5 tips to get your employee benefits budget approved
It can be daunting trying to get budget for your employee benefits plans. Making a case to the board is something that every HR director will have to do throughout their career and something we know lots about. Here are our top tips for navigating the process.
1) Be clear about what you’re spending
This may sound obvious but it’s crucial to provide finance directors with a very clear breakdown of how much you will be spending and on what. Ask yourself, what are we spending and what is the value proposition?
You will also need to explain how you came to that figure and provide any relevant benchmarks. For example, the industry average for reward and recognition spend is between 1% and 2% of payroll. For areas such as employee discounts, it will be possible to give a clear fixed cost, per employee.
Don’t forget things like set up costs and branding. And it’s also important to be clear about variable costs – those that may vary over the course of the budgetary period. For example, one team may be much more engaged in a reward and recognition scheme and therefore spend for that team will be higher. It’s important to understand what factors may influence this and be prepared.
2) Use data to support your case
Whether it’s using data from an existing scheme, or providing clear projections about what sort of return on investment (ROI) you are expecting to achieve, you will be expected to support any of your arguments with clear data.
Depending on your objectives you should have considered points such as spend per employee, usage figures, etc. Many organisations also consider Value on Investment (VOI), which instead of focusing on tangible measures such as sales and revenue, looks at intangible measures such as employee engagement.
3) Ask your preferred benefits provider for assistance
If you haven’t run your own employee benefits initiatives before it can be tricky to pull together relevant statistics, case studies and examples of what you have in mind.
If that’s the case, it’s worth speaking to an employee benefits provider, as they will have a wealth of information from their own clients (albeit anonymised for confidentiality purposes), which may even include other businesses in your market. Indeed, if you can show that competitors in your sector are using employee benefits well, this can be a good way of getting your leadership team on board.
4) Be clear on your objectives
Again this is often about asking yourself some fairly simple questions. What are the goals of our employee engagement strategy? Why do we have the benefits and rewards that we have?
Simply talking about big picture concepts such as motivation and engagement won’t necessarily convince your board to part with their cash. They will want to hear that you have specific, measurable objectives in mind, for example saving each employee £500 per year on their shopping.
An important starting point is to understand what the different elements of your employee benefits strategy deliver. For example, voluntary benefits / discounts are about making your employee’s salaries go further and in many ways sit alongside the likes of salary and bonus.
Employee recognition is essentially about saying thank you or giving a gift. These distinctions are important and allow you to understand where the various elements of your employee benefits programme fit in to a broader HR strategy (and budget).
5) Make sure there’s a clear business case
Linking the objectives of an employee benefits strategy directly back to business goals is also crucial in getting buy-in from leadership. There are various ways that this can be achieved. For example, many businesses use reward and recognition to reinforce their organisation’s core values. For most employers, it can be a major challenge to make core values meaningful and ensure that employees understand how they are applicable to their day-to-day work.
By linking a recognition reward directly to your core values, employee recognition can help can help make them part of the day-to-day conversation from the outset, which is a compelling argument to put to your finance director.
Moreover, the employee rewards that you offer can also reinforce business objectives. Work-related awards, including opportunities for learning and development, are a great way of supporting your employees’ long-term engagement in the business but also benefit the organisation by increasing your team’s skill set.
This article was provided by Xexec.
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