The imminent introduction of auto-enrolment looks set to trigger increased investment in employee benefits, according to research from Group Risk Development (Grid).
Research by the group risk trade body revealed that businesses were considering increasing the value of the benefits currently offered or adding new ones for their workforce.
It found that more than two in five employers (41%) questioned claimed to be looking to up the value of their benefits package during 2012.
The current average annual cost of an employee benefit package (excluding pension) is 2.19% of payroll, but the study suggested that employers may place greater emphasis on benefit provision in view of the current public sector service squeeze.
A fifth (19%) said they were prepared to work with staff to ensure they were properly provided for in the face of public service cuts and a further 12% said they would be more likely to increase benefits in light of government policy.
Finally, a third (29%) said life was tough but that they may look at their benefit packages in the near future.
Grid noted that if this increased investment materialised, it would be in sharp contrast to recent trends where just 16% of employers upped the value of their benefits package over the last year.
Perhaps encouragingly, group risk benefits appeared to be particularly high on employers' radar in the wake of legislative change.
Among companies who don't currently offer group risk benefits, 53% would consider introducing group life insurance, two thirds (68%) would think about introducing group income protection and three quarters (78%) group critical illness alongside auto-enrolment.
Katharine Moxham, spokesperson for Grid, said: "Employers will currently be facing the introduction of auto-enrolment with varying degrees of confidence or trepidation.
"It is very positive to see that they are considering further investment in their benefits package alongside auto-enrolment and specifically that they are acknowledging the major role protection benefits can play in managing absence and fostering employee wellbeing."