With finance directors increasingly putting every area of an organisation’s expenditure under the microscope, it is perhaps not surprising that this year has seen a substantial rise in the percentage of employers that evaluate the effectiveness of their benefits strategy. More than half (52%) say they now do so, compared with just 39% last year.
Historically, the number of employers actively measuring their strategy’s effectiveness has remained low, so it is encouraging to see an increase in those who are making this effort. Whatever their reason for doing so, this is a positive step because there is little point in spending money on benefits if they are under-appreciated by staff or do not achieve their aims.
The importance of obtaining and demonstrating value for money has increased over the past six years. In 2004, just 29% of respondents said their benefits package provided value for money. This year, a huge 84% said the same.
There has been a similar rise in the percentage that believe their benefits package represents their employer brand – up from 27% in 2004 to 73% in 2010. Linking benefits to an organisation’s brand can help to boost employees’ engagement with their employer and build an organisation’s reputation as a good place to work.
When it comes to the factors respondents believe are important to their employees, perhaps unsurprisingly job security is at the top of the list, cited by 84%. This is almost double the 44% that said the same in 2004, but a fall from the 94% that said the same last year. This decrease may have occurred as employers try not to get too complacent about workforce retention as the economy begins to recover.
The percentage of employers that believe rewards for individual performance is important to employees has also fallen year on year, from 75% in 2009 to 65% this year. According to respondents, more important among staff is being fairly rewarded compared to colleagues. This has been a major issue for employers throughout the recession and it will be interesting to see if it continues as we head into the upturn.
Read more articles from the Employee Benefits/Alexander Forbes Benefits Research 2010