Getting the most out of your employee benefits
When was the last time your organisation reviewed the benefits you offer to your employees? A clear goal of what you’re trying to achieve with your benefits can help to ensure that you maximise your return on investment for your benefit spend, and that any changes will complement your existing benefits. Employee feedback is also important when considering the benefits you offer, do you rely on anecdotal feedback or do you gather formal feedback? When reviewing your benefits package, below are four things for to consider.
The right mix: It’s cliched to say variety is the spice of life, but it is a cliché for a reason. Variety keeps things interesting, and the same is true of employee benefit schemes. Offering superannuation and multiple insurance benefits to employees such as life insurance, income protection and health insurance is practical and can help to ensure your employees are provided for when they need it most, however, it may be difficult to get employees excited about your benefits. Offering other lifestyle benefits such as additional annual leave, wellness initiatives or something unique to your organisation can help to get employees talking about your offering.
We also know that employees value benefits differently depending on their stage of life and individual circumstances. The benefits that appeal to an employee just starting their career will be different to one with a mortgage and family, and the employee that is about to retire will value something different again. In order to attract and retain talent, it’s important to be able to appeal to all.
Flexibility: Building on appealing to employees at different stages of life is the idea of flexibility. Flexibility allows employees to pick and choose from a suite of benefits to build the benefits package most suitable for them. As an example, if your organisation provides employees with life insurance cover equivalent to four times their salary, the employee could choose to reduce their cover to two times their salary and then use the premium saved on different benefits such as discounted shopping vouchers. Flexibility allows employees to tailor their benefits packages to their circumstances and takes the onus away from the employer to design a one size fits all scheme.
Of course, providing flexibility also comes with some challenges such as the increased administration of managing individual benefits packages as well the impact on payroll. You’ll also need some clear rules in place around how often employees can change their benefits. Perhaps most importantly you’ll need to consider your duty of care as an employer. If for instance, in the Life insurance example above, the employee had been able to opt out of the benefit entirely, would your organisation be comfortable with this or does there need to be a minimum level of cover in place. If you are going to introduce some flexibility to your organisation, then similar to a good incentive scheme, transparent scheme rules can help to ensure proper governance of your benefits scheme.
Communications: Good communications are key to ensuring employees are aware of all the great benefits they have access to as part of your organisation. Often employee benefits might be introduced to an employee through their on-boarding and then seldom mentioned again. The responsibility is placed on the employee to find further information through the intranet, HR or colleagues. It is important to consider the best communications channels for your organisation to engage with the maximum number of employees and whether the various parts of your organisation like to be communicated with differently. One way to make your communications stand out is to develop a banner or theme specifically for employee benefits or to dedicate each month to promoting a different benefit.
Return on investment: To be able to judge whether you are receiving a good return on investment for your benefits, you first need to be able to define what you’re trying to achieve with the benefits you’re offering and how much the benefits you offer cost the organisation. Understanding your goals should make it clearer the metrics you need to measure. If for example, you have a focus on employee wellbeing, then a reduction in absenteeism could be considered a good return on investment. Employee benefits often aren’t cheap to provide, so measuring whether you’re getting the desired results from your benefits is important.
Of course, in some cases, traditional metrics wont’ be available, and that is why employee feedback is crucial. Feedback can be gathered in several different ways and should help you to understand what benefits your employees value the most. In some cases, the results may surprise you as it may be the (relatively speaking) cheapest benefits to provide that employees value the most, such as the daily fruit basket. Understanding how employees value the different benefits you offer versus the cost of providing those benefits can help you to adjust your scheme and maximise your benefit spend to get the most employee value.