BENEFITS PRACTICE | EMPLOYEE BENEFITS

All employers provide benefits in some form or another to employees, but practice varies according to:

§  Employee status: typically, the more senior the employee, the more benefits provided. But this is not always the picture. A growing number of organizations, especially in high technology and other sectors requiring rapid growth and employee flexibility, have opted for harmonized benefits and conditions for core benefits.

§  Local 'national' sector practice: there are marked differences in benefits entitlements between the finance sector and the rest of the private sector, between organizations where workforce costs form a small part of corporate expenditure and those which are labour intensive, and between profitable and progressive organizations and those which have to keep a tight control on workforce costs to survive. Differences by job function may also exist.

§  Private or public sector status: differences were much greater in the early 1980s than in the new millenium. Apart from generous, indexlinked pension schemes and longer holidays, the public sector enjoy comparatively few fringe benefits and they very rarely have company cars - recently market competition for scarce skills has changed that for many public servants, notably in local authorities, non-departmental public bodies and the new Executive Agencies hived off from the core of the Civil Service.

§  Employers' views on the advisability of providing benefits: the extent to which they wish to use benefits to attract and retain staff - some organizations take a much more generous line than others or simply prefer to pay more in 'clean cash' than in benefits.

So the emphasis now in the UK is predominantly on cash payments rather than benefits. Most employers have therefore concentrated on providing a competitive set of 'core' benefits to supplement cash remuneration. The wilder extremes of tax-efficient 'beyond the fringe' benefits only exist in areas where extremely high pay is given in response to severe market pressure and for directors/owners of private companies where shareholder pressure is not an issue.