Employers are convinced that benefit packages boost employee engagement, according to research by pensions and employee benefits consultants Hymans Robertson.

The research revealed that only 9% of employers believe that benefits have no impact. It found that 35% of employers cited competition for top talent and 35% cited retention as the principal reason for enhancing benefits packages.  

The research revealed more than 95% of employers have no plans to cut their benefits package, while 45% are planning to enhance benefits in 2008.

It found that 10% of employees thinks that their benefits package is above average, while holidays (93%) and pensions (73%) are the most valued.

The research found that the most common form of pay rise for UK employees in 2008 will be an inflation-only increase (49% of employers), only 12% of employers foresaw no pay increases in their business.

It found that London-based businesses are the most likely to be offering above inflation rises (41%), while those in the North (28%) and Scotland (27%) are the least likely.

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