Are poor reward packages costing financial service firms talent?

Thanks to ‘Awful April’, millions across the UK are facing increased bills.

In London alone, households will have to pay around an additional £400 more per year owing to rises in energy, water, council tax, broadband, mobile and TV prices. These factors, in line with high inflation and the general cost of living, mean that even those working in sectors that are traditionally thought of as high paying, are seeking further support.

Two-thirds (64%) of financial services employees want more financial support from their employee benefits packages and three quarters (73%) say that the high cost of living has meant company benefits have become more important to them when deciding where to work.

And it’s not just employees, April is presenting financial challenges for businesses too. Changes to employer National Insurance announced in the Autumn Budget last year will be implemented this month; businesses will have to pay an additional 1.2% more in contributions, while increases to the National Living Wage will also raise costs for many.

More broadly, import tariffs introduced by US President, Donald Trump, have caused major economic instability worldwide, making future business planning even trickier than before.

Against this backdrop, Zest partnered with Opinium to survey 2,000 UK employees and 872 HR decision makers across various sectors (including 100 working in financial services) to examine what workers are expecting in terms of wider support and benefits, and what their employers are offering in this economic climate.

The research found that nearly four in ten (37%) financial services firms in the UK now say they are struggling to keep up with competitors who are raising salaries – nearly double the average across all sectors (19%) and the highest of all surveyed.

In lieu of salary increases, it’s clear that financial services firms need alternative, cost-effective approaches to ensure that their workers remain satisfied, engaged and motivated amid an unstable economic landscape; something that can be partially achieved through employee benefits.

Zest’s latest report – Are financial services firms losing talent through poor rewards packages? – takes a deep dive into the disconnect between financial services firms and their employees.

Three quarters of those working at financial services firms think they get good value for money from their benefits packages, the highest across all sectors surveyed. However, only half use the full range of benefits on offer, showing that clearly, there’s work to be done.

As financial services firms struggle to keep up with competitors who are raising salaries, and with workers in the sector increasingly likely to leave their current job if another company offered them better perks, getting employee benefits right has never been more critical.

Read the full report.