If you read nothing else, read this …
- Receiving employee benefits continues to be a contributor to employee satisfaction and engagement.
- Employers need to consider what impact the recession had on the way employees work, and are therefore rewarded and motivated.
- Ensuring employees are engaged is essential to succeed in the battle to attract talent.
Case study: Snowboarding spurs extra effort at IntaPeople
Recruitment firm IntaPeople decided to retain the annual team reward for its sales force to get them to go the extra mile in challenging times for the recruitment industry.
By closely aligning the reward – a sales conference and snowboarding holiday in France – with the strengthof performance shown by the 10 people who earned a place on the trip, IntaPeople was able to justify the cost.
To win a place on the trip, which took place in January, staff had to achieve 20% more sales than the lowest-performing member of the sales team.
Stephen Riley, sales director at IntaPeople, says: “If you look at the negative, we can save £5,000 or £10,000 by not going on the sales conference. But to get on the sales conference in a sales-based organisation like this, you have to work exceptionally hard. To me, it is a carrot: ‘Let’s all work harder and bring more money into the company and pay out all this on benefits’.”
Credit unions in the workplace
- The laws have been relaxed on credit unions meaning that they can now be offered more easily to employees through the workplace.
- Credit unions enable employers to offer struggling staff access to a range of financial services at little cost to the organisation.
- Previous restrictions have now been lifted to allow credit unions to serve more than one group of people.
- From January 2012 they were able to offer savings and loans services to several groups, including employees of a national organisation, even if some workers live outside the geographical area that the credit union serves.
- Because there is no profit for third-party shareholders, credit unions can create a financial community that is mutuallybeneficial to its members, who can access affordable loans and savings accounts that they might not be able to obtain through mainstream finance.
Employers are seeking ways to make employee benefits more rewarding to keep staff motivated and engaged as the economy continues to struggle, says Nicola Sullivan
Engaging employees during tough times is not a new concept for employers. Many have been battling the staffing and budgetary challenges caused by the ongoing economic uncertainty, the severity of which became apparent with turmoil in the stock markets and the collapse of Lehman Brothers in autumn 2008. The argument for making sure staff are motivated and engaged applies just as much now as it did at the height of the economic crisis.
Charles Cotton, reward adviser at the Chartered Institute of Personnel and Development (CIPD), says: “I think, to a certain extent, there is always a danger that some organisations or HR people can take the attitude that employees can like it or lump it at the moment because there are not many job opportunities around. And if they do not like the pay award, so be it.
“Of course, the danger is that organisations that take that approach manage to muddle through the [uncertainty], and as soon as the economy starts to grow, everyone piles out and the employer then fails in the growing period because it has lost its talent.”
Receiving employee benefits continues to contribute to employee satisfaction and engagement. According to the Employee Benefits/YouGov research 2012, published in February, 58% of employees are satisfied with their current job and 64% feel committed to their current employer. But there are clear differences in job satisfaction according to the number of employee benefits staff receive. Less than half (45%) of those who receive no benefits feel satisfied in their job compared with seven in 10 (68%) who receive three or more benefits.
Interestingly, in this time of austerity, financial education and advice were listed as the seventh most important benefit by staff, but only 1% actually receive the perk.
Michael Wagstaff, head of public sector consulting and research at YouGov, says: “Financial education is something that only a few people get, but those that get it really benefit from it in quite an extraordinary way. One of the really interesting things about this [research] is that it has looked statistically at what it is that drives satisfaction.”
In line with employees’ need to cut down on the cost of everyday living, discounts on other organisations’ products were ranked as the fifth most important benefit, but were received by only 10% of employees.
Of course, giving staff what they want does not always come down to tangible benefits and reward. A report published by The Work Foundation in 2010, Understanding the deal, says that the employment deal between employers and employees can be bolstered by a number of factors. It defines an effective employment deal as one that is based on good relationships with line managers and colleagues; fulfils employees’ expectations of what is demanded from them; and is broadly in line with employees’ values and beliefs.
Wilson Wong, senior researcher at the Centre for Workforce Effectiveness at The Work Foundation, says: “In terms of sustaining the deal, employees want to know how much their work environment is consonant with their personal diaries and whether the organisation is going in the direction where they can say they hold similar, or broadly similar, values.”
Flexible working is one way the employment deal can be strengthened, says Wong. “It is the gift of the line manger to circumvent the rules. If an employee already knows they bend the rules for them, they know the employer values them and is willing to take that risk for them. This helps the employee want to keep the deal going.”
Sarah Veale, head of the equality and employment rights department at the Trades Union Congress (TUC), says: “There are some quite enlightened practices going on at the moment – with unions and sometimes without – looking at whole packages. Even if pay is not going up and there is a depression of pay rates, other benefits are being looked at in a more imaginative way. There is a more positive approach to flexible working.”
Employers seeking ways to engage their workforce during difficult times will also have to consider the changing needs of the next generation of employees, who will be more networked and have a greater need for interconnectivity, alongside any impact the economic uncertainty has had on current working practice and attitudes.
Peter Reilly, director of HR research and consultancy at the Institute for Employment Studies (IES), asks: “Has [the economic situation] pushed people together or apart?”
When planning their reward strategies, employers may now find team-based incentives to be the most effective way of delivering performance, while others may benefit from preventing silos from developing or want to reward staff individually.
“Employers need to think about the deal that has been, what it is and what it might be in the future,” says Reilly. “Nothing can be called normal any more. We are not going to return to the state we were in before.”
At a time when more employees are struggling to make ends meet, it is critical that an employer’s reward package is perceived to be fair and transparent. Ben Willmott, head of public policy at the CIPD, says: “If an employee does not feel they are being treated fairly by their employer, the labour market is not a particularly attractive place to be at the moment in terms of other options.
“It is important people feel they are rewarded fairly. If organisations are only able to make a small pay award or a pay freeze, the important thing is that they explain the business context and the external environment and make more effort in being transparent about the reasons for it. Make sure it is reflected across the organisation. It is very difficult for employees to deal with a pay freeze if they see their executive team walking awaywith bonuses.”
One way of redressing the balance is by introducing an all-employee share scheme. In his speech in January 2012, on the state of the economy, deputy prime minister Nick Clegg hailed employee share schemes, operated by the likes of the John Lewis Partnership. Clegg said employers with high levels of worker ownership had weathered the downturn more successfully.
Justin Rix, employer solutions partner at Grant Thornton, says: “In our experience, organisations that operate employee share plans report greater engagement and an improvement in employee interest in the performance of the business. This, in turn, can lead to better business performance and increased company value.”
To get employees to understand the value of share plans and other benefits, employers need to develop a robust, targeted communication strategy. Ali Godding, solutions development manager at Grass Roots, says: “The best way an employer can communicate benefits is to know and understand its employees well. Organisations have huge amounts of information on their customers and that has got to change.”
Information should be collected on how employees respond to an organisation’s communication of benefits, says Godding. “If, for example, an employer sends loads of emails out, who opens them? How many people open them? How many employees clicked through on the links [to a benefits website]? It is about gathering information that will allow the about carrying that strategy forward.”
The importance of employee feedback should not be overlooked. According to the 2009 MacLeod review, Engaging for success: Enhancing performance through employee engagement by David MacLeod and Nita Clark, allowing staff to have a voice is one of the key enablers of engagement. The review said employees’ views should be sought out, that staff need to be listened to and see their opinions make a difference.
“Employees need to feel they can feed their views upwards, that they are listened to and taken account of,” says the CIPD’s Willmott.
When employers consider the impact the economic climate is having on engagement and motivation, they must ensure they offer perks that meet staff needs.