Arrangements by sector
80%
70%
60%
50%
40%
30%
20%
10%
0
Releif at source
Net pay arrangement
Salary sacrifice
n Private sector
n Public sector
n Non-profit / charity
When the data is broken down by sector, salary sacrifice stands out as the preferred method for all employers. However, the private sector accounts for a large portion of employers offering relief at source arrangements and the public sector has a bias towards net pay arrangements. Where salary sacrifice is offered, an average of 69% of employees are enrolled into such a scheme. This figure may be higher if this arrangement didn’t have NMW implications. Over 62% of respondents also advised they pay more than the minimum AE percentages. Paying more than the minimum enhances a company’s benefit package and can increase attraction and retention rates. This could be used as a tool to attract new employees where the base salary may not be as competitive when compared to that offered by others within the industry. The CIPP recommends promotion of pension contributions if they’re higher than the minimum AE requirements, to highlight this is a benefit of working for the organisation. Other employee schemes As financial well-being and awareness become larger talking points, employers may feel the need or obligation to offer other incentives and benefits to employees. Last year, 18% of employers offered savings or borrowing through the payroll, this was up to 22% this year. However, the proportion of employees who utilise such a scheme was down from an average of 25% to 18%. It’s positive more employers are offering such schemes, however employee awareness needs to be increased alongside to encourage uptake. Other schemes indicated were additional voluntary contributions, individual savings accounts, save as you earn and non-contributory pension schemes. A new question this year asked if employers offer payroll giving to be deducted through the payroll, allowing charitable donations to be taken. 45.5% of employers do, which is a considerable percentage. The same percentage don’t offer this, but 9% plan to in the future. The CIPP is also interested in exploring the trend of earned wage access, a process where employees can access wages ahead of the normal payroll schedule. This has proven to be a divisive and contentious issue, and only five employers indicated they offer this to employees. The CIPP will explore this further as more employers investigate this space.
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