Four questions to future proof your employee benefits strategy
You’d think that given the need to attract an increasingly diverse workforce and the pressures that brings, there would be a high alignment between the benefits packages employers offer and what employees value.
Think again – recent research shows that while 57% of Australian employers believe their benefits packages are a major factor in worker attraction and retention, only 36% of employees agree that their packages meets their needs (2017-2018 Willis Towers Watson Asia Pacific Benefits Trends Survey).
Other recent research found that nearly two-thirds (64%) of employees thought their employer invested in expensive benefits they neither wanted nor used. 73% of employees also cited poor choice of benefits as the main factor in their decision to turn down a job offer. (Michael Page December 2017).
Employers are aware of the potential that a well structure and aligned benefits programme brings – but struggle to get the approach right.
Here are some key questions to think about:
What are the objectives of your benefits approach?
Overall, the Willis Towers Watson research found that the main objective companies have with their benefits approach is to ‘change package design to manage costs and influence behaviours.’ (However, the same research found that one in four companies don’t track the cost of benefits, so they have no idea of the return on their investment).
Being more specific, 61% agreed that their benefits help attract and retain staff and over half said they increased employee engagement. Other objectives include to increase employee well-being, improve business performance, develop company culture and look after staff financially.
Costs need to be controlled, but there must be a realisation that there are false economies that can easily be made.
Our advice - set bold objectives for your benefits approach and aim to be an ‘employer of choice.’
Do you regularly review your benefits approach?
Worryingly, research by leading benefits consultants Thompsons shows that many companies never review their benefits approach (‘Employee Benefits Watch’ 2018). Thompsons conclude that:
The message is clear – with the pace of organisational change faster than ever, employers who have taken a step back and reviewed their benefits strategy recently, perhaps in parallel with other organisational strategy reviews, are having more success.
There are publications that can be bought for those companies who want to benchmark their benefits (for example, ‘Australia Benefits Review,’ Mercer August 2018).
Our advice – regularly review your benefits approach – but not only what is in the benefits package but how they are communicated and how easy it is for staff to access them. Make sure any review considers the needs of the workforce as well as business objectives. Assess whether your vendors are providing good service and value for money.
Are you increasing the focus on family related and well-being benefits?
Healthcare, insurance and pension provision are the traditional benefits areas. However, non- traditional benefits are rapidly developing to fit with employee lifestyles and needs:
There has been an expansion in ‘family related’ programmes; such as help with child care and extended maternity leave
Wellness is increasing in importance. Areas to look at include behavioural and emotional health support together with lifestyle and fitness benefits
Financial well-being is a growing concern. Stress caused by financial worry is a major issue in the work place and companies are implementing initiatives to increase financial awareness and security.
A LinkedIn survey in June 2018 found that parental leave and medical insurance were the most valuable perks as rated by employees. Paid time off to take care of an elderly or sick relative rated prominently in a survey by the Society for HR Management (August 2017).
Our advice – keep family related and wellness benefit areas high on your agenda. Together with questions about flexible working, they’re points that candidates regularly raise during interviews.
Are you moving to a consumer grade benefits experience?
Finally, a more holistic approach warrants consideration of how benefits are accessed by employees and how the technology supporting them fits together. Respondents in the research by Willis Towers Watson reported ‘lack of engagement’ or ‘poor understanding of benefits programmes’ as key challenges.
Leaders in this field are providing a first-class employee experience based on increased online information, digital communication and use of mobile apps. While these applications are limited now, they are areas that will see a rapid growth as more vendors bring systems to the market.
Our advice – think about improvements that can be made in employee communication around benefits and consider the experience that employees have when accessing them. If you have multiple vendors, consider if they can be integrated to provide a seamless, flexible experience for employees – are there products on the market that can do this for you?