Employee Benefits Report 2014

Attraction, Retention, Motivation: from listening to our clients these are the three most common words used when discussing employees. And given that the war for talent is back on, this comes as no surprise. Employers now need to think outside of ‘basic salary’ when attracting, motivating and retaining staff.

To help provide clients with real data and insights, Sigmar commissioned a survey in relation to employee benefits which can be a key tool in addressing all three areas.

Partnering with Qualtrics, we surveyed 2,657 employees in Ireland in relation to:

• Current benefits• Attitude towards these benefits• Benefits in highest demand

I would like to thank each participant for their time and effort.

For further information on this survey, please contact our Senior Relationship Manager, Jennifer Ward on +353 1 4744660 or email jward@sigmar.ie.

Yours sincerely,

Frank FarrellyDirectorSigmar Recruitment

Foreword

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Methodology

Gender Age

Career Level Education

The survey data was gathered through an online questionnaire completed by 2,657 employees. 90% of participants are employed in the private sector ranging across indigenous companies, multinational organisations and SMEs, whilst 10% of participants are employed in the public sector and semi-state organisations.

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Introduction

Benefit SignificantPrivate Health Insurance 84%

Pension 82%

Paid Sick Days 81%

Educational Support 79%

Flexi-Time 75%

Additional Vacation Days 74%

Life Insurance 69%

Long Term Disability 66%

Savings Scheme 63%

Subsidised Food 58%

Laptop 57%

Tax Saver Travel Scheme 55%

Travel Insurance 53%

Gym Membership 52%

Parking 51%

Mobile Phone 51%

Paid Parental Leave 50%

Employee Stock Options 48%

Bike To Work Scheme 42%

Child Care 40%

Company Car 37%

Figure 1. Significance of Benefits to EmployeesIt is an interesting time to examine the subject of employee benefits in Ireland. The need to keep costs low in recent years resulted in many companies reducing the number of employee benefits offered. However with the recent economic recovery many companies now face talent shortages and a struggle to attract, motivate and retain staff.

While employee benefits programmes are a significant investment for employers they also provide an opportunity to establish a competitive advantage for their brand as an employer. The challenge is to balance the goal of controlling costs, while at the same time providing a benefits package attractive enough to help attract and retain the highest calibre employees over the long-term.

With a wide variety of benefits to offer, it can be challenging to determine where budgets and efforts should be focused. Our 2014 Employee Benefits Survey reveals 4 key themes:

1. Importance of Health & Wellbeing

2. Taking Care of the Future

3. Appetite for Educational Support

4. Addressing Employees’ Life Stages

Our research indicates that in Ireland, the most significant benefits to employees are: Private Health Insurance (84%), Pension (82%), Paid Sick Days (81%), Educational Support (79%) and Flexi-Time (75%).

Non-essential benefits such as Stock Options or benefits that can only be enjoyed by a segment of the employees such as Child Care and Paid Parental Leave, feature near the bottom.

Interestingly Bike to Work and the Tax Saver Travel Scheme did not score highly either - this shows that they have some distance to go in terms of universal recognition.

Figure 2. Benefits Employees are in Receipt of

It’s not surprising to see that benefits that are seen as essential top the list such as Private Health Insurance and Pension.

While these benefits are of the most importance to Irish employees, Figure 2 suggests there is a gap between the benefits employees are in receipt of and those that are of most significance. This suggests an opportunity for companies to improve employee satisfaction and loyalty by providing the right benefits.

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Key Findings

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1. Importance of Health & Wellness

Private Health Insurance is the most significant benefit to employees with 84% of our sample considering it important.

Despite being one of the most common benefits employees are in receipt of (58%), an additional 30% of our sample would like to see Private Health Insurance introduced as a benefit in their workplace. This clearly confirms the high value employees place on Private Health Insurance.

It is also interesting to note that the importance of Private Health Insurance is constant across demographics with all age groups rating it as the most important benefit (see Figure 3).

Figure 3: Breakdown by Age Group – Significance of BenefitsHealth & Wellness Benefits

Benefit 18-24 25-34 35-44 45-54 55+ TotalPrivate Health Insurance 80% 83% 87% 88% 81% 84%Paid Sick Days 76% 81% 85% 81% 67% 81%Flexi-Time 74% 74% 78% 77% 61% 75%Additional Vacation Days 74% 76% 75% 68% 56% 74%Subsidised Food 66% 61% 56% 47% 38% 58%Gym Membership 68% 54% 48% 42% 39% 52%

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While both males and females value work-life balance, women in particular would like to see Additional Vacation Days introduced in their workplaces; 41% of females compared to 31% of males. Males would prefer Gym Membership over Additional Vacation Days.

We can also see the growing interest in health and wellbeing benefits with 32% of our sample selecting Gym Membership as an additional benefit they would like to see introduced. Particularly within the younger working population; Gym Membership was the most requested benefit in the 18-24 and 25-34 age brackets (54% and 35% respectively).

Figure 5: Breakdown by Age Group – Additional Benefits Employees would like to see introduced in their WorkplacesHealth & Wellness Benefits

18-24 25-34 35-44 45-54 55+ TotalAdditional Vacation Days 40% 34% 37% 35% 30% 35%Gym Membership 54% 35% 23% 24% 28% 32%Flexi-Time 30% 32% 32% 32% 26% 32%Private Health Insurance 33% 32% 28% 26% 28% 30%Subsidised Food 30% 24% 18% 18% 12% 22%Paid Sick Days 29% 19% 19% 16% 7% 19%

For employers, focusing on health and wellbeing makes sense as there is a direct connection between healthy workers and higher productivity, higher job satisfaction and lower absenteeism.

Private Health Insurance is not the only health and wellbeing benefit that employees value. Four of the top five benefits that employees would like to see introduced in their organisations are related to this area (see Figure 4). This is not surprising considering the changing working environment with 24/7 access to email, increased travel requirements and over-time. As a result of this more demanding society employees are asking for more flexible hours and time off: 35% of those surveyed would like to see Additional Vacation Days offered and 32% would like to see Flexi-Time introduced to their organisations. Additional Vacation Days in particular is the number one most requested benefit by those aged 35+.

Figure 4: Additional Benefits Employees would like to see introduced in their Workplaces

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2. Taking Care of the Future

Demographics and life stage play a role in the type of benefits an employee is in receipt of. As we can see from Figures 6 and 7, the uptake of and interest in pension and retirement benefits increases within each age group, peaking amongst the 45-54 years age group.

Pension is rated as the 2nd most important benefit by our sample group. While over 80% rated it as significant, only 57% of participants are currently in receipt of a pension. Over the past decade, the media has highlighted trends related to long-term care such as increased longevity, post retirement lifestyles and increasing health and nursing care costs. This not only means that we will need a pension for a longer time but it will cost more to provide for. As employees realise that they cannot just rely on the State for a comfortable retirement, they are increasingly taking personal responsibility for their own pensions.

Younger workers also see the importance of having a Pension (69% of 18-24 year olds rate pension as a significant benefit), yet only 35% of 18-24 year olds are in receipt of a Pension. As this age group is furthest from retirement this is not surprising, as retirement is essentially off their radar.

Figure 6: Breakdown by Age Group - Benefits in Receipt ofRetirement & Savings Benefits

18-24 25-34 35-44 45-54 55+ Total

Pension 35% 53% 63% 69% 59% 56%Life Insurance 23% 35% 45% 48% 48% 38%Long Term Disability 9% 17% 24% 30% 31% 20%Saving Schemes 15% 14% 14% 14% 16% 14%

Figure 7: Breakdown by Age Group – Significance of Benefits Retirement & Savings Benefits

18-24 25-34 35-44 45-54 55+ Total

Pension 69% 81% 85% 88% 78% 82%Life Insurance 66% 66% 72% 77% 76% 69%Long Term Disability 51% 62% 72% 68% 65% 66%Savings Scheme 64% 64% 62% 62% 52% 63%

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3. Appetite for Educational Support

An interesting result from our survey is the significance participants place on Educational Support. 79% of our participants rated Educational Support as a significant benefit making it the 4th most important benefit to our sample.

Career development is a highly attractive or even a basic requirement for many employees when considering a job opportunity. The idea of a ‘job for life’ has been replaced with ‘employable for life’ where continuous learning is a key tool.

Educational Support is most significant to the younger generation as both the 18-24 year old and 25-34 year old age groups place Educational Support within the top 5 benefits they would like to see introduced in their workplaces.

Despite the significance placed on this as a benefit by employees, very few are currently in receipt of Educational Support. Amongst the younger generation who value this benefit more – only 25% of 18-24 year olds are currently in receipt of Educational Support. 35-44 year olds have the highest uptake of Educational Support with 42% in receipt of it as a benefit.

The importance of Educational Support is consistent across all age groups with a slight drop off in the 55+ age group.

Many employers avoid offering Educational Support as a benefit due to its cost, both in terms of time and money and the fear that an employee may leave upon completeing a qualification. However, these benefits can be offered in such a way that it aides retention. For example an employee would agree to repay the cost of the education if they left within an agreed time period.

In today’s business environment where the competition for high quality employees is paramount, Educational Support can be a very effective tool for employee attraction and retention. Educational Support provides the dual advantage of an employee who feels their employer cares about their professional development, and the organisation gains a richer, better prepared workforce.

Figure 8: Breakdown by Age Group – Significance of Benefits Educational Support

Benefit 18-24 25-34 35-44 45-54 55+ TotalEducational Support 80% 80% 79% 76% 55% 79%

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4. Addressing Employee’s Life Stages

When we analysed our sample results, there were only slight variances between genders but there were significant differences between age groups. This reflects that different age groups have different priorities, which employers should take into account when designing benefits packages.

Our survey has already shown that the younger generation are more concerned with Health and Wellbeing related benefits where Pension and Retirement benefits become of more significance to the older age groups. There is also a segment of the group where Parental Benefits become of significance.

With the high price of child care costs in Ireland, Child Care benefits and Paid Parental Leave are an important attraction and motivational driver to offer working parents. As we can see in Figure 9 the interest in Parental Benefits spikes within the 25-34 year old and 35-44 year old age groups.

Figure 9: Breakdown by Age Group – Significance of Benefits Parental Benefits

18-24 25-34 35-44 45-54 55+ Total

Paid Parental Leave 40% 54% 57% 29% 21% 50%Child Care 29% 41% 51% 25% 15% 40%

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Yet very few of our sample group are currently in receipt of Parental Benefits.

Figure 10: Breakdown by Age Group – Benefits in Receipt of Parental Benefits

18-24 25-34 35-44 45-54 55+ Total

Paid Parental Leave 6% 18% 19% 9% 7% 16%Child Care 3% 7% 6% 3% 0% 6%

And when asked what benefits they would like to see introduced to their workplace 32% of 35-44 year olds selected Child Care making it the 2nd most sought after benefit within that age group.

Figure 11: Breakdown by Age Group – Benefits Participants Would Like To See Introduced

Parental Benefits

18-24 25-34 35-44 45-54 55+ Total

Paid Parental Leave 13% 20% 22% 7% 9% 18%Child Care 12% 24% 32% 9% 5% 23%

This all clearly highlights the changing needs of employees as they progress through different life stages, whether that is changing family circumstances or employment status. Organisations are competing to attract, motivate and retain the best talent and a blanket benefits programme is unlikely to be the most effective method of meeting the diverse needs of employees.

The introduction of flexible benefits can offer the distinct advantage of engaging wih multiple generations across your workforce. Flexible benefits also heighten employees’ awareness of the benefits they are in receipt of as it places more control in their hands regarding the make-up of their benefits.

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The most significant benefits to employees were Private Health Insurance, Pension, Paid Sick Days, Educational Support and Flexi-time.

It is encouraging that our sample view Private Health Insurance and Pension as significant and indeed across ages and genders this carries through. The fact that it is also seen as important by those who don’t have it means it is close to a ‘must have’ for any employer reviewing their benefits package. However considering the increasing cost of providing these benefits, we predict more employers may look to employees sharing the cost as a means to balance the books.

The recognition of Sick Pay as a benefit was a surprise to us. There is an opportunity here in that if it is framed correctly, it can be a relatively inexpensive benefit to provide.

The growing interest in balanced, healthy lifestyles sees Additional Vacation Days and Flexi-time feature highly as benefits employees would like to see introduced to their workplaces. Both of these benefits can be particularly cost-effective benefits to provide. Additional Vacation Days in particular can be an effective reward tool.

An interesting result from our survey is the significance participants place on Educational Support. As mentioned these benefits can be offered in such a way that it aides retention. For example an employee would agree to repay the cost of the education if they left within a designated time period.

The fact that the Bike to Work and Tax Saver Travel Scheme did not score highly shows they have some distance to go in terms of universal recognition. This could be an example of how important it is to effectively communicate your benefits packages so your employees understand the savings associated with these schemes. The same can be said for Employee Stock Options.

Finally, benefits will continue to be a critical tool for attracting and retaining talent. Companies can create a competitive advantage for their employer brand by offering a flexible benefits programme to employees. Our survey has shown that there is not a major difference between the genders - life stages have more of an impact on employees attitudes towards the benefits they’re in receipt of. Employees favour benefits that are relevant to their particular stage of personal and professional life.

Points to Ponder

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Tel: +353 1 4744600 Email: info@sigmar.ie

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