Employers are feeling the strain of workplace pension schemes, according to new findings.
A report published by the Chartered Institute of Personnel and Development (CIPD) found that seven out of ten employers told EO researchers that the rise in pension take up has put them under financial strain.
This is particularly problematic at a time when a growing number of staff members are saving into a workplace pension.
Figures published by the CIPD found that two-thirds of UK employees are now saving into a workplace pension following the introduction of auto-enrolment pensions.
Some 2,000 workers were polled for the report, which showed that 66 per cent of them now save into a workplace pension, which is a rise from 45 per cent in 2010.
The percentage of savers increases to 74 per cent if people earning less than £10,000, who are not eligible for automatic enrolment, are excluded.
Speaking about the findings, Charles Cotton, CIPD performance and reward adviser, said: “While many ways of boosting performance may now only be marginal, especially in sectors subject to legal requirements, if employers can make enough small changes then they can really boost their productivity.
“What all employers need to do is review the way their organisation operates, and identify the areas where improvements can be made, before deciding the task is too great.”
There are many ways that employers have managed to mitigate the payroll costs associated with the take-up in pensions.
For example, 15 per cent of employers had managed the cost by paying the minimum rates required under auto-enrolment rules.
Organisations also countered costs by reporting lower profits (21 per cent), reducing or freezing wage growth (ten per cent), or reducing other elements of pay (ten per cent). However, the research suggested that improving employee productivity could be a way to increase pension contributions without making reductions in other areas of the business.
The figures showed that of the 32 per cent of employers who increased salaries by more than two per cent in 2015, 28 per cent did so because they had made productivity improvements.