Friends Provident is urging employers to resist temptations to make cuts to group risk and health insurance benefits, as these benefits are highly valued by staff as part of their overall employment package.
As economic pressures persist and businesses continue to review benefit packages as a means of reducing overheads, Friends Provident is calling on employers to think carefully before pulling benefits. The insurer believes this could be counterintuitive and many employers could risk losing key staff in the event of a future upturn in the UK economy.
A recent study found health benefits are highly valued by employees so much so that in some cases they would even be willing to have their salary reduced in order to receive them. Over one third of those surveyed said they would be prepared to take a pay cut to receive health insurance and a further 21% said they would accept a lower salary to receive income protection from their employer.
Friends Provident believes the figures suggest the need for employers to resist the temptation to tinker with those elements of an employee benefit package, especially as these can play a key role in retaining existing staff and attracting new employees when the recovery begins.
Declan White comments, "Employers are increasingly facing the quandary of whether to retain, revise or remove their employee benefit packages. It is important for employers to consider not only the cost, but also the perceived value of the benefits held by their staff, as part of their decision-making rationale. Even in today's uncertain economic times, employees will still look at what benefits they have versus what benefits they could have elsewhere."
Income protection insurance: News update: 19 March 2010