£30,500 is the average cost of replacing an employee. For a business of 500 people with an annual turnover rate of 19% that’s £2.85m in lost productivity and logistical costs each year.
Reducing turnover is the key to minimising these costs. And employee benefits play a central role in creating an environment where staff feel happy to stay but also secure, rewarded and willing to go the extra mile.
But how can you work out whether your benefit scheme is delivering the goods? We set out a three-step plan to help you measure assess and adjust your benefits package.
Benefits are a basic requirement for engagement
According to Herzberg and motivational theory, employee benefits aren’t just a nice to have. They’re an essential hygiene factor – part of the foundation that makes employee satisfaction possible. Without benefits employees will be dissatisfied; with them, your staff are more likely to be engaged and willing to stay.
Of course, that depends on the benefits your organisation offers. Provide perks that nobody wants and you’ll struggle to achieve satisfaction, much less motivation and retention. Get them right and you’ll position your organisation to motivate and retain.
With huge sums invested in employee benefits each year, our three-step plan helps ensure your money is being well spent.
Step 1 – Really understand what your employees want
Employee engagement surveys – with just one or two questions on benefits – only go a short way to understanding what your benefit programmes are missing.
They can’t be solely relied on for feedback, so instead try measuring:
- Benefit take up levels and usage stats – ask your providers to compare your take up rates to others in your sector to understand if all your benefits are working well
- Feedback from recruitment teams – look out for anyone negotiating a pay increase to offset missing benefits on offer from competitors
- Exit interview information – try including a question about your total reward offering to see if there’s anything people feel is missing or a benefit that has helped to lure them away
- Employee benefit surveys or focus groups – these are best for getting into the detail of which benefits employees really need
- Benefit market data – to ensure your package hasn’t drifted too far from where you want to be in the market
Once you’ve got an idea of where the market is headed and what your employees want, you can consider ways to plug any gaps in your benefit provision.