When it comes to employee benefits, UK employees view tax-efficient savings such as pensions and share plans as those with the greatest value.
But while many would use a one-off windfall to fund such benefits, surprisingly few would give up current salary for them, a PwC survey of 2,400 employees shows.
Which are the most highly valued benefits?
When asked which are their two most highly valued employee benefits, 65 per cent of respondents said for contributions to their pension pots, while around one half of respondents (49 per cent) said they would participate in a company share scheme.
Company cars and medical insurance were chosen by over a quarter of those surveyed (28 per cent).
There is a marked difference in the popularity of benefits depending on employees’ gender, age and the industry in which they work.
Unsurprisingly, the number of employees choosing workplace pensions increases with age, with 70 per cent of those aged 40 and older choosing to invest in company pension schemes, compared to 56 per cent of respondents in their 20s.
Pensions are also deemed to be of far higher value within the public sector (73 per cent) than within the manufacturing sector (57 per cent), and they are also 5 per cent more popular with men than with women.
“Our research highlights that people recognise the importance of benefits that help with long term savings, however, cash is still king and employees are unlikely to give up cash for tax efficient benefits,” says John Harding, pay, performance and risk partner at PwC.
“Reward is by no means a one-size-fits-all. Employers should target their benefits spend accordingly, otherwise they risk spending valuable resources on benefits that are not valued appropriately by certain segments of their workforce.”
How would employees spend a £500 windfall?
When it comes to using a one-off extra £500 to spend on existing workplace benefits, pensions are the most popular choice again (although only 26 per cent choose this), while 20 per cent would choose to add to their holiday leave and a smaller number (17 per cent) choose to take the £500 as additional pay.
Despite being one the second most valued benefit, only 8 per cent would elect to take the additional cash and invest it in their share plan.
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The importance of cash over benefits increases still further when employees are offered the opportunity to exchange 5 per cent of their pay for a new employee benefit.
In this scenario, two-thirds say they would not sacrifice their existing salary for any benefits but would prefer to maintain their cash.
“Employers should communicate the benefits they offer and allow employees the opportunity to use bonuses, variable pay elements and pay awards towards their benefits package rather than simply giving up existing pay under Flexible Benefit schemes,” adds Harding.
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