Credit crunch makes cash better than employee benefits

The credit crunch means that more employees would now prefer to receive extra cash than additional workplace benefits, an expert explains.

When people are struggling with increased household expenses and debts, many would prefer money to employee benefits, according to Peter Reilly, director of HR research and consultancy for the Institute of Employment Studies (IES).

If people are having problems paying everyday bills, he says, then ‘giving them gimmicks is neither here nor there’.

Reilly encouraged the use of flexible benefit schemes to suit all employees.

He explains one such system: ‘People can sacrifice an amount of pay for additional leave, which might be attractive to a 21 or 22-year-old who wants to travel a bit more, whereas somebody who is trying to pay their mortgage might want the money.’

Inflation is also causing problems for workers, he says, commenting that unless pay follows levels of inflation then people ‘will feel more out of pocket’.

According to jobsite.co.uk, employee benefits packages – for example healthcare or company car – offer ‘sweeteners’ to attract and retain the best job candidates.

 

Adam Wayland

Adam Wayland

Adam was Editor of SmallBusiness.co.uk from 2006 to 2008 and prior to that was staff writer on sister publication BusinessXL Magazine.

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