5 steps to reviewing legacy benefits to drive engagement
Dusting off legacy benefits for review should remind you that they may no longer stand up to scrutiny in a modern world.
Preference for the status quo, over-reliance on benchmarking and not listening to employees, has created a gap between what employers are offering in employment packages and what employees want.
In fact, Isio’s recent research shows that only 23% of employees said their employee benefits package met all of their requirements, and at least one-third of employer spending on benefits is evaporating due to people not knowing, or liking, what they receive.
Aside from the obvious desire to maximise the value of investment in benefits, there is another incentive for employers to rethink what they offer.
Link between benefits and retention
Isio’s analysis showed a strong link between satisfaction with employee benefits and job retention. Employees who thought their benefits package met none or few of their requirements were significantly more likely to quit in the near future, with 16% planning to move jobs, vs 10% of the wider population.
This is makes sense: employees who dislike their benefits package are more inclined to move jobs as they are being provided with rewards they do not value. When considering the cost of high turnover, the numbers here provide hard evidence of the potential savings that could be unlocked by a well-designed benefits package.
Legacy benefits are often seen as fixed, immovable objects within the design of a reward package, set aside in the mind’s eye of decision-makers with ‘do not touch’ written on them. But for those who want it, change is achievable.
Here are our 5 key guidelines:
1. Start from the beginning – Have a clear vision of what you want your benefits to achieve before targeting solutions.
2. Know your leaks – find out where exactly value – and your budget - is being lost in order to prioritise resources.
3. Reconsider the boundaries – Hard lines can be softened and flexibility can be introduced to almost any benefit to provide much needed diversity. Set your own bar rather than benchmark others’.
4. Listen to employees’ voice – in its entirety, without bias. Our research showed that ethnicity was a factor in unappreciation of legacy benefits. Ethnic minorities place less value on traditional benefits such as pension, income protection and PMI. Any redesign needs to represent the needs of all staff, and the data suggests you need to look beyond legacy benefits to engage a diverse workforce.
5. Employee support is key – you might actually offer a perfect suite of benefits, but to maximise engagement (and value) employees need to understand these, and be empowered enough to make decisions around them. The right mix of communication and education to support your benefits is critical.
Isio’s June 2023 survey in conjunction with YouGov of 7,674 UK private sector employees. Responses for don’t know or prefer not to say answers have been removed, unless explicitly shown.
In partnership with Isio
A forward-looking approach to employee benefits, creating value for today and tomorrow. Helping you and your employees get the most from their benefits.
