Last year, Adair Turner revealed a pensions shortfall amounting to £57 billion a year; compulsory saving has been touted as one solution to plugging this gap.

And according to thomsons online benefits most bosses accept that contributing to workers’ pensions will become a reality in the future and five it would seem is the magic number – the average percentage of payroll contribution awarded by employers.

Their study of 430 firms reveals that changes are already occurring.

While fixed benefits continue to be the option of choice for 60.7%, the findings show that the number of companies with a flexible benefits scheme in place has doubled over the last year to 10%.

Attitudes to flexible benefits are also changing with almost half of respondents saying their employers would or do value from them over and above standard benefits.

Forty two per cent have taken it a step further and are considering implementing flexible options.

Employers with standard benefits are admitting that their greatest concern is that the programmes they have implemented aren’t sufficiently valued by employees (38.5%).

Of the employers that have introduced flexible benefits, four out of ten report that it has assisted their recruitment and improved their employee retention rates.

Despite looming pension simplification legislation most businesses say their biggest concern is communicating their benefits effectively and controlling costs.

Other ‘reward’ findings include:

• The majority of respondents intend to award a pay rise in line with inflation this year and give a bonus




• A fifth of respondents don’t know the average length of sickness absence in their business;




• Most of those quizzed report to having received a request for flexible working since April 2003 and have accepted the majority




• Despite this the majority of respondents still provide just the statutory legal minimum requirements for family friendly policies.




• Paper-based systems are still the most commonly used method to administer benefits overall, but specialist web-based employee benefits software is becoming standard for flexible benefits administration




• The tax changes around childcare vouchers are making many organisations consider their introduction




• Four out of ten respondents are considering introducing a salary sacrifice driven benefit in 2005

Michael Whitfield, managing director of thomsons online benefits comments:

“The results of Employee Rewards Watch 2005 demonstrate that the spread of flexible benefits in the UK is finally living up to the hype. This is largely due to the fact that the cost of web based technology has reduced and its ability to mass produce benefit administration makes flex an affordable option even for SMEs.”

Whitfield explains that a shift away from paternalism towards a culture of employee ownership for their own decisions is occurring in which workers choose their package and working patterns according to their own lifestyle.

“There is also an increasing trend towards the introduction of more lifestyle orientated benefits such as flexible working, childcare vouchers and the home computer initiative.”

A free copy of Employee Rewards Watch 2005 can be obtained by calling 020 7802 5855.