asked to cut back on

benefits

1

1in5 Will have more toinvest in benefits


A ‘more for less’strategy dominatesbenefits planning

Benefits budgets may be static but the majority of organisations are looking to do more with the money they have to invest. A large majority (59%) of organisations plan to change their benefits strategy in

2014 and for over two thirds (69%) it will involve an increase in the number of benefits on offer.

What this means for youWith limited scope for additional investment, salary sacrifice and voluntary benefits will play a bigger role in benefits strategy as no- or low-cost options for improving your benefits proposition. Organisations who fail to improve their benefits mix will get left behind by those who do.

2 A large majority (59%) of

organisationsplan to change their benefits

strategy in 2014

Plan to increase the number of benefits


Pensions remains the prime concern for employers

The top driver for change in benefits strategy in 2014 will be auto enrolment. Given that mid-market and medium-sized businesses make up the largest volume of UK businesses, this is not surprising in itself.

However what is surprising is only a minority (43%) of businesses see the pensions changes as a platform to increase employee awareness in the wider benefits mix.

What this means for youWhile auto enrolment needs a communications process of its own, it offers an excellent platform to raise awareness of the full benefits proposition in an organisation. It is an opportunity which many organisations could still take advantage of in order to improve employee perceptions of benefits in 2014.

3The top driver for change in

benefits strategy in 2014 will be auto enrolment

Of businesses see pensions change as a platform to increase employee awareness


The cost of livingis also a big issue

The biggest surprise in our results was the extent to which the cost of living debate is reshaping benefits strategy. Overall it was ranked as the second most important driver of change in 2014 by those we

surveyed. What’s more, one in five organisations (21%) said that the environment of wage restraint had increased take-up of benefits in their business.

What this means for youFinancial wellbeing is now on the map as a critical area for employers to address in benefits strategy and in the year ahead, employers face an important challenge. While the economy may be improving, the effects of the stagnant economy on employee finances will still need to be addressed – particularly if organisations are to hold on to their talent in the year ahead as the job market improves.

One in five organisations

(21%) said that the environment of wage restraint had increased take-up of benefits in their

business

4

The second most important driver of change

Pen

sio

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uto

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(49%

)

Imp

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ost

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(43%

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A f

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Pro

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Vouc

hers

in

2015

(20%

)


The shift to mobileis having little impacton benefits strategy

This year has been the year of the tablet and smartphone with sales soaring and internet use now dominated by these devices. Yet the opportunity for the use of mobile platforms for benefits appears to be passing organisations

by. Only 14% of employers ranked mobile as one of their three priorities for the year ahead while only 23% thought mobile channels represented an opportunity to drive increased take up of benefits in their organisation.

What this means for youMobile represents a significant opportunity for organisations to reshape the way they deliver and communicate benefits in the year ahead. While it may be too late to execute benefits strategy which takes advantage of mobile benefits, at the very minimum 2014 should be the year to set a strategy which is right for your organisation.

5

Thought mobile channels represented an opportunity

Only 14% of employers

ranked mobile as one of their three priorities


Benefits are seen as a tool for engagement notperformance

For the large majority of employers (74%), benefits are seen as a tool which supports employee engagement in their organisations. An even higher number (79%) said this investment is effective in showing that they are looking

after their employees. Around half (49%) of employers say a reduction in benefits investment would harm their ability to attract and retain the talent they need.

What this means for youBenefits still occupy the traditional role of being a differentiator in the employer value proposition but few organisations are looking at how benefits strategy can support performance and how the link can be made. This is an opportunity for many who are looking at how to get more out of benefits spend in 2014.

679% said benefits

investment is effective in

showing they are looking after their

employees

Of employers say benefits support

employee engagement


Showing a return on investmentremains a problem

One of the most troubling areas highlighted in our research was the inability of employers to say that benefits either delivered a good return on investment (39%) or that they help achieve business

objectives (29%). This came from the same survey which also found organisations rating benefits highly for their impact on employee engagement – now established as a critical element of business performance. As a key contributor to the employer value proposition – this would suggest that either the wrong measures are being used for ROI or that nothing is being measured at all.

What this means for youBenefits budgets may be protected in the year ahead but it is clear that organisations can work harder to show a meaningful and clear link between benefits investment and contribution to people and organisation strategy. Failure to do this could undermine benefits investment in your organisation.

7Benefits

delivered a good return on

investment (39%)

29% said that benefits help achieve business objectives


About EdenredEdenred helps organisations engage and motivate people to achieve enhanced performance.

This is achieved through provision of unique and unrivalled total reward and recognition solutions, including the widest range of incentives, rewards and benefits solutions, individually designed to fit your audience, your goals and your budget.

We do this through vouchers, prepaid cards, online platforms and digital & SMS products to help engage and motivate your employees, customers and business partners. Over 20 different solutions last time we checked.

Employee Benefits solutions that encompass the management of your flexible and voluntary benefits, employee discounts and salary sacrifice schemes, that can be deployed to drive engagement at a company-wide level or focused around specific segments of your workforce.

Incentives & Rewards solutions that can motivate, create behavioural change and improve performance, centred around the widest choice of reward platforms and mechanisms that offer the recipient the widest choice of redemption options.

Expense Management solutions that help streamline and simplify your routine payment processes, reducing administrative burden, saving money and helping make life easier for everyone.

Communications Services that ensure your investment in incentives, rewards and benefits are understood, valued and appreciated, delivering maximum return for your business.

To find out more, visit www.edenred.co.uk, call us on 0844 875 3388 or email [email protected]

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Edenred: Seven Benefit Trends for 2014 - Insight Report