Recruitment and retention are entering a new phase where cost control is paramount.

"Companies are scaling back provision of softer benefits and employees are now really valuing benefits that can save them money by using group rates or minimising National insurance Contributions,” said Gareth Ashley-Jones, Aon’s Head of Flexible Benefits.

Ashley-Jones was commenting on the publication of the 2009 Aon Flex Tracker, which measures and compares the take up in flexible benefits from 2008 to 2009 and ranks benefits in order of popularity.

He said: “It is very noticeable that the balance that companies face between containing costs through robust benefits management and providing subsidised employee benefits to help aid recruitment and retention is entering a new phase.”

Flogging off leisure to pay the bills
Based on companies ranging from 100-10,000 employees across all sectors, the tracker showed that holiday trading, where staff buy or sell allotted holiday allowance, has become a more popular option, up by 21%.  The proportion of staff selling holiday has nearly doubled in 2009 – up to 35% from 20%. Despite the increase in holiday selling, there were still significantly more people buying holiday than selling it, illustrating that leisure time is highly valued. 

Pensions remain the most popular benefit, with 78% of flex scheme members selecting the benefit, followed by private medical insurance at 45% and then holiday trading at 21%. There has been a growth in the voluntary insurance benefits including Personal Accident, Critical Illness and Travel Insurances during the year and fewer people have been changing their level of private health insurance cover.

Ashley-Jones said that, “growth in voluntary insurance benefits and fewer people changing their level of health cover could be due to the financial value provided to employees by way of group policies as well as the ease with which cover can be taken out through flexible benefits.”

Health and well-being taking a hit
Despite increasing travel costs the government’s cycle to work scheme remains well down the list at only 1% take-up. Aon attributes this to lack of storage and showering/changing facilities in the workplace.

The recession has seen a reduction in the take-up of initiatives such as wellness/learning accounts which have now fallen out of the “Top 15” benefits since 2008. Take-up of Health Screenings on an unfunded basis has also fallen to a low of 0.5%.  Similarly, take up of the tax free Mobile Phones benefit plummeted to 0.02% and resulted in a major provider pulling out of the market place in 2008.

“It is thought that the significant decline here is due... to employee’s perception of this being a luxury item during the recession and by the pace of price and technology changes in the High Street which is consistently driving down costs and improving value,” explained Ashley-Jones.