Business perks under the spotlight

In an age of austerity, cuts and ongoing economic uncertainty, are business perks becoming a thing of the past?

Prime Minister David Cameron has warned of the pain ahead and the Government looks to tackle the UK’s massive debt. He has already warned that the combination of massive welfare bills, public sector pay and the bureaucracy that has built up over the past decade need to be addressed.

Ministers no longer get chauffeur driven cars, civil servants and MPs can no longer travel first class. And let’s not dwell on the housing expenses issue. Further down the food chain in the public sector, for most hanging on to your job is the biggest “perk” around at the moment. But in the private sector, has the belt-tightening mantra really getting through?
 
There is significant evidence of corporate perk slashing; some companies have scrapped Christmas parties, subsidised meals may no longer be on the menu, insurance company Axa recently said it was stopping free gym membership for employees and its so-called ‘fruit Friday’ was being fazed out.

In more recent years, much of the focus has been on tax breaks on benefits such as pensions, bikes-to-work schemes and childcare vouchers. The introduction of lower benefit-in-kind taxation levels for environmentally-friendly cars may be generating some employer interest around salary sacrifice arrangements for company cars. But the days of a company car on every other drive are long gone.

It certainly puts the furore by British Airways staff over travel perks into context. Many jobs come with perks, but few can rival those of the airline industry. It’s no wonder, therefore, when the airline announced just recently that it was permanently withdrawing certain staff benefits from strikers, it prompted a harsh response from the workers' union.

Not all companies are paring back to the bone on the benefits front, but the economic environment does seem to be exerting some influence over the sorts of perks on offer. In February M&S announced that it would offer staff free loft and cavity wall insulation (coincidentally as it launched a new Home Energy Service division.)

And remember that your management style has a huge role to play in the motivation of your staff. Slashing salaries, perks and bonuses is never going to endear you to your workforce, but being honest and candid with them about what is happening to the business and what you can do collectively to minimize the impact surely can’t be a bad thing.