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Looking a gift horse in the mouth

Over the years, employee benefits have shifted from being unusual and attractive to an expectation. The fact that “entitlement by staff” regularly features in the top half of reasons why companies offer schemes bears this out. David Walker, Commercial Director, Personal Group, explores.

It is worth considering whether you are going to start a standalone voluntary benefits scheme or if you will incorporate it into a wider employee engagement programme. This could include, for example, career mapping or health and well-being programmes.

In terms of deciding when to introduce a benefits programme, a challenging consideration is that at any point there will be some strategic or wider issues that would justify deferment, such as reorganisation or pensions auto-enrolment. You might think there are better times than others to get programmes up and running and it is tempting to put plans on the back burner until those bigger projects are resolved. However, smart organisations wouldn’t defer programmes for external reasons. If you don’t have a scheme in place your competitors will, so there is a risk that by deferring or waiting you could make staff less engaged than they already are.

“To use benefits to the maximum effect requires a change in behaviour. While employees may receive benefits, they need to be encouraged and motivated to use the benefits packages available to them”

In every situation, the key to a successful programme is communication and ensuring your employees understand your message. You need to explain very clearly why the company has chosen this route and how the employee will benefit. You will need to explain the benefits, get employees registered and encourage them to actually use the programme. A scheme will only become integral if the staff are regularly using it, so usage should be your end goal. If you can achieve this, staff will become advocates and influence others internally, and it is this that makes a programme successful. You may have the best programme possible but if no one knows about it or no one uses it, it has no value. How you communicate with your staff is extremely important, and it’s useful to remember that online isn’t the only option. In a technological age, few take the time to actually talk to employees to ask how they would like to hear about their benefits. Face-to-face remains the most effective form of communication and whilst it can be seen as time consuming, it is very worthwhile, particularly if it is the first time you have put a benefit package in place. It allows your employees to ask direct questions which they may not wish to ask in front of their peers, and it aids understanding. Face-to-face meetings can also be used to register staff and get them up and running on the programme. Numerous case studies have shown that companies who have invested heavily in a benefits scheme can achieve high levels of awareness but levels of registration and usage are often much lower. Something happens between the message being sent out and action being taken.

One of the main issues is that to use benefits to the maximum effect requires a change in behaviour. While employees may receive benefits, they need to be encouraged and motivated to use the benefits packages available to them. A small change in behaviour is all that is required in many cases, and there is a lot of value in allocating specific time to explain benefits and encourage some forward planning because it can result in significant financial savings. A mixture of online and offline communication is often the best way of encouraging these changes. For example, by changing spending habits and using a re-loadable payment card with a five percent discount available for the weekly shop, the average household can save £138 per year*. In fact, if all relevant employee benefits are fully utilised, the average household can save around £1400 per year*. To put this into perspective the average earnings for a full time worker in the UK is £26,500**, therefore applying employee benefit savings is the equivalent to 5.3 percent increase in salary. Of course, this requires effort but in a climate of pay freezes, an effective five percent increase in salary can be very attractive. Technology is a great way to communicate benefits but it is best practice to first assess how employees use and access technology in their personal and professional lives. Emails may be a good communication tool for office based staff and social media can also help spread the word when it comes to a new benefit. Equally, if technology isn’t widely used, a well-placed poster or flyer might be just as effective. Each company is different and you need to communicate in the way that works best for your team. If you communicate well, and educate well, you have a much better chance of developing a loyal and engaged workforce.

The sheer variety of benefits available means it is increasingly important to understand what works when it comes to employee benefits. Benefits need to be relevant to the demographic of your workforce and that is why tailored packages work well. If you predominately have young staff then they may appreciate vouchers for high street clothing stores or days out at theme parks above discounts at grocery stores, for example. They might also be more willing to take part in health and wellbeing initiatives such as tax efficient Cycle to Work schemes. It can be extremely helpful to hold focus groups to hear what staff would like to see in their package. Ease of access to benefits is also key to their success. If it is difficult to log-on, or you have to wait a long time for vouchers to arrive, it could be detrimental to your programme. There is a good opportunity to mix it up too, have some great short term one-off offers to pull in interest and combine that with competitive long term offers. Employee benefits are definitely not a “one size fits all” product. To get the most out of a package, it is a case of knowing and understanding your employees and what will work for them. Salary sacrifice is a great way for employees to maximise their earnings because they will save on the product or service they are purchasing and then save again on tax and National Insurance contributions. One issue is that some employees can see salary sacrifice as ‘losing out’ on earnings. Getting around this mindset is a prime example of the need to educate employees so they understand what they are buying into. Just as important as understanding what drives your team, it is vital to ensure you are using benefits to the right end. People need to be in a receptive frame of mind and willing to take on board what is on offer. Trying to use employee benefits to pacify an antagonised work force that has just experienced a round of redundancies probably won’t work! In such cases, you will need to communicate the wider purpose of introducing the scheme and be prepared to deal with any criticism.

If your employees give you feedback that the benefits on offer are not relevant, you need to listen and adapt your offering. As employee benefits change and develop, you can tailor them to meet your employee’s needs. If there is a very specific local need, for example a gym close to the workplace, you can often negotiate your own benefit especially for your employees. This can be a great morale boost and staff will know they are being listened to.

To ensure your employee benefits programme is a success it is vital to do your homework before you set it up. Hold a focus group and gather information on both the benefits and channels of communication. Once the programme has launched and is up and running, ask for feedback to see if you are meeting the remit from the focus group. An employee survey can give you a lot of insight at this point. Communicate regularly using a number of relevant channels to ensure you are reaching all staff, and keep everyone updated on changes to your benefits programme. If there is feedback, take it on board and if it is something that you can influence and will work, don’t be afraid to make changes. If employees can see their feedback making a difference it will increase engagement further. Ultimately, having only just seen off a double dip recession, saving money is a huge issue in the workforce but companies are broadly not in a position to increase wages. If you can show your employees how to effectively increase their effective salary using their benefits package, it should not be a difficult sell.

Consider your communication choices – how do you currently communicate with your staff? If you have a system in place that works well, stick with it. Ask your benefits provider what has worked well for other clients because they may have some insight into up and coming trends or initiatives. Investigate what your employees really want – talk to your staff. Find out what their preferred method of communication is. This is a great time to find out up-front what your best approach is. Carefully schedule your benefits programme launch – timing is everything and if your industry has peak times when everyone is working hard, then perhaps that is not the time to launch your programme. Scheduling a launch and events around it can help promote the programme. Use the expertise of your benefits provider – they will have a wealth of knowledge regarding how to communicate. Often they will offer a package which incorporates all the communication collateral you require. Make the most of the available technology – technology is a great way to communicate, however if your staff don’t have access to it, or aren’t interested in using it, then it could be a false economy. Utilise a blend of communication channels and tactics – sticking to one form of communication may not always reach everyone. A combined approach using on and off line methods will achieve a wider reach and a broader appeal. Review your progress and performance – regular reviews will help you monitor progress and gauge levels of understanding. It will help you to identify what is working for you and what isn’t.

*ONS family spending 2010/**ONS Spending Survey

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