Meaningful benefits, such as personal car leasing schemes and student debt loans, improve employee engagement levels, according to research by Mercer.
The What’s working survey, which polled 30,000 employees in 17 countries, found that these types of benefits reinforce an organisation’s appeal as an employer, are immediate and cost effective, and can act as a foil for low pay increases and limited career advancement proposals.
Additional findings included:
- There is an enthusiasm for change in benefit provision, particularly among younger staff, providing an opportunity for employers to better engage staff and save costs during this period of financial uncertainty
- This, combined with restrictions on the generous tax breaks associated with traditional benefits, will add further impetus to employers reviewing their current offerings.
- When it comes to employee motivation and engagement, traditional benefits score relatively poorly compared to intrinsic elements of reward, such as having a sensible work-life balance, being treated with respect, and the type of work delivered.
- The desire by employees for greater choice continues to grow dramatically, although concerns remain that employees are not sufficiently able to make informed decisions when choice is available.
- Employees are looking for employers to use their bulk purchasing power to provide significant discounts on various products and services.
- For the right benefit, employees are willing to pay the full cost of receiving this benefit.
- Enthusiasm for alternative benefits is most evident among those aged between 16 and 34.
Eddie Hodgart, partner at Mercer, said: “More and more organisations are asking their employees what type of benefits they want to receive going forward.
“This usually involves some degree of additional choice plus the introduction of very simple, low-cost benefits that meet employees’ needs today, such as health screening, debt management schemes and personal car leasing.
“Benefit provision is all about affordability and desirability. If an employee cannot afford the benefit or sees no value in it, then they will not invest in it.
“So many younger employees are entering the workforce with student loan debts and then trying desperately to fund house deposits, buy a car, raise children, and cover their childcare and education costs.
“They do not care about the future – now is what matter to them. Employers that can offer alternative benefits which meet these lifestyle demands will succeed in areas such as attraction, retention and motivation of staff.”
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