Gotta pick a package of perks

Pre-Budget special: expectation and frustration. What businessmen want from the Chancellor

COMPANY cars are no longer considered the employee perk they were, as increased taxes and changing priorities in society alter employee perceptions of corporate benefits, says a survey by Coopers & Lybrand to be published this week. Only 10 per cent of people polled chose a car as a favoured benefit, signifying a "massive decline over the past five years".

The survey is to be released on the eve of the Budget, which is expected to contain measures raising taxes on company perks.

The majority of employees - 72 per cent - want the opportunity to pick a benefits package, which could mean swapping benefits such as a pension for cash or extra holidays, interest-free loans and free car parking.

"It is essential that companies keep abreast of the changing trend in benefit drivers," said Martha How of Coopers & Lybrand Human Resource Advisory Service. "A company's benefit packages give the employer an edge in recruiting and retaining the best staff. They can also help create an enthusiastic and motivated workforce."

Of all benefits, contributory pensions were favoured by 36 per cent of the 1,000 people polled. Pensions were slightly more popular with men: women tended to opt for private health schemes. In total, 18 per cent said they would opt for private health insurance as their preferred benefit. The attractiveness of a company pension increased with the employee's age: 42 per cent of over 55s said it was their favourite perk, compared with 24 per cent of under 24s.

Benefit scrooges among employers can take some heart: only 31 per cent of people knew the value of their perks, even though they can represent between 10 and 20 per cent of salary. More than 60 per cent said they were not motivated by the benefits they received.

"The majority of companies understand the importance of the packages they offer - on average up to 20 per cent of payroll costs are spent on employee benefits, but it seems they are not providing employees with what they want," said Ms How.