Law firms are offering a wide range of generous benefits that make up an increasingly important part of the overall compensation package on offer to employees. This is one of our findings from our recent survey into Employee Benefits, which polled firms on the many benefits they offer to staff, from pension contributions to enhanced maternity pay and carer’s leave.
In today’s candidate-driven market, we have noticed firms competing hard on salaries to secure the best candidates. But we also know that steep salary rises can only last so long. In addition, times have changed and more candidates are choosing their next roles on the basis of much more than salary alone.
Benefits packages will become ever more important as firms not only seek to secure and retain talent but also to reinforce their brand reputation as employers of choice. Benefits that help support employees through difficult times, support stability and enhance day-to-day life are increasingly seen as vital components of a good job offer.
With all this in mind, we conducted this survey to ascertain current benefits packages. The 34 firms that responded covered a wide spectrum of revenue from firms taking under £50m a year (38%) to those taking over £201m a year (21%). The following represents a few of the highlights.
A spectrum of benefits
Not surprisingly, today’s professional services firms offer a wide range of benefits (see figure one), with all respondent firms offering life assurance / death in service, pension contribution and employee assistance programmes. None as yet offer electric car leasing, but three firms said they are in the process of signing off schemes, which are due to go live in April 2022. Only one firm offers a different benefits package to business services professionals.
Figure one: Benefits currently offered
The majority of firms (79% and over) provide life assurance / death in service cover at four times an employee’s annual salary. The next most common cover is three times annual salary, with just two times annual salary the least likely level of cover on offer.
A 5% pension contribution, meanwhile, is clearly the favoured option, chosen by over 60% of firms at all levels of seniority. Only 9% of all respondent firms offer just the statutory 3%.
In terms of annual leave, 25 days seems a particularly popular option for most firms for below Manager up to Director level. But it’s notable that at Director level, 44% of firms offer 30 days or more (see figure two).
Figure two: Contractual annual leave days provided (not including bank holidays)
In additional information given to this question by respondent firms, 47% of firms provide higher levels of annual leave based on length of service. Offers include: an extra day for every five years; additional days up to a maximum of 27 days or 29 days; additional days for every two years of service; and an additional day for every five years’ service up to a maximum of 30 days.
Maternity and paternity
Turning to maternity and paternity packages, the majority of firms (55%) have a one-year minimum amount of service before employees can qualify for enhanced maternity pay. A further 24% stipulate two years for this, while 18% require just six months.
Nearly half of firms (47%) offer shared parental pay (SPL) that is equal to maternity pay – receiving that pay in accordance with when SPL is taken over the course of their partner’s maternity leave (for example, week 10 – full pay; week 30 – SMP only). For 21% of firms, the SPL is equal to maternity pay, regardless of when the SPL is taken (see figure three). In addition, most firms (71%) offer two weeks of paid paternity leave, although just under a quarter (24%) offer four weeks’ paid leave.
Figure three: Shared parental pay policy
New legislation – Carer’s leave
Government changes to carer’s leave will give employees the legal right to five days’ unpaid leave a year to carry out caring responsibilities. But it is comforting to see that the vast majority of firms are already offering such leave with a third (33%) going above the statutory minimum to offer between one and five days’ paid leave (24% already offer five days’ paid leave for caring duties). A further 39% either have no formal agreement on this as yet, agreeing arrangements on a case-by-case basis, while 18% are undecided. These figures may well change as new legislation comes in, however.
While firms may have different approaches to benefits in areas like maternity pay and carer’s leave, they are largely in accord across many benefits, offering packages well above business-wide norms. This will be increasingly important as candidates continue to choose new roles on more factors than salary alone. Benefits will also be seen as an important indicator of a firm’s values and ethos, representing its attitude to the wider world in the way it protects employee interests.
At a time when many firms are putting environment, social and governance (ESG) issues centre stage, benefits packages offer an effective tool for firms to further demonstrate their concern for employee wellbeing as well as show a real sense of purpose.
If you would like to know more about this employee benefits survey or other pieces of Totum research, completed or planned for 2022, please contact [email protected]