OREANDA-NEWS. March 23, 2016. Aviva’s Working Lives Report has found that 2016 could bring a workplace benefits boost in the private sector. The latest research shows that almost one in five (19%) employers are planning to increase spending on workplace benefits in the next 12 months, rising to 25% among large firms (250+ employees).

This is a major reversal from Q1 2013, when just 6% of employers were planning to increase their spending and 17% were planning cuts.

More companies are now offering employee benefits beyond basic salaries than was the case three years ago – partly resulting from the roll-out of auto-enrolment. Additional staff benefits are now offered by 86% of employers, up from 81% in Q1 2013.

Fig 1: Plans for spending on workplace benefits in the next 12 months

  2013 2016
Plan to increase spend on workplace benefits in the next 12 months 6% 19%
Plan to maintain spend on workplace benefits in the next 12 months 63% 62%
Plan to reduce spend on workplace benefits in the next 12 months 17% 13%
Unsure about spend on workplace benefits in the next 12 months 15% 6%

The report suggests the increase in benefits provision by private sector companies may be linked to a shift in HR priorities. Attracting employees with the right skills is now the number one aim of businesses in regards to their staffing: 36% of employers now see this as a top priority, up from 17% in Q1 2013. 

More than half (56%) of employers offering benefits now say they do so to support recruitment and retention, compared with 44% three years ago. Almost two in three (64%) now make staff benefits a key feature of their annual strategic planning.

Businesses are also seeking more regular feedback from staff on the benefits they offer: 72% do so at least once a year, up from 60% in 2013.

Private sector confidence and work/life balance both improved

The three years which have passed since Aviva’s last Working Lives report in Q1 2013 have seen a degree of confidence return to the UK economy. Two in five (40%) employers are confident in the economy, compared with just 25% three years ago. Those who lack confidence have fallen from 45% to 19%.

Private sector employees have also felt an improvement in their work/life balance. More than three in four (78%) feel they work in a friendly atmosphere (up from 64% in 2013). There has also been a significant increase in those who are happy with the impact work has on the time they spend with their family, up from 53% in 2013 to 67% 2016.

Fig. 2: How private sector employees feel about their work/life balance

  Q1 2013 Q1 2016

Change

(percentage points)
Enjoy work 60% 63% +3
Feel they work in a friendly atmosphere 64% 78% +14
Derive personal satisfaction from work 60% 67% +7
Happy with the impact of work on time spent with family 53% 67% +14
Happy with the impact of work on their health 45% 56% +11

Legislation a big concern for small businesses

The Working Lives report also examines employers’ biggest business concerns and how these have evolved since Q1 2013. It found that staying ahead of the competition and innovating remains the most common concern among private businesses, affecting 47% – up from 42% three years ago.

In line with their returning confidence, surviving the downturn (16%) has been overtaken as employers’ second biggest concern by adapting to have more efficient systems, processes and technologies (30%).

Among small firms, keeping up with new legislation, such as pension changes, is the biggest concern, affecting 37%. This also registers as the third most common concern across all employers, with 25% feeling this pressure compared with 14% three years ago.

Although large firms report less pressure from legislative changes, they are more likely to feel concerned about keeping up with employees’ pay and benefits package expectations. This now affects 18% of all firms, up from 13% in Q1 2013.

Auto-enrolment retains support from majority of employers and employees

The pressure to keep up with new legislation is likely to have been impacted by the continued roll-out of auto-enrolment across firms of different sizes since 2012. 480,000 micro, small and medium sized businesses are due to set up a workplace pension for the first time this year.

Aviva’s research shows both employers and employees have continued to welcome the Government’s decision to introduce auto-enrolment for company pension schemes. Three in five employers (61%) in Q1 2016 agree with making the workplace the focus for automatic pension savings – a slight increase from 58% in Q1 2013. Approval rises to 74% among those who have begun auto-enrolment (74% agree while 6% disagree), indicating that the initiative has largely been well received to date.

A significant 93% of staff who have experienced auto-enrolment say the process was straightforward. This is particularly positive given that just 55% of employers who have started the process share this view, falling further to 24% among small firms.

Nevertheless, the biggest reported effects of auto-enrolment to date are both positive. One in four (25%) employers who have auto-enrolled staff say the biggest effect has been to modernise their pension scheme, while one in five (20%) say the biggest effect has been to allow them to provide better pensions for more employees.

This contrasts with the views of those firms yet to begin their auto-enrolment journey. Alongside providing better pensions for more employees (13%), the biggest effect they anticipate is passing on the cost to customers (13%). A similar proportion (12%) are concerned about limiting the size of salary increases.

Fig. 3: Top five effects that employers have experienced or expect from auto-enrolment

Employers who have instigated auto-enrolment - experience

Employers who have not yet instigated auto-enrolment - expectations
Modernised the pension scheme (25%) Pass on costs to customers (13%)
Provided better pensions for more employees (20%) Provide better pensions for more employees (13%)

Needed to increase the specialist guidance given to

staff through HR/Finance department (16%)

 Limit the size of salary increases (12%)
Increased the ability to retain staff (12%) Modernise the pension scheme (12%)
Increased the ability to attract staff (11%) Reduce other benefits that are offered to staff (11%)
Do not think it has affected the business (25%) Do not think it will affect the business (24%)

Andy Curran, Managing Director of Corporate & Business Solutions at Aviva, said:

“This report paints a very positive picture of the workplace in Britain on the whole, and it is pleasing to see that – with confidence improved since 2013 – businesses are again looking to invest in their workplace benefit packages. Additional benefits are a great way to attract and retain skilled employees and increased investment gives a clear indication that employers are again looking to expand, rather than just survive.

“Auto-enrolment has played a major role in that and it’s good to see that those who have been through it are reporting positive experiences. For employers, the journey may not have been as smooth, especially for those smaller businesses with limited resources. But auto-enrolment is encouraging millions of people to save for their futures and the work businesses of all sizes are doing to support it is very encouraging.”

Download Working Lives Report 2016 PDF (1.5MB)


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If you are a journalist and would like further information, please contact:

Instinctif Partners: Jordan Campbell, Angeli Everitt or Sam Fisk: 0207 427 1400 or twc.aviva@instinctif.com

Aviva Press Office: Ben Moss: 07827 832 395 or ben.moss@aviva.com
Aviva’s retirement spokesperson, Alistair McQueen, is available for comment/interview

Methodology

The Aviva Working Lives report was designed and produced by Aviva and Instinctif Partners in association with ICM Unlimited. Over 1,000 private sector employers and 4,000 private sector employees were interviewed in two waves to produce the second and third editions of the report in Q1 2013 and Q1 2016.

All interviews were conducted online and the sample targeted to ensure a comprehensive cross-section of the UK working population and consistency between editions. The latest wave also included an additional group of over-65s still in work, in order to focus in detail on the experiences of older people in the workplace.

For the purposes of this report, a ‘small business’ is a company with 0-49 employees, a ‘medium company’ has 50-249 employees and a ‘large business’ is 250 or more employees.

Notes to editors:

  • Aviva provides life insurance, general insurance, health insurance and asset management to 34* million customers, across 16 markets worldwide
  • In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index. 
  • Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and currently manages over ?245 billion in assets.
  • Aviva helps people save for the future and manage the risks of everyday life; we paid out ?24.6 billion in benefits and claims in 2014.
  • By serving our customers well, we are building a business which is strong and sustainable, which our people are proud to work for, and which makes a positive contribution to society. 
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* Before the deduction of overlapping customers.