5 Things The Employee Benefits World Taught Us This Week – May 29th
We like to keep you updated on the latest employee benefits stories; here are this week’s top five news items.
1. New Parliament Will Strive To Support Workers
On May 27th the Queen set the tone for the next parliament in her State Opening of Parliament : the focus will be on the UK membership to the EU and power transfers to Scotland. More immediate issues, however, have been raised as well. They largely concern the workplace.
The new government indeed intends to follow up on their election mantra: to be a party looking out for the interests of hard-working people. To fulfil that promise, several measures have been floated by the Tories. The most controversial of which, perhaps, is their proposal to cap benefits for youngsters on the dole, thus incentivising them to find a job or learn new skills in order to get an apprenticeship or job. Another measure in the works intends to freeze income tax, VAT and national insurance contribution increases for lower earners in order to buoy their living standards. More free childcare has been promised in order to further support workers juggling between demanding jobs and equally demanding family life, though no concrete plans for such move have been announced. Finally, the new government have renewed their commitment to free healthcare, which is seen as essential in order to support a healthy (hence productive) workforce.
All of that will happen in the backdrop of the EU referendum and power devolution to Scotland which will unmistakably impact UK businesses in their own way.
2. Bosses Salary Increases Should Be In Line With Their Workforce’s
Sacha Saden, Director of Corporate Governance at Legal & General Investment Management called British executives to align their pay rises with of their workforce in a blog post earlier in May. The rationale, Saden argues, is that theses corporations fail to explain how the disproportionate salaries help the long-term strategic goals of their companies. Saden is therefore fully supportive of these top executives choosing to match their pay rise with that of their workforce. The point made by Mr. Saden echoes Mr. Piketty’s who questioned in his controversial book “Capital in the 21st Century” the effect of big salaries on productivity gains. According to Piketty, they would be marginal to non-existent.
3. American CEO Pledges To pay For His Employees’ Kids’ College Education
Chieh Huang is the CEO of New-York based Boxed, a 100-staff delivery company. In order to ensure his employees’ satisfaction, Mr. Huang set up a not-for-profit fund destined to fund his employees’ children college tuition fees. Already £1 million was invested in the fund and the CEO advised his employees to chip in as well. The move was motivated by Huang’s belief that education is the bedrock of a happy and successful life. He also sees it as a necessity: as tuition fees sky-rocket in America, only initiatives such as these can guarantee the upward social mobility of future generations of Americans. Boxed’s trust fund is one example among many other initiatives undertaken by American companies ranging from Starbucks to Fiat Chrysler that, in their own ways, promote education or further education within their workforce. What is certain is that the trend is set and will probably prove to become a major company perk in the years to come.
4. Living Wage Is Good For Your Firm, Your Employees And Our Economy.
A Research commissioned by the Scottish Government and carried by the University of Loughborough and Ipso Mori have concluded that employees on Living Wage work harder and declare to be happier overall. The Living Wage is defined as the minimum amount a worker needs to meaningfully participate in society . The research also found that firms paying the Living Wage experience a 0.3% fall in overall wage costs. On the macroeconomic scale, it is estimated that if the scheme were to be adopted by the majority of firm, the windfall for public finances would be in the neighbourhood of £1.5 billion. Scottish firms are already great users of the scheme, with 200 registered users. Politicians view in that an opportunity to further boost a buoyant British economy and therefore call on all companies to follow the example set by the early adopters of the scheme.
5. Britain’s Coolest Office
It isn’t Google. The contest’s winner is rentalcars.com. The company spared no expenses: £2.7 million were invested in office refurbishment in downtown Manchester. The office is in this instance a derogatory term for playground, thoroughly fitted with game rooms, flat screen TV’s and coffee bars. This refurbishment is the pride of the company’s CEO, Ian Brown. To him, this symbolises Rentalcars.com’s spirit. As he put it: “At Rentalcars.com we're proud to be 'anything but ordinary' and we wanted a new office space that would really reflect this ethos and the diversity of our team. That's why we invested so much time and money in creating an office space like no other in Manchester.”