If you read nothing else, read this…
- Giving staff input into what voluntary or flexible benefits they would like to receive can boost staff engagement and take-up.
- Employers can source this data using surveys, focus groups or conjoint analysis.
- Staff should be kept informed if employers then find they are unable to introduce a particular requested perk.
Staff feedback is a key factor in determining a flex or voluntary benefits package, says Ben Jones
In days gone by, when employers could be fairly confident staff would stay with an organisation for life, consulting them about what benefits they wanted was seen as something of an afterthought, if it happened at all. But as workers have become more mobile, so the idea of giving them a more active role in deciding what perks are offered has become more prevalent. Employers might learn from one of former prime minister Winston Churchill’s nuggets of wisdom when thinking about their benefits set-ups: “We make a living by what we get, but we make a life by what we give.”
In the Employee Benefits/Alexander Forbes Benefits Research 2010, 48% of respondents said matching benefits to employee needs was a key issue shaping their benefits strategy.
Flexible and voluntary benefits schemes both offer staff a degree of choice around their perks, enabling them to tailor their package to suit their needs. Giving employees a say in what benefits they would like to see in these types of scheme can help to boost engagement with, and take-up of, benefits.
There are two main ways for employers to gauge employee feedback on what they want to see in their benefits package: staff surveys and focus groups.
In-depth qualitative data
Focus groups can provide more in-depth qualitative data, says Jacqueline Otten, director, flexible benefits at Towers Watson. But she adds that firm facilitation is needed to ensure it breeds the right results. “How employers structure the different groups is important, say by putting senior people in with junior people,” she says.
The ideal number of employees in a focus group is about 12, to ensure all have ample opportunity to have their say. This also helps to ensure the group does not become dominated by one or two strong-willed individuals. Gareth Ashley-Jones, head of flexible benefits at Aon, says: “You will always get people volunteering for focus groups because they are the loud ones and want to have their say. The danger is, you can get one or two people taking over the whole group and getting the benefits they want.”
Employee surveys can reach more people, but tend not to yield as much in-depth data.
However, both methods can complement each another to produce the widest possible data set for employers to work from. “After the focus group, employers can get the wider employee population to have their say,” says Ashley-Jones.
Another type of consultation has emerged in recent years: the conjoint analysis. Essentially, this is a trade-off between different types of benefit, traditionally done on a ranking basis, with employees asked what they would like more of, against what they would sacrifice, as part of their package.
Martha How, reward principal at Hewitt Associates, says this is an intelligent questionnaire that gives employers a more thorough idea of how deeply staff value specific benefits compared with others, as well as simply what benefits options they prefer.
But if employers go to the trouble of collecting such information from staff, they should ensure that if they cannot offer a perk that is popular among employees, they keep staff informed about the reasons for this. Failing to do so can damage staff morale.
How cites the example of a company with a 10,000-strong workforce whose employees wanted cheap flights.
“The employer found that the airlines would not play ball because they had their own discount packages, so the employer did not offer the benefit, but did not tell its staff why,” she says. “If [employers] are going to ask employees whether they want something, they must respond to them.”
Employers should also bear in mind that just because staff say they would like a particular perk, that does not necessarily mean it will be equally popular once it has been rolled out to the workforce.
Cycle-to-work schemes are one example of this. Despite often attracting favourable comments from employees, take-up rates remain relatively low. The average for most organisations is between approximately 2% and 4%.
But employers can still gain advantages from offering such perks even if take-up is not as high as first expected. For example, employers that offer such benefits could enjoy stronger employee engagement levels, says Aon’s Ashley-Jones.
Towers Watson’s Otten adds: “People sometimes appreciate benefits even if they do not take them up. It is important to send the right message to staff. Childcare vouchers, for example, are something people have started to understand, over time.”
However, gathering employees’ views on the types of benefit they would like in flexible or voluntary plans requires employers to invest time and effort. So why might they consider doing so rather than simply putting an off-the-shelf package in place?
Some providers of off-the-shelf schemes, which offer a pre-defined selection of benefits, are quick to suggest these can be tailored almost as much as bespoke schemes. Mark Carman, marketing and communications director at flex and voluntary benefits provider Motivano, says: “Often, off-the-shelf packages can do the same job because we are constantly developing our systems.
“We use employer and employee feedback and if they say they want something, we say we will try to work it into our functionality.”
However, properly tailored packages can offer staff greater choice, says Simon Parkinson, senior consultant at Vebnet. “The main disadvantage of off-the-shelf packages is [a lack of] choice,” he says. “They tend to just offer things like healthcare plans, childcare vouchers, bikes for work – things that are not too complex. I think most organisations would prefer to have a tailored package, but it is whether they have the time to implement it and what the cost is.”
Cost and time can be the key criteria for employers when deciding which approach to take. Wider business events, such as a merger or acquisition, may also provide a reason to move to a more tailored approach, says Hewitt Associates’ How. “If, say, one organisation of 200 employees joins with another of the same headcount, there may be two different sets of terms and conditions, in which case a tailored approach would be appropriate,” she points out.
In some cases, there may be legal reasons for doing so, says How. “If one organisation has all-male staff and another all-female, and the former company gets 28 days’ holiday and the latter 25, then that is a possible sex discrimination claim straightaway.”
Whatever an organisation’s budget and the nature of its package, communication with employees is hugely important before making any benefits changes. Benefits strategies can succeed or fail on the standard of communication, so the nature of the consultative process with staff before implementation and gauging feedback afterwards are crucial. “Communication is imperative to the success of the project,” says Vebnet’s Parkinson. “It is the number one thing employers have to get right. They can go out and get a system that configures benefits, but if they are not communicating it correctly, then employees will not use it and will lose faith in it.”
Getting the right blend of benefits can help to keep a workforce happy. Another approach is to tailor perks options to suit an organisation’s workforce profile. Glenn Elliott, managing director of voluntary benefits provider Asperity, cites the example of an organisation that included perks such as discounts at retailers Asda and Argos in its package because most of its staff were middle-aged and had wives or partners.
“It is not rocket science,” says Elliott. “If you have got an experienced provider which has been there and done it and dealt with hundreds of companies, then although it is important to know what staff will value, employers should be able to work out what benefits will suit their company.”
Whatever level of involvement employers give staff in shaping their flexible or voluntary benefits schemes, it is important to remember one thing: before making any changes or carrying out any consultation with employees ensure they are aware of the perks they already have.
Aon’s Ashley-Jones says: “I have had a number of conversations [about benefits] with people and they have said ‘oh, we get something when we die, don’t we?’ People really do not understand their benefits.”
Building up this employee understanding is sure to stand employers in good stead when they are trying to decide what strategy best suits their organisation.
3 connects with working groups
Staff feedback played a key role in structuring benefits at mobile phone company Hutchison 3G UK, known as 3.
The company formed three working groups in the head office, retail and call centre parts of the business to offer advice on what its 3,200 UK employees wanted in their benefits package. Seth Russell, director of reward, says:
“We wanted everyone to have access to it and we wanted it to have something for everyone.”
Retail discounts were central to the company’s integrated online voluntary and flexible benefits plans because they received what Russell describes as an a “overwhelming” positive level of feedback, particularly from staff in the retail side of the business, who tend to be younger than colleagues in the other divisions.
Three meetings of each group were held in the six months leading up to the schemes’ launch at 3’s head office in Maidenhead. Judging by its take-up rates, the consultative approach was successful. Of the company’s total workforce, 92% of head office, 71% of contact centre and 32% of retail staff made a choice under the flex plan.
“It reinforced what we thought,” says Russell, “that in different parts of the business, employees wanted different things.”
HOW TO GAUGE EMPLOYEE FEEDBACK
- Focus groups can provide in-depth qualitative data, but employers need to ensure good facilitation of discussions to ensure they produce the right results.
- Surveys can reach a large number of people, but tend not to yield as much in-depth data.
- A blend of focus groups and surveys can work well.
- Conjoint analysis asks employees to rank benefits against one another to provide an idea of which options they value.