Jobseekers like employers with good pension schemes
Weighting an employee benefits package towards pension contributions can make a role more attractive to high-quality candidates, a new report* has found. The findings stand in contrast to a prevailing narrative of employee disinterest in workplace savings and highlights that candidates are looking for good pension schemes.
Aiming to help employers improve the calibre of applicants responding to job adverts, the research found a lack of attention to existing evidence on what makes roles appealing.
Pension Benefits are appealing to prospective employees
Any mention of pension benefits was appealing to prospective employees. This made roles around 8 per cent more attractive. Showing contributions as a percentage of salary seems to be the simplest and most effective way to demonstrate the benefit on an advert as there is only so much space in an advert to give to pension benefits.
If recognition of the effectiveness of this tactic became widespread at employer level, the result would be a trend towards increased pension provision in reward packages. The wider benefits this would bring would help in tackling the UK’s under-saving crisis. The research shows that individuals are happy to accept less salary in return for better pension provision and this could spell good news for auto-enrolment.
With minimum contribution levels set to rise next year, concerns have been raised that opt-out rates will begin to go up. The research seems to contradict this, although the responses may be more relevant to “white collar” workers.
Contribution inadequacy is the “elephant in the room” in auto-enrolment discussions, encouraging employers to increase contributions at the expense of salary could be a useful consideration, provided people retain the ability to opt out.
* Hymans Robertson’s ‘Science of Attraction’ study, undertaken in partnership with the London School of Economics. https://www.hymans.co.uk/media/uploads/The_science_of_attraction.pdf