As the UK pulls out of recession, employees will become increasingly confident about their market value and more demanding in their expectations from their current job and employer, says Stephen Watson, head of DC operations, Alexander Forbes Financial Services.
It is therefore vital that employers start to think now about how best to retain their good key staff, those that will underpin their organisation’s recovery and growth. Flexible benefits can play a key role in re-engaging current staff.
So it is encouraging to find that this year’s research sees all employers, regardless of size, valuing the merits (perceived as well actual) of benefits and looking to improve overall engagement over the coming 12 months.
However, the research also highlights significant differences between larger and smaller employers, and the approach they use to measure the effectiveness of their benefits – with just over 40% of organisations with fewer than 100 staff measuring take up versus over 80% of larger companies doing so.
For staff in large public limited companies, the range of benefits on offer has grown exponentially in recent years and the ability to offer such choice is judged as important by those employers. But the research shows employers with fewer than 500 staff believe that employees perceive a choice of benefits of much less importance – just 27%, compared with over 45% of larger companies. The key question is: to what extent is this broadening of benefits focused on staff demand?
Certainly, smaller employers are well positioned to tailor benefits to meet employees’ needs, focusing on benefits from which staff will derive maximum value and leaving out those that are not considered of interest. This targeted approach can lead to reduced costs and is easily facilitated by the latest communication platforms, which can also reduce the employer’s administrative burden.
Emphasis on communication
We also see larger organisations putting significant emphasis on communicating benefits, and surveying staff satisfaction and engagement levels. And as they look towards the next year, the research suggests larger companies are ahead of the game in recognising the difference well-targeted communication and staff surveys can make.
Smaller organisations lag behind those with more than 5,000 staff in the use of surveys. All employers should consider the benefit of surveying their staff – introducing benefits is just the first step. The process of communicating, evaluating and measuring the return on investment in benefits must be continuous, with all changes to the benefits offered driven by employee demand.
Disappointingly, the research shows that all employers place a lower relative value on benefits focused on employee wellbeing, financial education and financial advice. As the burden of responsibility for long-term health and financial independence shifts away from the state and onto the individual, employees will need to be better supported and informed. Our experience is that employees value having access to such information and advice, and there are high take-up rates for individual financial planning counselling, for example.
Smaller organisations may never be able to offer a range of benefits to compare with larger employers, but they can ensure they offer tailored benefits at the outset and regularly review what they provide. They can also learn from the way larger employers maximise the value of benefits through a continuous process of evaluation and targeted communication.