Ageing employees will fuel demand for workplace benefits, but such packages will come with a higher price tag in future, a report has predicted.
The 26-page Economist Intelligence Unit report, sponsored by pensions consultancy Towers Watson, found 43 per cent of employers expect to see a flood of enquiries about workplace protection, pensions and health advice, with the same number expecting the costs of those services and products to rise.
The majority, 55 per cent, believe auto-enrolment may have kickstarted the government’s inclination to shift responsibility for providing benefits and financial help on to businesses.
A similar percentage of respondents said they needed to improve the flexibility of their workplace benefits to keep pace with these changes.
The catalyst for these changes is an ageing population that wants greater flexibility as their working lives are stretched out, the report stated.
Almost three-quarters of employers expected their number of employees aged 60 and over to rise by 2020; 22 per cent expected the increase to be “significant”.
John Ball, head of UK pensions at Towers Watson, said: “An ageing workforce creates significant challenges for employers, especially around how to control the cost of benefit provision for this group of workers.
“Employers need to recognise that the benefits they offer should be adapted to the needs of the whole workforce, regardless of age.”
Laith Khalaf, head of corporate research at Bristol-based Hargreaves Lansdown, said: “Employers have to respond by making their benefits packages sharper. This doesn’t necessarily mean increasing benefits spend – it could simply mean better communication of what is already there. Indeed, almost a third of employers think their staff don’t appreciate retirement benefits, which is best remedied by increasing employee engagement, rather than just throwing more money at the problem.”
What employers expect is most likely to happen as a result of an ageing workforce
43% – greater employee demand for benefits
43% – higher costs of benefits
35% – more flexible working
35% – young people finding it harder to progress careers
23% – greater risk of age discrimination
By Iona Bain Here