Auto-enrolment has prompted some firms to overhaul their entire benefit offerings as they look to integrate the government-backed pension scheme into their reward packages, JLT Employee Benefits has said.
A JLT survey of 250 companies found auto-enrolment process had encouraged employers to review the way they deliver benefits, rather than only using narrow definitions of salary.
More than half of those surveyed (59%) said they have now offer full flexibility on their employee benefits, which also include life and private medical insurance, as part of the transition to auto-enrolment. A further 12% indicated they would be introducing flexible benefits for all employee benefits in the future.
Nick Boyton, JLT Employee Benefits principle, said: 'As the economy gains momentum, employers are conscious they must now look at different ways of differentiating themselves in the battle for talent, rather than simply offering larger pay packages.
'They also actively communicate on auto-enrolment and benefits to ensure they are understood or appreciated by their employees.
'However, unsurprisingly many employers are only happy to do so provided they breakeven in spending terms. This is why government incentives can have a substantial influence on benefit offerings.'
However, the survey found that cost saving was not the main motivation for employers to review benefits at the same time as the auto-enrolment implementation. Only a very small minority (6%) of respondents removed the link between additional benefits, such as insurance schemes, in order to reduce costs.
Also, a majority of employers said they strive to ensure employees understand, appreciate and value the benefits on offer to them, because of their high cost. More than half - 55% - said they ensure employees are aware of benefits and 45% said they make sure they value them.