Improve benefits to help low earners, report urges

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Many organisations are failing to maximise the value of employee benefits for low earners, according to research from the Work Foundation

Improving fringe benefit schemes for low earners, written by the Work Foundation and commissioned by the Joseph Rowntree Foundation, assessed the market and identified more than 50 different types of employee benefits in the UK. These varied from offering increased job security, flexibility, or discounts on household essentials to lifestyle perks such as sporting or recreational facilities.

It found that benefits relating to food and leisure, travel, childcare, housing and utilities were the most valued by low earners, as well as those that provide financial education and support. While businesses recognise employee benefits are a vital attraction and retention tool in the global race for talent, they aren't fully aware of the value of benefits such as the above to low earners, it stated.

The report added that basics such as a uniform, equipment, training required to do the job, pension and insurance schemes and flexibility should automatically be given to employees.

With high levels of in-work poverty, attention has shifted towards how the quality of work can be improved. It is estimated that in 2015/16 out of the 13.9 million people living in poverty in the UK 22% were in work, and half of these were working families.

The Work Foundation report coincides with an announcement from the government that The Government Equalities Office will shift its approach from getting more executives into the boardroom to unemployed and low-paid women.

Speaking at the Women in Work conference, women and equalities minister Penny Mordaunt announced that policies will be aimed at removing the "multiple barriers" to working women, citing the fact that women are three times more likely to work part-time and are disproportionately represented in poorly paying sectors.

She announced that ethnic minority groups such as Bangladeshi women will be targeted because their employment rate is three times lower than that of white women.

The Work Foundation employee benefits report pointed employers to a ‘framework of good practice’ that outlines seven steps to maximise the value of employee benefit schemes for low earners.

Heather Carey, deputy director of the Work Foundation, said that benefit schemes are an often-overlooked aspect in improving life for low earners. “Improving wages will always be vital to tackling in-work poverty, but there are other steps businesses can take to improve working practices and lend greater support to low earners," she said.

"Employee benefits can be extremely valuable – particularly schemes that help to mitigate living costs. But despite rapid expansion of the employee benefits market our research finds that many employers are failing to maximise their value for low earners, which is bad for employees and bad for business,” she said.

Carey added that improving employee benefits could boost businesses as well as improve staff morale. “It’s so important that employers recognise the business benefits these can bring – the firms embracing fringe benefits are reaping the rewards of better employee engagement, productivity and performance as well as having happier staff.”

Louise Woodruff, policy and partnerships manager at the Joseph Rowntree Foundation, said that businesses can play a role in helping to fix in-work poverty. “It's not right that 3.7 million workers live in poverty. Businesses can help right the wrong of in-work poverty by making sure their fringe benefits schemes help with the cost of living for their lowest-paid employees," she said.

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