Employers take action on key employee benefits

As the Employment Rights Bill progresses through Parliament, employers are already taking steps to improve employee benefits, particularly in areas such as sick pay, paternity leave, and family-friendly provisions.

The Maternity, Paternity and Parental Leave and Pay report  by Incomes Data Research (IDR) indicates that 62 percent of organisations with enhanced paternity pay policies provide two weeks’ full pay, while 12 percent offer four weeks’ full pay.

However, just 14 percent currently enhance parental leave. Meanwhile, 36 percent of organisations have improved maternity pay provisions or are considering doing so. Across the economy, the median value of occupational maternity pay is 19.5 weeks’ pay.

Sick Pay, Pensions, and Holiday

On sick pay, the Employment Rights Bill proposes removing the three-day waiting period under the statutory sick pay scheme and extending entitlement to lower-paid workers. Many employers already exceed statutory requirements. IDR’s Sick Pay report found occupational sick pay typically equates to 6.5 weeks’ full pay during an employee’s first year post-probation, increasing to 26 weeks’ full pay for those with five years’ service.

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“That said, there is considerable variation between sectors,” says Katherine Heffernan at IDR. “Those working in the private services sector fare worst, typically receiving a maximum of 12 weeks’ occupational sick pay after five years, compared with 39 weeks in the public sector, 26 weeks in manufacturing and 19.5 weeks in the not-for-profit sector.”

Other benefits being reviewed are pension provision and holiday entitlement. According to IDR’s Benefits Handbook, the average employer contribution under defined contribution pension schemes stands at 6.7 percent, more than double the statutory minimum of 3 percent. Holiday entitlement for non-managerial staff averages 32.2 days, including eight bank holidays, increasing to 33.5 days for managerial roles.

According to Zest’s latest Employee Benefits Report, only 39 percent of employees believe their current benefits package offers good value for money – and almost six in ten (56 percent) employees are willing to leave their current job if offered a better benefits package elsewhere.