More than a third of employers plan to increase their spend on employee benefits in 2012, according to research by the Chartered Institute of Personnel and Development (CIPD).
The CIPD/Benefex reward management survey 2012 also found that only 18% of respondents provide total reward statements (TRS) to staff and 20% offer financial education.
The majority of respondents, from 455 organisations across all sectors, have not adopted a transparent approach to communicating information about pay scales, the provision of benefits and allowances, grading systems, job evaluation, performance-related pay schemes, and how pay decisions are made for different individuals or groups of employees.
The research also found:
- In the private sector, the most common benefits include: free tea or coffee (73%), Christmas parties (72%) and childcare vouchers (63%).
- In the public sector, employers are more likely to offer more than 25 days of paid holidays (80%), followed by enhanced maternity and paternity leave (68%), and training and development (66%).
- Just over a fifth of respondents still offer a defined benefit (DB) scheme to staff, compared to slightly over a quarter the previous year.
- Across all sectors, nearly three-fifths of DB pension schemes are now closed or winding down.
- Three-fifths of public sector respondents plan to make changes to their existing pension schemes in 2012. Among those making changes, three-fifths will increase employee contributions to DB schemes and two-fifths will reduce the value of their DB scheme.
- Among private sector employers that intend to make changes to their pension schemes in 2012, the most common change (60%) is in complying with auto-enrolment. When it comes to implementing these changes, respondents will seek help from their pensions provider (70%) or payroll systems provider (40%).
- Across all sectors, the most commonly provided benefits are: paid leave in excess of statutory entitlement – 25 days, excluding public holidays (65%); training and career development (65%); and childcare vouchers (63%).
- Across all sectors, the most common benefits restricted to certain grades or levels of seniority include: car allowance (62%); company car (54%); and private medical insurance (40%).
- Across all sectors, the most common benefits offered as part of a flexible benefits scheme include: dental insurance (46%); bikes-for-work schemes (44%); childcare vouchers (42%); and health screening (38%).
Charles Cotton, rewards adviser at the CIPD, said: “In order to attract and retain the brightest and greatest talent, the best employers offer attractive benefits packages to enhance base salaries.
“However, if employees don’t understand or value what they are getting, these employers are not likely to reap the competitive advantage they are seeking and other organisations will have no incentive to match them.”
Matt Waller, chief executive officer (CEO) at Benefex, added: “In the current economic climate, employers will need to think outside the box to create effective opportunities for engaging and communicating with their employees.
“With more organisations than ever looking at the implementation of retention and attraction strategies, it is key for employers to re-enforce the value that they place on their employees.
“It is therefore paramount to regularly communicate the full range of rewards and benefits available over and above basic pay and holiday entitlement.”
Read more reward and benefits research
In many organisations today, rewards or benefits packages make up a significant proportion of an employee’s salary. It therefore seems surprising that employees are being left in the dark about the full extent of their entitlements.
Reward is often linked to an employee’s performance against corporate goals, however, if it is not communicated effectively to employees then its intended benefit will not be felt. Moreover, if reward is to be both truly meaningful to the recipient and provide valuable insight to the HR department on the key performers across the organisation, it absolutely must be closely linked to recognition.
To ensure the success of a total reward strategy – incorporating strategic employee recognition – communication is vital, particularly in light of changes to employee entitlements through mounting economic difficulties. Once the strategy is fully understood, it will be embraced by employees and the programme will grow, ultimately delivering improved performance across the board and a more satisfied and engaged workforce.
In our experience poor communication is one of the primary reasons why benefits schemes do not achieve their expected potential level of response.
Organisations must consider how they will communicate effectively to employees to ensure that they understand the advantages to them, and what they must do to acquire them. HR departments must stop introducing schemes as merely a tick-box exercise without objectives for active participation. Sharing employee’s experiences via the company intranet or magazine and using on-site roadshows, posters, phone apps, e-newsletters, e-forums, chat rooms and SMS to highlight key benefits will have a noticeable impact on take-up rates.
Once employees see for themselves the benefits, then the employer’s job is done.