Home Business News Pensions outweigh flexible working, unlimited holiday and bonus schemes in race to attract and keep talent

Pensions outweigh flexible working, unlimited holiday and bonus schemes in race to attract and keep talent

by LLB Finance Reporter
10th Oct 22 12:15 pm

A survey of 2,000 employees and 500 SMEs by leading digital pensions platform Penfold has today revealed that pensions are employers’ most useful talent recruitment and retention tool.

Nine in ten employees state that pensions are the benefit that can keep them with their employer (90%) or motivate them to change jobs (89%).

Indeed, no other employee benefit rivals the appeal of pensions according to the UK’s workforce:

  • Just two-thirds (66%) stated that generous maternity/paternity leave was crucial
  • The same proportion (66%) said health insurance or life insurance (67%)
  • 60% said unlimited holiday
  • 56% said childcare support
  • Just 34% said a gym membership and 66% said work social events
    • Likely a result of an increase in flexible work policies since 2020, with three quarters (76%) naming remote or flexible working as key

Even financial benefits such as salary advances (65%) and bonus schemes (74%) didn’t challenge the appeal of pensions.

A missed opportunity for employers

However, despite the value placed on pensions by employees, SME employers continue to prioritise alternative employee benefits:

  • 59% of SMEs said that travel assistance (such as subsidising season tickets) was more important than pensions
  • 55% prioritised work socials
  • 50% prioritised wellbeing support such as workshops and therapy
  • 50% ranked salary advances above pensions, while the same proportion also prioritised bonus schemes

These stats clearly show a significant mismatch between the views of employees and employers on the importance of different benefits, and in a challenging jobs market, the value of pensions should not be understated.

Given that The World Economic Forum reports that one in five workers plan to quit their roles in 2022 alone as part of the pandemic-induced ‘Great Resignation’, employee engagement (particularly with financial matters) is more important than ever before. If employers are to retain, bolster, and develop their teams, they must prioritise the issue that clearly matters most to employees: pensions.

The contributions gap

When asked what level of contribution from their employer would positively impact an employee’s decision to stay with the business, the average answer was 9.5%. Just 5% of employees said an employer contribution of 3-4% would be enough to increase their likelihood of staying with an employer. In contrast, this was the most popular contribution level for SMEs, with 54% saying they offered the minimum employer contribution of 3% under auto-enrolment.

The most popular level of employer contribution (31%) that would retain staff was between 8-10%, while 16% said an employer contribution of between 5-7% would encourage them to stay with their current employer.

Accessibility and high returns top wishlist for workplace pensions

When asked what they cared about most when it came to their pension, 31% of employees said it was being able to check their pension pot whenever they wanted, while a further 31% said high returns. Almost one in five (18%) stated that transparency around investments was vital. However, only 9% of employees care most that their pension provider is aligned with their social, environmental, and ethical values and just 8% said flexibility around contributions was their highest priority.

So, while pensions are a priority for most workers, the research shows that not all pensions are made equal and employers should consider the factors which can differentiate their pension from others to help attract and retain staff.

Chris Eastwood, Co-Founder at Penfold said, “Whilst it is not altogether surprising, we are highly concerned to see such a stark divide between the attitudes of employers and employees towards pensions.

“We hope that today’s research sparks conversations across the UK to foster a more cohesive approach towards financial support.

“The cost-of-living crisis means it is more important than ever that firms are aware and supportive of their team’s financial needs – we urge all employers to assess whether their current pension scheme aligns with short-term economic challenges and long-term financial objectives.”

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