5 questions to ask when reviewing your employee benefits programme
When was the last time you reviewed your employee benefits programme? Reviewing your program on a regular basis is critical to managing employee retention and recruitment, but many businesses fail to do this and as a result they can end up with an employee benefits program that is staid and doesn’t offer the benefits their employees need or want.
Hargreaves Lansdown found that over a third (36%) of respondents have not reviewed their core benefits offering in the last two years and as a result risk being at a disadvantage to their competitors.
Just like we review car and household insurance policies on a regular basis to make sure they cover what we need, HR professionals need to review their employee benefits programme or they could risk a mass exodus of staff.
In January 2016, just over a fifth (21%) of employees were planning to change jobs in 2016, and the most popular reason for wanting to find a new employer was to secure better pay and benefits with nearly half of employees planning to change organisations for this reason (48%)
Why you need effective employee benefits
Taking the time to invest in effective employee benefits that fulfil your workforces’ need to make savings on everyday expenses and improve their lifestyle can have a dramatic impact on staff loyalty and engagement. In 2016 Alfac found….
- 60% of employees are likely to take a job with lower pay but better benefits
- 42% of employees say improving their benefits package is one thing their employers could do to keep them in their jobs – second only to “increase my salary” and more important than “give me a promotion.”
- 16% of employees have left a job or turned down employment in the last 12 months due to the benefits offered.
Modern benefits are about choice
Giving employees a choice in their employee benefits is important and contributes to the ability of organisations to recruit and retain staff. This has led to a rise in flexible benefit programmes. At organisations that offer their employees between 1 and 5 benefits, 53% would recommend their employer as a great place to work while at organisations offering 11 or more benefits, 66% would recommend their employer as a great place to work
However, employee benefits isn’t about providing a set number of different benefits, it’s about providing benefits that meet your employees’ specific needs which is why you need to review your program on a regular basis so that it remains effective.
Best practices for reviewing your employee benefits programme
- Start early – Many organisations leave it too late to do a thorough review of their programme. If your benefits year runs January to December then starting in October gives you the time you need.
- Have clear objectives – What is it that you want your employee benefits scheme to achieve and how does this align with your corporate objectives?
- Listen to your employees – It’s important to identify the benefits your employees’ need and want. Elicit feedback on your current offering and any new benefits before implementing changes.
- Analyse what your competitors offer - If you want to recruit and keep top talent then you need to benchmark your employee benefits scheme against that of your competitors and others in your industry.
- Review your existing programme structure and costs – Make sure your employee benefits scheme suits your needs and can demonstrate ROI.
5 questions to ask when reviewing your employee benefits programme
1) What do employees want?
No business wants to waste money, so don’t invest in offering employees benefits they don’t want. Instead, try to understand your employees’ priorities by asking them what would be of real value. It's also easy to solicit feedback on benefits directly from your employees through surveys, focus groups and meetings.
There is no one-size fits all when it comes to employee benefits - and the appeal of particular benefits will depend on the demographics of your organisation. For example, a parent might want childcare vouchers, an older worker might be planning for retirement and a younger employee might want help buying the latest gadget. That’s why it’s important to understand what appeals to your workforce and offer a range of benefits that they can choose from.
2) What are your business objectives and will your employee benefits support them?
Aligning your employee benefits with your business objectives is critical to success and will help your organisation achieve its goals as well as having a positive impact on employee retention, staff absence, productivity and motivation.
CIPD reported on the strong relationship between an organisation’s business strategy and the workplace benefits on offer to the workforce. HR professionals need to ensure that the business strategy and employee benefits strategy are in sync.
What are your business and HR goals? Consider how your benefits programme will help you achieve these goals and objectives, for example if one of your goals is reducing staff absence, then focusing on wellbeing benefits, such as annual health screening, reduced gym membership fees or a cycle to work scheme, can help you achieve that goal.
3) How will we help employees make informed decisions?
Communications are critical to the success of employee benefit schemes yet many organisations still overlook the communications part of an employee benefits programme.
Having consistent and carefully thought out communications helps employees understand the benefits available to them and, more importantly, the value they can gain from the benefits. As a result, they are able to make better, more informed benefits choices on the benefits that will suit their lifestyle, whilst participation rates increase and ROI improves.
Consider what communication tools you already have available to you, and how employees want to receive their communications. Younger employees might be happy to receive messages via text, while older employees might prefer emails or a leaflet. And don’t forget to consider any sign up deadlines when putting together your communication plan.
4) Can we improve the management and reporting of the scheme?
It is essential that your programme structure and reporting helps you improve your employee benefits programme. At a minimum your programme needs to report on measures that align with your business objectives, such as benefit spend and the take up of specific benefits.
But it also needs to measure qualitative aspects such as awareness of the programme, the range of benefits, and the value employees place on the benefits.
To do this you need to decide what measure you will report on when reviewing and designing your programme so that they can be incorporated into it.
5) What is your budget?
It’s important to consider the return on investment and the impact on your business objectives.
If your employees have access to online portals and apps then these platforms can often provide more bang for your buck. In addition, they are an excellent way to increase engagement in the scheme, which can result in higher participation and better ROI.
By reviewing your employee benefits offering you can not only re-engage employees, but you can improve employee retention. A timely review could also save you money and increase participation by removing benefits that employees no longer want!
James Malia is the director of employee benefits at P&MM Motivation, part of the Sodexo family.
This article was provided by P&MM Employee Benefits, part of the Sodexo family.
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