We understand the importance of workplace benefits and how difficult it can be to start saving for a pension when retirement seems like such a long way off; that’s why we were so pleased to come across the recent findings that more UK employees now have a workplace pension than ever before.
According to new research by the CIPD, workplace pensions are on the rise, and thanks to auto-enrolment, around two-thirds (66%) of the UK workforce are now saving for their retirement through a workplace pension scheme – that’s up a staggering 21% from 2010!
However, this is causing some difficulties for employers who are feeling the impact in terms of cost. The same survey found that nearly three-quarters (70%) of employers who have gone through the auto-enrolment process are now under financial strain as a result.
In order to counteract the costs to their business, one in five employers (21%) reported lower profits, while a respective 10% had either reduced or frozen wage growth, or found ways to reduce other elements of their workers’ pay. A further 15% paid the minimum rates required under the auto-enrolment rules.
With other changes set to come into force – such as the National Living Wage in April and the Apprenticeship Levy in 2017 – employers are clearly worried about taking the financial hit from new employment laws.
The CIPD is now advising that one solution to the problem could be improving employee productivity to help offset additional costs. According to the report, even small organisational changes that help to boost productivity – such as redesigning jobs or offering flexible working hours – could have significant long-term effects.
Of the 32% of employers who increased salaries by 2% or more last year, 8% put their ability to do so down to productivity improvements. Yet despite this, just 12% of employers and 8% of small businesses have any measures in place to review and improve their staff’s performance.
Charles Cotton – a Performance and Reward Adviser at CIPD – explained that while these steps may seem marginal, “if employers can make enough small changes then they can really boost their productivity.
“What all employers need to do is review the way their organisation operates and identify the areas where improvements can be made, before deciding the task is too great,” he added.
Lucy Bristow has to pay workplace pensions to both our permanent staff and all our temporary staff. By their very nature, temporary staff move across different companies and agencies making the administration very onerous. If you’re an SME, we’d love to chat to you about your experience of workplace pensions, especially if you have temporary staff – how are the changes affecting you?