With the start of 2018 already in sight, what’s in store for the world of employee benefits? David Skinner, Managing Director for PIB Employee Benefits, shares his predictions around pensions, technology and wellbeing.
Based on the areas that the PIB Employee Benefits team has been involved in this year with clients and observed more broadly in the market this year, 2018 is going to be another big year in the employee benefits space.
Government Auto-Enrolment scheme
We expect to see many elements being introduced that will make a big difference for both organisations and their people. For example, the increase in mandatory pension contributions as a result of the government Auto-Enrolment scheme could have an interesting impact. Up until now, the statistics show that there around 10% of employees opting out of contributing towards their workplace pensions.
However, with the increased contribution levels required from both the employee and employer, there could be an increase in that opt-out ratio. Pensions provider, Royal London, has done some research which indicates that up to 30% of the younger workforce (otherwise known as millennials) are likely to opt out. It will be interesting to see how this pans out. Therefore, it is important that companies have the right mechanisms in place to enable clear and effective communication for employees to properly understand what is happening so that they can make informed decisions.
Also, in regard to pensions, many organisations are coming up to their triennial reviews which marks three years since their initial staging through auto-enrolment. Recently I have noticed a real softening in the market as many pension providers are keen to bring in business. If an organisation truly spends some time researching what’s available on the market they can see that the charges that providers have previously imposed or looked to impose have fallen.
Hence, I think a triennial review is a great opportunity for organisations to have a really in-depth review at their pension scheme to make sure that it is fit for purpose and future-proofed, but also time to save on charges and add even more value to employees because it is a group personal pension, the annual management charge is taken from the individuals pension fund so the lower the charge agreed between the employer and provider the better the outcome for the employees.
2018 is also going to be a big year when it comes to maximising technology available to support employee benefit schemes and make them more accessible – this continues to improve. Through increased technology availability, employers will have a greater range of choice when connecting with their employees, no matter how diverse or where they are in the world. This should ultimately result in a more engaged workforce which will assist with developing their desired culture. There have already been great strides made in how technology is used to engage employees and drive productivity and I see this carrying on into the next year and believe there will be huge investment in this area.
Many organisations are starting to catch onto is the importance of employee wellbeing because of the positive impact it has on their people as well as their business.
Leaders are putting more time and energy into thinking about how they can support their people. Many organisations have great platforms or programmes in place which they can use to provide innovative solutions to their employees to help them through various types of issues they may affect their physical and mental health, such as stress. I think that this is becoming more apparent so there are going to be a lot more solutions coming into the market in regard to these areas.
Is your organisation looking to introduce a new employee benefits scheme or looking to improve one already in place? If you’d like some help, the PIB Employee Benefits team would love to hear from you. Drop us a line firstname.lastname@example.org.