Employees willing to forego salary for improved pension provision: Survey

Other attractive benefits include financial protection, company-sponsored savings plan, educational course
|hrreporter.com|Last Updated: 12/07/2010

Pensions rank as the single most important benefit employees would swap for cash in their pay packets, according to Aon Hewitt’s European Employee Benefits Benchmark Survey.

More than 50 per cent of employees surveyed in Belgium, Denmark, France, Ireland and the United Kingdom would be willing to forego salary for improved pension provision when considering a new job. Only Dutch employees saw limited attraction to this benefit, with fewer than 27 per cent saying they would be willing to exchange better pensions for salary.

The results of the survey of more than 7,500 people in Belgium, Denmark, France, Germany, Ireland, The Netherlands, Norway, Spain, Switzerland and the U.K. were contained in the report Employee Benefits: Getting the Mix Right.

As Europe begins to emerge out of recession, it’s important for employers to have well-tailored benefits packages, said Aon Hewitt. In eight of the 10 countries, more than 30 per cent of respondents intend to look for new jobs over the next six to 12 months — with 50 per cent in the U.K. and Ireland.

On average, 30 per cent of employees in the countries surveyed receive pension contributions from employers that exceed six per cent of their salaries, with generosity more common in Denmark, Switzerland and the U.K. but less common in Spain (though the state pension provision is relatively generous), said the report.

The second most attractive benefit is financial protection, with more than one-third of employees willing to exchange pay for improved levels of protection against illness and injury. This was most noticeable in Ireland, where nearly 54 per cent of employees said they would be attracted by such a benefit, and in Belgium where the percentage was 43 per cent.

While about 28 per cent of employees believe their current employers would continue paying them for one year or more if they contracted a long-term illness, a high proportion of employees did not know whether their employers provided long-term illness cover — including 70 per cent of Spanish employees and 50 per cent of employees in France, Norway and Denmark.

More than one-quarter of employees would be willing to exchange salary for a company-sponsored savings plan, which “may reflect increasing levels of dissatisfaction with the global banking industry after the financial crisis, a willingness to participate in employers’ equity or perhaps recognition that companies might enjoy better deposit rates than individuals and could pass this benefit on to staff,” said Employee Benefits: Getting the Mix Right.

Additionally, 22 per cent of employees would sacrifice some pay in exchange for an educational course of their choice, ranking that above child-care services, and more than 30 per cent of employees in Germany, Ireland, Switzerland and the U.K. found this an attractive proposition. It was least attractive in France, the Netherlands and Norway.

The least favoured options were company-supplied mobile phones, provision of sporting or entertainment days twice a year and home cleaning or ironing services.

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