Foster Denovo envisages the market will continue to experience similar challenges in the first half of 2010, and employers are going to be continually working to keep costs down.
However, as next year progresses, Ian Bird, senior partner at Foster Denovo, believes things will improve, and that there will be a level of growth towards the end of 2010.
Bird said: "Employers who spend money putting staff into new schemes also need to think about how they effectively communicate these benefits.
"Often, this aspect is ignored, and the time and effort spent placing the member of staff into the scheme can be wasted. Effective employee benefits are down to communication, education and understanding - for everyone concerned."
Reviewing 2009, Bird comments:
• We have seen employees sticking with their employers throughout the recession, and - as a result - there has been little movement in the membership of benefits schemes. Throughout 2008-9, Foster Denovo has witnessed a 40% decrease in new joiners to pension schemes.
• Companies across the UK were also forced to make a raft of redundancies, which had a knock-on effect, in terms of the number of people having to leave plans.
• This was also the year that health plan providers saw an increase in the number of people making small ticket item claims on health plan policies, which had previously remained untouched.
Looking towards 2010, Bird offers the following predictions:
• I think we will see a sharp spike in redundancies at the beginning of 2010, following the 2009 trend. For example, I envisage a lot of retail organisations being forced to lay off staff, after Christmas.
• Towards the end of next year - we will begin to come out of the recession, but the full recovery won't come until well into 2011.
• Employers will be budget-orientated in 2010, and will continue to work towards keeping their costs low.
• Employers will also begin to recruit again as we enter the third and fourth quarters of 2010. And, where we do see movement, this will result in new joiners to pension schemes.
• I am unsure as to whether people will feel confident enough to move jobs. If we don't begin spending next year, then this will inevitably lead to further redundancies.
