The traditional shape of the workforce has undergone a fundamental shift over the past year. Employee expectations and the metrics by which they judge the suitability of organisations will have changed significantly. Companies will need to assess their benefits structure, in order to avoid being left behind as we head towards the new working world.
Advanced understand the importance that employee benefits and reward schemes play in making your organisation an attractive prospect, not only for bringing in new talent but also in increasing job retention and employee satisfaction.
What are employee benefits?
Essentially, employee benefits are any form of non-wage based compensation. These benefits are designed as a supplement to an employee’s salary and can range from Dental cover and health care insurance to perks on travel such as company cars.
Research by Willis Towers Watson found that 75% of employees are more likely to stay with their employer due to the benefits package, with another study finding that 69% of those surveyed would choose one job over another on the basis of benefits offered. Clearly, comprehensive benefits packages are foremost in people’s minds when choosing which organisation is the right fit for them.
There is increasing evidence of the growing importance to have a clear structure around employee benefits and rewards in place within your organisation- a survey by Aviva found that 48% of people stated a desire for some form of wellness benefit when assessing an organisation. This suggests that people’s priorities have shifted to place a greater emphasis on work-life balance and wellbeing. Your employee benefits structure is the perfect opportunity to demonstrate your organisation’s commitment to meeting these ideals.
What are the four major types of employee benefits?
Traditionally, employee benefits have fallen into four main categories:
- Medical- most commonly medical insurance and dental care packages.Mental wellbeing is also becoming priority with accommodations being made for workplace counsellors and rewards such as days off being offered in order to encourage employees to unwind.
- Life- Life insurance policies and time off. Many organisations have begun to fold other benefits into this category such as gym memberships or access to on site leisure facilities,
- Retirement- Pension schemes and retirement funds.
- Disability- Disability insurance, as well as transport allowances such as on site parking and access to disability appropriate company cars.
These traditional benefits still remain foremost in many employee’s considerations: Aviva found that annual leave still matters the most, with 44% of those surveyed identifying it as one of the workplace benefits of greatest interest to them. Other traditional benefits such as childcare, parental leave and flexible hours, also rank highly.
What are the top employee benefits?
Research shows that demand for wellness allowances are foremost in employee’s minds with a focus on reward schemes that support mental and physical wellbeing such as gym memberships and mindfulness courses. 4!% of people surveyed stated that wellbeing is a priority for them when determining the suitability of a workplace, ranking it evenly with salary.
Apart from the shift to a wellbeing approach, organisations are finding that pensions and paid annual leave still dominate the rankings, with people placing greater importance on these more traditional benefits as opposed to newer approaches such as free meals or allowing dogs in the office space. These preferences also appear to hold universally across all age groups. This represents a shift in perceptions of employee benefits where it was previously assumed that the younger workforce placed a greater emphasis on social initiatives as rewards. Research seems to suggest that universally, the workforce is looking for financial security and emotional wellbeing above anything else.
How to make the most of employee benefits
Whilst it is a given that almost every organisation will provide some of benefit or reward scheme for their workforce, there still remains the question of how effective management in each organisation is at communicating benefits, and what steps can be taken to drive this process forwards. One in five employees feel that there are no benefits on offer to them, with 19% of people surveyed expressed a lack of interest in benefits that were offered, as they felt they were not relevant to them - Learn about the importance of employee engagement and staff turnover. The next most common reason for not taking advantage of benefits is a stated lack of information provided about what is available to employees within their workplace.
This seems to suggest there are two major areas in which organisations need to place their focus if they wish to ensure that employees are taking advantage of their benefits offered. Firstly, the importance surrounding relevancy. The research would suggest that many feel that outside of paycheques and annual leave, that they are receiving no additional benefits. Whilst their employers may feel differently regarding what reward structures are in place, this still highlights a disconnect between employer and employee regarding priorities. This also appears to support the research that suggests a preference for schemes structured around financial or emotional support. In order to ensure that their benefits are as effective as possible, companies should focus on having a smaller pool of rewards focused around those areas, rather than spreading themselves thin with numerous initiatives.
Ensure staff are aware of the benefits available to them
The second part of the issue is surrounding the communication of benefits. Traditionally, pension schemes, travel subsidiaries and other similar perks tended to be laid out in contracts or letters of employment, with little to no communication surrounding benefits after that point. This can lead to a certain degree of disconnect, particularly with long-serving employees, who may benefit from refresher communications around company schemes. Digitising this process, folding it within the HR function and utilising digital HR platforms is one of the most effective ways of pushing through constant updates to employees.
Advanced understand that employee benefits are one of the most effective ways for you to communicate your commitment to looking after your people. Our range of HCM systems can help make managing your employee benefits an effortless part of your people management process. Why not contact us today to find out more?