Most employees in the region would take extra holiday and invest in long-term savings plans instead of cash rewards if offered an extra £500 to spend on benefits, PwC research shows.
The survey of 218 employees in the West Midlands also revealed that 37% would prefer to purchase extra annual leave over other new workplace benefits such as discounted private healthcare and subsidised gym membership.
Surprisingly, only 20% would opt to take a discretionary bonus award as extra pay, revealing a preference among West Midlands employees for tax efficient savings. One fifth (21%) would choose to spend their bonus on five days’ extra annual leave from work, while one quarter (24%) said they would put the money in their pension, showing that when it comes to variable pay most workers are balancing short-term consumption with longer term financial planning.
Would you give up salary for greater benefits?
The importance of receiving cash over benefits increases, however, when employees are offered the opportunity to exchange 5% of their pay for a new workplace benefit. In this scenario two thirds (67%) of employees surveyed say that they would wish to maintain their cash rather than sacrifice 5% of their existing salary for any additional benefits.
With pensions and savings plans proving popular among respondents overall, the survey suggests that people do recognise the need to save for the long-term. However, few would give up a portion of their existing salary for any other benefit, suggesting that they have little room for manoeuvre within their existing reward packages.
David Wignall, partner and director of human resources at PwC in the West Midlands said:
“Despite record low inflation, many people are still feeling the squeeze and they value benefits that will save them money. Employers in the West Midlands need to understand their people and their diversity to design a reward programme that takes account of individual preference.
“What is interesting is that employees are more likely to sacrifice discretionary pay such as a bonus for additional benefits and that funding additional annual leave ranks as one of the most popular ways of using such a windfall.”
