Duncan Brown: Reward communications: are you listening?

I have just received the invoice after a recent visit to a hospital consultant. The £156.50 bill, my private medical insurance provider informed me, would be split, with me paying £150 and them £6.50. Wow, that higher excess got slipped in quietly.

Reward communication is hard: trying to get some highly technical, mathematical and financial information across to busy employees that show little general interest most of the time. Until things go wrong. And things do seem to be going wrong at the moment.

We are just getting ready to publish two of our regular studies at Aon Hewitt: the annual review of Global Trends in Employee Engagement, which covers more than five million employees, and our annual EMEA Benefits Communications Survey, which includes 294 employers in 18 countries.

Last year’s findings were not good. While engagement levels globally were up 2% to 60% in line with the slowly recovering world economy, the average level in the UK was flat at just 47%, which means less than half of our employees are engaged at work.

Communications vary

The benefits communications survey highlighted cultural and national variations, with, as you might expect, the UAE’s employers spending the most per head, the French being the most reliant on paper communications, the Spanish on face-to-face, and so on. But just 16% of the employers polled rated their benefits communications as effective and just 28% issue total reward statements.

These two sets of findings are not unrelated. While career opportunities and having a future with an employer are overwhelmingly the number one driver of employee engagement in every region of the world, the financial package has become a more important determinant in cost-of-living-pressured Europe. And there is a strong correlation between the perceived quality and openness of employee communications and overall engagement levels.

Employee engagement

Also, there is gap of almost 30% in positive perceptions of pay and benefits between those employers with the highest levels of employee engagement and the European average.

Some 88% of the organisations surveyed communicate with their employees about reward only once a year and just one-third regard this as part of their wider engagement and talent management strategies. This hardly suggests a wholehearted commitment to openness.

Some research studies, for example the Equality and Human Rights Commission’s Research Report 2: Equal Pay Reviews Survey 2008, suggest that UK employers may have become less open on reward communications, fostering ignorance and potentially perceptions of unfairness.

The good news is that 86% of respondents in our benefits study were planning to invest in improving their compensation and benefits communication, so it will be interesting to see how far the dials have moved. But while the focus of discussion often seems to be on the media and the switch to electronic information, online content and social networking vehicles, our research suggests that the motivation and meaning are critical.

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