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Cost concerns driving shift in employee benefits, survey says
Intensifying cost concerns are driving Irish employers to focusing on maximising value in employee benefits, according to the benefits trends survey carried out by consultants WTW.
The survey found that 39 per cent of employers in Ireland are 'reallocating spend' in response to rising costs to get more value from spending on benefits such as pensions, health insurance and financial wellbeing programmes.
This drive has led to the number of employers focusing on getting more value from vendors and service providers to rise to 56 per cent, and nearly two-thirds, 61 per cent, of Irish employers regard the increasing cost of benefits as a key business issue.
Orlagh Farrington, the head of health and benefits Ireland at WTW said cost concerns are 'impacting businesses across Ireland' which she said is 'certainly evident' in their approach to the cost and value gained from employee benefits.
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More than half of employers, 56 per cent, are looking to improve the value of their benefits spending or are eyeing a switch to better-value vendors across health, retirement and risk benefits and 15 per cent plan to increase employee contributions to retirement plans.
Ms Farrington said the benefit trends survey shows that employers are seeking to find a balance between 'prudent expenditure with ensuring an offering that can attract and retain talent'.
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Among Irish employers, 61 per cent are aiming to expand benefits choice over the next three years, with the research showing they are 'becoming more aware of purpose and values, and wellbeing, in shaping their benefits packages,' she said.
'For example, in 2025, 27 per cent of businesses would describe their employee benefits as values driven, 29 per cent as employee wellbeing focused, and 44 per cent as market competitive.'
That focus is set to 'evolve', she said, with the results pointing to companies shifting their focus towards benefits driven by values.
The survey suggests that 41 per cent of business said their benefits will focused on value in the next three years, 44 per cent suggested their focus will be on wellbeing and just only 15 per cent said they would focus on market competitiveness.
'Overall, this evolution is one that indicates a strategic focus not only cost but also on future competitiveness,' Ms Farrington said.
Almost half, 46 per cent, of employers in Ireland view mental health benefits as a priority area, the survey suggested. Additionally, 34 per cent of employers prioritise retirement benefits, with 29 per cent and 27 per cent focusing on financial wellbeing benefits and health benefits respectively.
