- Employers need to get the reward basics, such as pay, right before a voluntary benefits package can be effective
- Voluntary benefits packages give employers a good opportunity to offer perks that make a real difference to staff
- The key aim is then to build an association between this value and the employee’s sense of what working for your organisation is all about
Voluntary benefits can make a real difference to staff satisfaction, says Tim Fevyer, director of reward and policy at Specsavers
When looking at voluntary benefits, it is worth reflecting on the role of broader reward, what it can and cannot achieve. The traditional elements of the package, pay and bonuses, on their own probably do not have much impact on people’s motivation – unless you get them wrong. People expect to be paid at the right level for what they do and, as a basic expectation, you probably should not expect much thanks for getting it right.
As Ed Lawler described in Pay and organizational effectiveness, finding out that people are dissatisfied with pay is pretty much a non-finding. Instead, the focus should be on making sure our people are not more dissatisfied than those in the companies with which we compete.
In this sense, the focus of reward is on issues such as equity and consistency – making sure you are rewarding people in line with their view of what is right, compared with the market and internal peers; and treating them consistently, even though material outcomes might differ.
Voluntary benefits will probably not be a panacea if these basics are not right first. Having a great discount on a high-street purchase will not take away the pain of being paid way below the market rate.
But once the basics are right, voluntary benefits (as well as flexible benefits) offer a great opportunity to build a package that really can make a difference by providing people with what they actually want, giving them things they can tailor to meet their needs and, importantly, something that offers them real and immediately recognisable value.
The key aim is then to build an association between this value and the employee’s sense of what working in your company is all about: “This is something I like and value, and I get it because I work here.”
In the year ahead, this is where good communication will come to the fore for reward practitioners. In these challenging times, with a keen focus on cost and pay freezes common, finding ways of making a difference to people’s packages is increasingly difficult. However, for a relatively modest outlay, a well-positioned voluntary benefits scheme can be a cost-effective way of making a difference – and for some can be the first step towards the introduction of a wider flex scheme.
But it all depends on how well it is positioned. It is not just about introduction, it is about making sure people see its value, and how it fits together with other parts of the deal. Building links and ‘anchors’ to help people make associations between each part of the offer is another good reason to make sure the basics are right, too.
Keep it refreshed
The exercise is also about regularly reminding people about the scheme, which means keeping it refreshed. Ensuring the offer stays alive like this also presents a great opportunity to talk to your employees about reward again – an excuse to remind them what a great place this is to work.
In future, communication will play an increasingly important role in making voluntary benefits work. There will be greater use of tailored, or segmented, marketing and communications: at the front end, making it feel much more individually relevant, and at the back end, using the mass of information available to show employees how much they have benefited from it.
If current trends continue, it is hard to see how companies will be able to afford not to have a voluntary benefits scheme and, in these hard times, it will put an even keener focus on the use of integrated reward marketing and communications to make a real difference.
Read more articles from Thought leaders: The year ahead