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Employee Benefits: Pleasing the people December 2011

Posted date: 29 November 2011

Paul Bartlett explains how to enhance work–life balance through your employee benefits programme, augmenting its value to both employees and the business.
 

The sentiment,“You can’t please all of the people all of the time” may be true, but unless you can find ways to please most of the people most of the time, your benefits programme is unlikely to be delivering best value for your employees or your organisation.
 
Of course, in a perfect world (from an HR perspective, at least), all your employees are roughly the same age, with the same priorities and interests. They are all paid the same salary, and want the same benefits. In this utopia design, you can start or set up a completely new programme from scratch whenever you like.
 
Back to reality and the chances are you already have a scheme in place, whether inherited or created by you. Your employees come from different backgrounds, have diverse roles and responsibilities, and have widely varying practical, emotional and financial priorities.
 
The recession has made a huge impact on how employees view their benefits packages. The Chartered Institute of Personnel and Development’s last Employee Outlook Survey (July 2011) showed that more than 40 per cent of employees had their pay frozen this year, and more than five times as many people (36 per cent) reported worsening standards of living than those whose standards had improved (just seven per cent). No surprise then that 24 per cent of the 2,000-plus respondents plan to have moved to a new employer for better pay and benefits by this time next year.
 
So as the real cost of living increases, most of us are looking for ways to save money and derive best value from everything we do. This is a key opportunity for us all, as employers, to increase satisfaction and drive engagement with our people by promoting and enhancing their benefits packages. It starts by treating our employees like customers.
 

The target audience

If you’re managing customer relationships, it’s usual to know who you’re marketing to, why and what the crucial points of connection are. While the practicalities may be different, the principles of “getting it right” for employees still apply at every stage of their time with you. Therefore, feedback and research play a crucial role in keeping your benefits programme up to date and relevant.
 
Employee surveys are an excellent way of collecting information and opinion, but how meaningful the results are will inevitably depend on your organisation’s average response rate, and on where those responses come from. If all your office-based people respond, but none of your manufacturing teams, then the overall view can hardly be considered representative of the whole. Segmenting surveys is one approach to dealing with this; another is to supplement research by sourcing information from elsewhere. For example, benefits can be a topic for discussion at team meetings and individual reviews; an item for employee forums and committee agendas; and a thread on intranet discussion boards.
 
However you choose to canvas opinion and feedback, it’s worth investing time in identifying and understanding the benefits needs and preferences of individuals and groups at different points in their “life cycle” within your organisation: from job application through to retirement. Every possible life and career change in between – studying for additional qualifications, setting up home, becoming a parent, being promoted – can impact on benefits choices and the way you communicate them; and should be treated as an opportunity to re-engage the employee in your programme. As well as providing a clear picture for communication purposes, by mapping available benefits against employee life cycles across your organisation, you may be able identify areas or populations where there are gaps or duplication.
 

Promote a programme

So how do you communicate your benefits programme? Organisations usually invest time and budget in promoting the initial launch of a scheme, and in briefing new employees on what’s available when they join. However, what happens after that? The brochure gets buried or the website is forgotten and little changes after those first months, apart from the occasional broadcast bulletin.
 
We know that employees tend to “switch off” at generic messages. We also know that people do not always understand or place enough value on their entire reward and benefits package, or appreciate what the company does for them. Communicating with different areas and populations of the business can be a challenge – particularly for global or very diverse organisations. There is also a risk in some cases that responsibility for personal communication with individuals about benefits falls somewhere between HR and line management, which means that although the operational questions get answered, there is no real structure or opportunity created for discussion and dialogue with the employee on an ongoing basis.
 
It’s certainly becoming more usual for organisations to publish annual total reward statements for individual employees, online or in print. Everyone receives a document of some kind that illustrates the type and value of benefits they have received, usually at a certain point in the year, such as at the end of the financial calendar. Yet this information is historic, and offers no insight into either the current situation, or what potential advantages the employee could be missing out on.
 
An effective way of ensuring your benefits programme is well received and used is to ensure each individual gets up-to-date, relevant details and is offered appropriate choices, based on their stage in the employee life cycle. By using this intelligence to send personalised, relevant and timely communications to your employees, you can proactively provide all the information needed to take advantage of the options available. For example, someone could have worked for you for several years and never given a second thought to childcare, and may even have forgotten that you offer tax-efficient savings through your voucher scheme. Once they’ve become a parent, their life and needs will have changed dramatically, and a personalised proactive communication from you as their employer will be very welcome. “I didn’t even need to ask” is potentially a powerful endorsement of your reputation as an employer.
 
To support key information, using relevant case studies and testimonials from current employees is an excellent way to illustrate the advantages of each benefit you offer. Ideally, you should also be able to offer live modelling tools that can calculate and demonstrate the possible impact and advantages for each person, based on the choices they make. Being able to “play” with the options available can greatly enhance the employee’s sense of understanding and ownership of their benefits package. By enabling them to visualise what different adjustments to their package may create, they can make informed choices. For example, how much their tax may reduce if they opt into a childcare voucher programme; or how cancelling an option they are not using would be a sensible move.
 

Genuinely flexible benefits

Are your employees missing out or locked in? From experience, we know that timing can be more important than the offers themselves: flexible benefits schemes cannot really be considered truly flexible unless individuals can opt in (or out) to suit their changing needs at any time of year. No-one wants to wait up to 11 months for something they see their colleagues being able to enjoy – yet it happens all the time.
 

Exchange if not sacrifice

Salary sacrifice programmes have always been popular, and continue to be a tax-efficient way to deliver valuable benefits (while saving you National Insurance contributions). As well as the usual options, such as childcare, healthcare and dentistry, it’s worth looking at additional ideas that will boost an individual’s buying power, perhaps by reducing energy costs, or providing access to courses and education that will help them develop key skills.
 
When sacrifice isn’t possible, salary exchange could be the answer. True, it may not offer the same tax advantages, but through salary exchange you can leverage purchasing power to help employees pay for high-ticket items. When properly targeted, they can also help you reach and engage with new and different segments of your employee population.
 
Earlier this year, we set up a programme for our employees to be able to buy computers, software, technological products and accessories from one of our partner suppliers using salary exchange. This enables them to budget payments over time without incurring interest penalties, and on some items they can obtain a discount they would not have been able to get otherwise.
 
Take-up has been staggering. More than 20 per cent of employees have already made purchases using the scheme, doubling the anticipated five per cent to 10 per cent.
 
The secret to successful salary exchange schemes like this is to base them around essential (or almost essential) lifestyle purchases, such as key technology. The idea is to make these items accessible to everyone through an attractive salary payment programme that means individuals won’t incur interest costs, yet don’t have to have the entire cash sum available up front. They may also benefit from a supplier discount, too.
 
This leads me finally to discounted voucher schemes, which are almost an essential offering for every benefits portfolio these days. We’re all keen to see reductions in our shopping bills, and discounted vouchers make it easy to budget and save money in a wide range of retail and leisure outlets. These schemes can enable your employees to obtain store vouchers below face value, or shop with certain suppliers and get exclusive deals. This can mean anything from cheaper holidays to reduced grocery bills, which can make a significant difference to household finances. Prepaid reloadable debit cards can be a useful tool for stretching the personal budget further too – not only are they an excellent reward mechanism, they can also be topped up by the holder each month and then used to earn cash back on purchases with partner retailers.
 
All of this would, of course, be an administrative nightmare without the right systems to make it all happen. More organisations are now recognising the wisdom of investing in the right technology to support their benefits programmes and employee engagement strategies. Making what you already have work better can represent better value than simply piling on more benefits into an under-subscribed programme; and by enhancing the employee experience and demonstrating your commitment as an employer, you’ll be achieving what you originally set out to do in the first place.

Paul Bartlett is Head of Reward at Grass Roots
Issue:
December 2011
Categories:
 

 

 

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