British companies are to start offering their employees emotional rewards as well as financial ones as part of a bid to keep hold of staff.

Over the next five years, organisations will become much more family friendly and flexible, will respect their employees more and adopt a consistent approach to recognising their achievements, a survey by Hay Management Consultants revealed.

The Reward in the 20th Century survey of personnel managers found that 90 per cent expect their companies to be family friendly in five years' time.

Steve Watson, of Hays Management Consultants, said: "The intensifying war for talent is finally making organisations realise that rewarding their employees well is much more than a financial question - they need to think about their practical and emotional needs too."

Only a quarter of companies and organisations have flexible working today but in five years time, most are expected to introduce flexible working hours and facilities like creches, according to personnel managers.

Staff can also expect the amount of overtime they do to decrease, the survey found. A total of 45 per cent said work demands frequently cut in to employees' home time at the moment, but in five years only 25 per cent expected this to happen.