Benchmarking holiday, parental leave and flexible working policies for first time

30 Jan 2019

At a glance

• Vast majority of employers provide an average of 25 days annual leave (FTE)
• Just over two-thirds provide enhanced maternity pay
• Over half have received requests for shared parental leave
• Over a third have an agile working policy

The 2019 Aon Benefits & Trends survey has benchmarked employers’ annual leave, parental leave and flexible working policies for the first time. The survey shows, that the majority of employers provide around 25 days holiday annually, just over two-thirds provide enhanced maternity pay, over half have received requests for shared parental leave and over a third have an agile working policy.

Jeff Fox, principal at Aon, says:

“We’ve looked at trends in leave policies for the first time, prompted by so many requests from clients wanting to know general employer policy standards, especially for maternity, paternity, parental leave and flexible working.”

The survey shows, for example:

Maternity pay and parental leave

The results for maternity pay reveal that just over two-thirds of employers provide enhanced maternity pay. During the first six weeks of maternity pay, 80% of all survey participants enhance pay to 100% and most of those also continue to pay at 90% or 100% for up to 12 weeks. The figures tail off between weeks 13 and 26, but there are still a significant number continuing to pay either 100% or 50% of salary during this period. Beyond 26 weeks, the majority return to paying Statutory Maternity Pay (SMP) only.

As well as providing more enhanced maternity pay, organisations are looking at how they can help parents return to work, for example, through phased return to work. Only 12% of employers provide return to work payments, but Aon expects this area will receive more focus in the coming years to encourage people to return to work.

Over half (58%) of employers have received requests for shared parental leave and the majority of firms provide statutory levels of shared parental pay. However, almost 40% replicate their enhanced maternity pay provisions.

Holidays

Annual leave provision is overwhelmingly set at around 25 days (FTE, full time equivalent, plus public holidays) as a basic entitlement, with only three out of over 200 respondents providing less than 20 days holiday.

Just over half of organisations provide additional service-related days, most commonly up to an extra five days, making 30 days in total. Around half also allow employees to buy additional days, usually an extra five days, and only one-third of employers provide more holidays based on seniority.

Most organisations also allow employees to take sabbaticals, but the majority are unpaid (46%). Thirty four percent do not allow sabbaticals, while 3 (1%) of the respondents fully pay sabbaticals.

Flexible and agile working

The survey shows 98% of respondents say employees now expect more flexible working hours, while 89% say they expect agile/home working to be available. The survey also shows that currently just 36% of employers have agile working policies in place. Where business requirements allow, Aon expects this to increase in popularity. Almost one-third of respondents do not know how many requests have been made for flexible working, but among the rest of the respondents, it is common for around 20% of employees to make a request.

Jeff Fox summarises:

“This is the first time we have included these questions in our survey, so it is acting as our benchmark. Indeed, we found that this data wasn’t readily available anywhere else.

“Our experience with clients in recent years is that many have, or will be, reviewing policies and it’s helpful to understand market movements.

Jeff Fox continues:

“As well as providing more enhanced maternity pay, we are seeing organisations looking at how they can help parents return to work, for example through phased return to work.

“Annual leave entitlement is unlikely to move very much from the current norm of 25 days (FTE/plus public holidays), but the increasing prevalence of flexible benefits will allow more employees to vary their annual leave entitlement to match their personal circumstances more effectively.”

Aon’s Benefits and Trends Survey 2019, now in its ninth year, is formed from responses of over 200 employers of all sizes, from less than 100 employees to many thousands, who work across a broad range of sectors, and with 75% of them working internationally. This year, a number of new questions were introduced, such as on changing workforce demographics, to support employer benefit strategies and provide industry analysis.

For more information download the 2019 Benefits and Trends Survey or to discuss any of the issues outlined in this article, please get in touch by emailing us at [email protected] or calling us on 0344 573 0033.

Aon UK Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales. Registered number: 00210725. Registered Office: The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN.