The Evolution of Employee Benefits

By Zest on 

The beginning of the employee benefits system can be traced back to the Roman times but it wasn’t until the last century that any kind of benefit became a legal requirement and since then it has exploded.  It was twenty years ago that the Maternity and Paternal Leave Act gave up to 52 days leave to new mothers, up until 1975 women could be sacked when they became pregnant.

Anyone in full or part time work today will be benefiting from statutory holiday, sick pay and maternity leave as a minimum, but it’s true to say that over all we are better off than our great grandparents.

You just have to look at the evolution of work place benefits to see why.

1. It began with the Romans

Evidence suggests that as far back as Roman times a type of employee benefit existed albeit in a slightly dark form.   Burial clubs were established amongst workers to cover the costs of funerals and financial support for remaining family members. Today many companies offer a death in service benefit, an un-taxed lump sum for your family if you die whilst in employment. This is probably more appealing than saving for your own funeral!

2. Pensions and social security

There were various types of schemes that encouraged workers to save for when they were too old or sick to keep working, but the first legal state pension was introduced in Britain with the National Insurance Act of 1946 under the Labour Government.  Prior to that in 1935 Social Security had been brought in.

Over in America, though, the American Express Railroad Company introduced the first private pension plan in 1875.

3. Holidays with Pay

In 1938 the Holidays with Pay Act was passed and meant that people who were in paid employment were entitled to paid holiday.  Those workers whose minimum pay was set by a trade board were allowed one week, those in other companies were allowed whatever the company decided they could have.

In 1993 the Working Time Directive was introduced and included, not only 24 days annual holiday, but also a cap of 48 working hours in 7 days.  Now this has been increased to 28 days holiday.  5.6 weeks is clearly better than one.

4. Bottomless holidays

If the statutory 28 days doesn’t appeal then since the mid 1990’s companies started to introduce the ‘bottomless holiday’.  IBM was the first to introduce this followed by other silicon-valley tech giants such as Netflix.  Virgin Management decided its staff is so busy it needs fewer restrictions on time off, so it too introduced limitless holiday time in 2014.

5. Flexible working

Working around child care and housekeeping ‘duties’ has been a fact of life for women for many years, but it wasn’t until 2014 that the Flexible Working Regulations Act kicked in and meant that anyone could legally request flexible working hours.

6. Employment contracts

With all the benefits we enjoy today it may seem extraordinary to think that prior to the 1960’s there was no legal requirement for a formal employment contract.  With that came the formalised pay scale, which tailored pay rates to the specific roles.  

7. Housing and Education

Trailblazers in employee welfare were Lever Brothers and Cadbury.  Both companies provided housing for their workers with Port Sunlight and Bourneville Village respectively, they also provided education.

8.  Food and drink

Today many companies have a canteen or bar for staff, but in 1955 the Luncheon Voucher Company was formed to offer discounted meals to staff at local cafes and restaurants. Scandalously the vouchers were used as a form of payment in Cynthia Payne’s brothel in London in the 1970’s.

Now there are a plethora of creative ways to motivate employees that don’t involve buying them homes or paying for education.   Fitness is a big part of keeping the workforce healthy so gym memberships, cycle to work schemes and other activity based benefits are common.

However the principle remains the same as it always has done; a ‘fair day’s pay’ is no longer enough to entice and keep the best people.  Companies have to offer more than competitive salaries, they need to ensure employees are happy and engaged.  That’s why an employee benefits platform can be such a big part of the mix, helping to keep all employees informed about their benefits with the minimum of effort.