Employee benefits make up approximately one-third of total compensation costs. Despite their influence and cost, businesses around the world are uncertain of employees’ attitudes towards their pay packages. The dangers of this are two-fold: ROI might not be achieved, and proactive employees could look elsewhere for a more suitable offer.
Businesses cannot afford to ignore how their employee benefits are received. 29% of employees say their benefits package is a top reason to change jobs. Recruiting replacement staff is expensive, costing employers as much as 20% of an employee’s salary to find and hire each new team member.
To retain employees, businesses need to deliver pay and reward strategies based on their employees’ real needs and aspirations.
Gaps in perception
A high proportion of businesses overestimate their employees’ perception of their benefits. Although 61% of employers believe their staff value their benefits packages, only 40% of employees genuinely appreciate them. It is concerning how many businesses are blind to the reality. Employees are unengaged by their packages and the proactive ones will move on to attain rewards more suited to their wants and future goals.
Interestingly, a separate survey found that 92% of employees regard benefits as important to their job satisfaction.
How do you know if your employee benefits are hitting the mark?
A clear divide between employer and employee perceptions marks the need for an open conversation. Employers need to find out what drives individuals to reward them in a way they will appreciate. But what is the best way to go about this?
Some HR teams run company-wide employee engagement surveys as a relatively quick and easy way to find out more about their staff’s values and current attitude towards work. However, for large businesses, the surveys will generate a huge amount of data to sift through.
Another option is to use a tool to analyse data. Using technology to gather the results provides a more in-depth analysis, making it possible to see which services are resonating with individuals. By delivering benefits through an online platform, employers can continually analyse true engagement.
The power of personalisation
Customisable Employee Benefits solutions are more likely to engage individuals. Personalisation is becoming an integral part of our lives: consumers expect companies to market products and services that are relevant to their actual needs and wants, it is understandable why people want the same personalised approach from their employee benefits. In fact, a Global Benefits Attitudes Study revealed that 72% of employees with flexible benefit packages said the scheme met their needs.
Individuals value and expect freedom of choice. Companies that integrate flexibility into their packages are more likely to engage employees and retain them. Having just one scheme to manage, with choice built in, also keeps management time and costs to a minimum.
Driving engagement through internal marketing
Poorly communicated Employee Benefits solutions are also in danger of not hitting the mark. Businesses should think tactically – strategic benefits are shown to increase employee retention by 17%. Employees should feel motivated by their packages, but it is impossible if they do not understand their value.
Businesses should aim to communicate the purpose of the benefits, using examples to show how individuals can make the most of each service. Some tools give employees an individualised view of how their benefits stand and what they need to do to reach different goals. Others also build in recommendations and alerts, which act as subtle reminders of the products’ usefulness and impact.
Innovative companies go one step further to align their benefits to both the company and the employees’ values. As an example, imagine a business discovers that its employees really value health insurance. Using this insight, it can communicate how it too values the importance of health, which is why it is providing the benefit. This simple message is a powerful way to show how a business is aligned to its people.
As employers compete to win talent with attractive pay packages and interesting job roles, they may overlook the potential of tailored Employee Benefits solutions. Simply allowing for personalisation is an effective way to retain driven employees who want to shape their own futures.
Building choice into an offering is most cost-effectively managed when employees can use a tool to manage their own benefits. It means the business can provide just one package, but employees have access to a range of products and services to customise to their own needs.