Most employers offer some form of benefits to their employees. In the past this was mainly limited to a company discount, or potentially some extra days’ leave above the statutory minimum. But now, as the world of work evolves, employee expectations have changed, and there are many options and a range of ways of delivering them.
Benefits mean different things to different people, it can be a minefield for employers to get it right. But to do that, you first need to understand the impact different benefits may have, and what the impact can have on your business.
Understanding The Variety In Benefits
The biggest thing to understand about offering any kind of employment benefit is that one size does not fit all. Gone are the days when all employees were happy with a basic benefits package, some benefits such as 25 days holiday plus bank holidays and company sick pay are expected as the norm. Employees in general are more discerning about what their benefits look like, and if they are truly beneficial to them as an individual.
One of the easiest ways to understand this difference is to look at the generational age gap. When you look at mature employees, they are more interested in pensions, private healthcare and wellness benefits. In fact, according to a study by MetLife over 90% of the Baby Boomer generation want their employers to provide health insurance – including medical, dental and vision.
The younger generation of employees are generally more interested in additional leave, a greater focus on work-life balance, flexible working schedules, mental health benefits and parental leave benefits.
Of course, this maybe a generalisation, but it does highlight the fact that one type of benefit is very unlikely to suit all your employees. So, if you want to retain a diverse workforce, you need to have more flexibility in your offering. This may mean providing a suite of benefits for each employee to choose from, or implementing a credit system so each employee can elect for a different benefit at any point during their employment.
Benefits And Retention
Given how cost and time intensive it is for companies to hire new staff, it’s no surprise that retention is a key focus for many. Holding on to the top talent they have acquired is a long-standing issue, and we are always looking for new ways to reduce employee turnover. Benefits are a fantastic way to incentivise employees to stay with your company, as well as:
- Helping to feel valued
- Boosting productivity
- Creating a positive company culture
- Improving morale
Because benefits go beyond the compensation package for the role, they are a good way to showcase the value you put on your employees, and can be a significant factor for keeping your employees within the business. Especially if the benefits you offer are better and more flexible than the competition!
Remembering Wellbeing
All around the country we’re seeing a rise in the levels of stress, burnout and general unhappiness in our workforce. For example, over the last few years over 55% of employers have seen an increase in the number of stress or mental-health related illnesses in their workforce, and a rise in costs with it as employers try to manage employees on long term sickness or worse, leaving employment altogether.
Employees are becoming more in-tune with their own wellbeing, and making sure they can achieve a healthier work-life balance. If their workplace is supporting them in achieving this, then studies show employees are more likely to stay longer with the company. Including a selection of wellbeing related benefits in your total compensation package is a great way to achieve this. So as well as having employees who are physically, mentally and emotionally healthier, your business will benefit from increased retention rates.
Bonus Tip: Communicate Benefits Clearly
Before we leave you, we wanted to share a scenario we see all too often. A business has really understood the value of offering the right benefits package for their employees and have created an amazing suite of options to choose from. But employees didn’t understand the full value of what they were getting. This isn’t surprising – research shows that employees typically underestimate the full value of their reward package by up to 30%. That means up to 30% of your investment in benefits is potentially going to waste. So no matter which option you choose, remember that communication about your benefits is going to play a big part in their success.
As a business grows its processes must evolve, but employee benefits are often one of those that gets left behind. There may be challenges involved in changing your employee benefits schemes, but reviewing and listening to employee feedback on a regular basis can be a vital element in preserving the organisation’s culture during periods of growth. Even if you’re not pursuing growth, understanding the importance of benefits and how they impact employee retention is incredibly important.
If you aren’t sure where to start, we can help with a review of your current benefits structure and a proposal for improvement and management in the future. For more information, contact one of our experts today or telephone us on 01483 362732.
References
- Ranstad
- Obsidian HR
- AON
- Business Leadership Today