We all like to get our money’s worth and in business this is even more critical. After all, profit is the name of the game. Yet to make money you have to spend money. And that includes spending money on employee benefits - both legal minimum requirements and the perks that make you more attractive as an employer.
Employers typically spend around 20% of payroll on employee benefits. That’s a pretty hefty chunk of money. So how can you make the most of your employee benefit offering? We’ve got a range of ideas to help you generate an exceptional return.
Remind employees what’s on offer
Telling new staff about their benefits package when they first join is a great way to kick off your benefit communications. But with busy lives and lots to take in during their first week, people need constant reminders about what they can access, how it will help them and how to use their benefits.
A great way to remind employees of the value of their entire reward package is with total reward statements. Typically presented as a pie chart, they show the value of different elements of the reward package including salary, pension and any other compensation as well as all the benefits you provide.
This reminds staff that you pay them much more than the salary they see every month. However, reward statements have historically been provided on an annual basis either online or in print. As such they provide a snapshot of an employee’s package at a certain point in time.
While this is better than doing nothing, annual statements have their limitations. For example, if an employee has a counter offer from a competitor, you might want an up-to-date statement to remind them of the total value of their package to entice them to stay.
However, any changes since the last statement won’t be captured. The alternative is to hook up your HR database to an online total reward statement portal to provide real-time reward statements. Whether this is a possibility for you will depend on the maturity of your systems and data. And it could just give you the cutting edge when it comes to retaining staff.
This is a good start. But what more can you do to make the most of the benefits you offer?
Ongoing reward communications
If your organisation reviews salaries each year you’ll talk to your staff about their pay at least once every 365 days. But when do you talk to them about your employee benefits?
To keep workplace perks front of mind, it’s important to have a strategic communications plan. It should:
- include every element of your benefits offering
- remind people what's available and how to access the benefits
- communicate via multiple channels
- provide targeted messages to different employee populations
- use plain English and avoid jargon
It’s a good idea to use communications from your benefits providers to save time and prevent you from reinventing the wheel. But you need to incorporate them into your strategic communications plan rather than taking an ad hoc approach.
Make money and tax simple
Salary sacrifice benefits provide better value for money than paying for the same benefit from net pay. Explaining this to employees isn’t always straight forward but it is important.
With low levels of numerical literacy in the UK - 49% of the working population have the numeracy we expect of primary school children - it’s important you do the maths for your staff. Make it easy for them to understand the advantages of salary sacrifice by working out the savings.
Helping your colleagues to understand what’s in it for them - whether that’s more money in their pension pot or lower monthly amounts to secure a fancy new car benefit - will encourage more employees to take up your offering.
Provide what your employees want
Last but not least, it’s critically important to provide the benefits your staff actually value. This is at the heart of successfully delivering a great package. And your competitors are seizing the initiative with 43% having already surveyed employees’ views on benefit plans or doing so on an ongoing basis. And another 39% have planned activity in this area.
Research from Aviva reveals that understanding employees’ benefit needs is at the heart of improving takeup. Because the top three reasons for employees failing to use the benefits on offer are:
- Lack of interest
- Benefits not relevant
- Lack of communication
You can address all three of these challenges by asking employees what they want, then providing the benefit and communicating your entire package thoroughly. Which will ensure you’re generating maximum ROI on your benefits spend.
Car benefit continues to be a sought-after perk. Find out how our scheme can save you employer NI contributions and stretch employees’ pay packets further.