TRENDS IN EMPLOYEE BENEFITS POLICY

The Hay Survey of Employee Benefits was first published 30 years ago, in 1974. Since then, the survey has highlighted significant changes in benefits provision in UK organizations, driven by a combination of legislative and environmental changes. For instance:

§  The rising prevalence of the mobile telephone has seen the proportion of employers offering some form of home telephone rental subsidy dropping from 84 per cent in 1990 to 28 per cent in 2003.

§  In 1970, 59 per cent of organizations offered a defined benefit pension scheme based on 1/60th of final pay for each year of service. This figure increased to over 90 per cent during the 1980s and 1990s, but is now falling as organizations close defined benefit schemes to new entrants and offer defined contribution schemes instead.

§  Only 2 per cent of organizations reported offering any form of childcare facilities or contribution to childcare costs in 1990. This has risen to 16 per cent, with childcare vouchers being a popular benefit to include in flexible benefit schemes.

Perhaps the greatest change has been in company car provision. The median level at which status cars are provided has fallen steadily from 800 Hay units in 1974 to just over 500 Hay units in 2003. There is also greater flexibility around the choice of car, as evidenced by the 2003 Hay Benefits Survey, which reported that 67 per cent of status company car drivers can pay to 'trade up' to a more expensive vehicle and 90 per cent can 'trade down', with 52 per cent receiving a cash payment in compensation. In 1994, only 30 per cent of respondents allowed employees to 'trade up', and just 11 per cent offered a cash payment to employees who elected to take a cheaper car. However, not everything changes. New car prices remained static between 2000 and 2003, resulting in little movement in either typical lease prices or car allowances during this time.

The main trends in benefits policy are:

§  continued simplification of benefit packages;

§  increased emphasis on individual need and individual choice, particularly evidenced by flexible and voluntary benefit schemes

§  more attention paid to communicating the benefits available to employees.