A survey of financial directors has found over a third of businesses will continue to increase their budgets for employee benefits.
The polling of Incisive Media's Financial Director readers, carried out for Unum, also found more than half (54%) are freezing their budgets while only 12% will cut.
The results suggest companies believe they need to motivate staff through benefits such as pensions, bonuses, private health care, income protection, cars and gym membership.
However, Unum commented that, with many facing increased outgoings in this area, at the same time as being pushed to reduce costs, firms will need to restructure all spend in this area.
Peter O'Donnell, Chief Financial Officer at Unum, said: "For example many employers offer life insurance as part of their benefits package, yet an employee is three times more likely to suffer a long-term illness than to die while of working age.
"Now is a good time to review what they offer to ensure the benefits they provide match up to the needs of today's workforce, providing the most effective balance between cost and care."
Of those polled by Financial Director just one quarter said their employee benefits had been reviewed in the last three years. A whopping 75% said they had not conducted a reassessment review beyond a simple rate review.
The survey indicated that a huge majority of the respondents approached the job of constructing employee benefits packages with an overwhelmingly positive attitude. Just 13% said their aim in providing benefits was simply to meet the legal minimum.
The rest went for aims that suggested they were looking to improve conditions for their staff and the performance of their companies. But ultimately, finance chiefs are predominantly driven by cost savings and remaining competitive.
In terms of individual benefits income protection insurance proved popular with those who use it saying it was mostly provided to "all staff" in their companies. Almost a quarter said it was a "direct" benefit to their companies as employers.
Despite this relative success, almost three quarters (74%) of respondents said their companies did not provide it. Among them almost one in two (47%) worried about cost and more than a third (38%) cited a lack of employee demand as the reason for its absence.
Perhaps more worryingly, a fifth said they did not provide protection because of a lack of awareness about the product.
O'Donnell said: "This confusion is undoubtedly a barrier to growing the protection market. At Unum we are addressing this misconception in a major campaign to educate employers and employees, showing how income protection is a back-up plan against long-term illness and injury."
