Signs of the credit crunch are hitting employers, with employees preferring to be rewarded in cash as opposed to any added benefits or perks, the Institute of Employment Studies (IES) has reported.

Peter Reilly, IES director of human resources research and consultancy, said “People who are on low incomes do want the money because they need to pay their debts, and giving them gimmicks is neither here nor there.”

More employees are turning away from benefits such as additional leave, company car, health insurance and flexible working hours in return for a higher salary. Reilly says that it is more likely to be mortgage holders who prioritise their salary over benefits, due to the rising costs of living and household bills.