Reward Live: The panel discussed the future of benefits including what is expected to come following the National Living Wage changes.
With the first all-Conservative government for some years, employee benefits have been exposed to significant change. The keynote panel for day two discussed the future of benefits and highlighted some of the key changes that are likely to take place over the next 12 months.
Mark Childs, managing director at Total Reward Group and Nigel Keohane, research director at Social Market Foundation, discussed the government plans surrounding the increase in and mandatory use of the National Living Wage (NLW). Childs said: “One of the emerging themes is the impact that changes employers are making on their brand. A lot of them are damaging their reputation by making changes such as closing staff canteens, or withdrawing tips from waiting staff.
“They represent quite small cost saving but what they do to the culture change is disproportional in lower paid industries in particular. Employers haven’t got time to do something more strategic so it’s an impulse move and knee jerk reaction.”
During the session, Keohane also said: “The UK has a significant proportion of workers in low pay and 3.5m workers are expected to see wages rise by 2020. How will employers respond? Firms could take a hit on profits – but that won’t be acceptable long term so will they raise prices? But then we will all feel it and pay more for essentials, for example, groceries and accommodation.”
He then added as he spoke about the government shift change. “Policy is not to say that government healthcare provision is being reduced. But healthcare and eldercare cannot be supported on a sustained basis by government – there will be a need to introduce some sort of co-paid model.”
Another key issue for employers in the next year will be gender pay gap reporting. Childs said: “When mandatory gender pay reporting comes in, employers will have the opportunity to put information on their own website which will help to communicate how they are approaching gender pay gaps – but the government’s ‘league table’ approach will report looks cruel and brutal.”
Some industries, such as financial services and insurance, have gender pay gaps of over 40% , and Childs cautioned that employers will need to be ready to address this with their staff and in the wider business world when figures are reported.
Both speakers concluded that the year ahead will be a challenging one for employers. The costs of preparing for the implementation of the NLW, closing gender pay gaps – and paying for pensions auto-enrolment - could see employers in some sectors reviewing and in some cases restricting their reward package.
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