Chancellor’s statement highlights need for better employee support

Arguably the biggest talking point from yesterday’s Spring Statement was additional cuts to the UK’s welfare budget.

Although widely expected, the Chancellor announced changes to financial support such as Universal Credit and Personal Independence Payments with the Department for Work and Pensions later stating that over three million families would be impacted by these welfare cuts by 2030.

Clearly, in such an economic climate, employees need support and they are demanding more from their employers.

Eight in ten (79%) employees want their company to invest more in improving employee benefits. Three quarters (74%) of all employees are specifically calling for more financial support – jumping to 83% of young professionals.

Almost four in ten (37%) businesses have already invested more in their benefits packages over the last 12 months but employees want them to go even further.

If organisations are going to ensure they can retain key talent, remain competitive and meet future growth goals, then investment in reward packages needs to be a focus over the next few months.

Construction firms cement position of growth

Although the Chancellor’s announcement focused on the wider economic situation, there were winners and losers.

The construction sector is likely to be quietly pleased with the announcement.

The OBR  predicted that housebuilding will reach a 40-year high, hitting 305,000 homes a year by the end of the forecast period. This would deliver 1.3m homes over the next five years, close to the manifesto promise of 1.5m within this parliament.

The signs point to the construction sector as being one of the UK’s key high-growth industries. There has certainly been economic confidence amongst construction firms – the sector has seen the most investment in benefits packages over the last 12 months with half (48%) of businesses saying they’ve increased investment in employee rewards, higher than any other industry.

The sector has also been in buoyant mood in terms of future growth. Just 7% of construction firms have had to freeze hiring over the last 12 months, one of the lowest rates of any sector.

HR leaders in the sector seem to understand that investment in talent is one of the key drivers of economic growth, both as an organisation and for the UK more widely.

Hospitality businesses under increasing pressure

Unfortunately, there are also sectors who will be hugely disappointed with the changes announcement – or lack of them.

For the hospitality industry, the incoming spike in National Insurance Contributions is likely to be crippling. In fact, one in five (18%) of employers in the sector admit they plan to make redundancies as a result of rising NI costs and three in ten (29%) say the impact on hospitality will be worse than that suffered by other industries.

These businesses will have been desperately hoping for a U-turn on this controversial policy but to no avail.

These businesses face a challenging period where budgets will be increasingly squeezed whilst facing growing demand from employees seeking more support. Investment in benefits packages is the cost-effective solution to reward staff so it’s no surprise that 24% of hospitality businesses are planning to step up spending in this area.