When the future is uncertain, every element of your organisation’s costs come under scrutiny, including employee benefits. Demonstrating value for money has become an increasingly important part of effective benefits management, making it essential to know how to lever budget stretching opportunities across the benefit life cycle. With input from three HR leaders, we explore how you can maximise your benefits budget without cutting back.
Employee benefits - a tool for change
Changing workforce demographics. Political and economic uncertainty. Cost control. All these factors and more have created a challenging backdrop against which organisations’ benefit packages are struggling to perform:
- 50% of enterprises think their current benefit offering fails to meet the needs of all generations
- Almost 90% believe they will need to adapt their programmes to meet the needs of future cohorts
- 97% of companies believe employees’ expectations of work are changing
But it’s not all doom and gloom. In fact, employee benefits have the potential to solve a wide range of organisational and employee challenges. As long as you adapt your programmes in the right way.
In this white paper, we look at the complete benefit life cycle and share insights from three HR leaders to help you get the most from your employee benefit spend.
Deliberate programme design delivers better ROI
Unless you regularly review your benefit programmes, what was once fit for purpose may no longer be relevant. And irrelevant benefits reduce the value your total benefit package provides for the organisation and employees.
Glenn Jones, author of Human Resources Changes the World, is a global director level HR consultant who solves people problems for large organisations. He believes that, following a decade of low salary increases, staff have become more sceptical about companies’ reasons for change: “If a new benefit is being introduced because it’s going to be commercially beneficial to the company, employees will see straight through it. How you get to a place where you’re ready to introduce a new benefit is important too.”
Striking the right balance between employee need, wider HR plans and corporate objectives is crucial. Particularly if you want your benefit schemes to offer value for money.
Aligning benefits to organisational goals
Attraction, retention and engagement are often the main focus for any HR reward or benefits leader. But there are lots of other scenarios where benefits can also add value:
- Cutting or controlling costs - enhanced employee benefits can be used to offset the impact of wider cost-cutting exercises or to soften the impact of low or zero wage increases. Benefits are often a particularly useful form of leverage when negotiating in unionised environments.
- Supporting wider corporate initiatives - benefits can assist a range of organisational goals like reducing CO2 emissions, supporting employee wellbeing or making your workplace more inclusive, diverse and flexible.
- Responding to legislative and tax changes - with fewer benefits available via salary sacrifice and the removal of childcare benefit from employers, introducing new options or getting the most from your remaining package has never been more important.
- Supporting a more diverse workforce - attracting, engaging and retaining people from different backgrounds is key to enhancing your company’s innovation and problem-solving capability and also your bottom line. Benefits can help you do this.
Taking time out to consider what these forces mean for your benefits programmes will pay dividends. But it’s equally as important to understand what your employees want.
Establishing employee need
Doing what works for your business is one side of the benefits coin. But without meeting employee need you’re throwing away good money after bad, as well as time and effort. Carolyn Tipper is Head of HR at PossAbilities, a social enterprise where every penny counts. She highlights the importance of only investing in benefits that employees actually want: “People often pitch a great idea and get others behind it. And because that’s what they want, they think everybody’s going to like it. But in reality you really don’t know what people actually like so you have to go and ask them.”
Rich Roberts, Group HR Director at WYG agrees: “There’s only any point in offering people a benefit if they want to take advantage of it. When it comes to your existing package, take up is a good indicator of what people value and where to continue investing your budget.”
While take up rates, benefit specific questionnaires and employee engagement surveys provide a high level overview, subjective feedback will help you achieve a more detailed understanding of employee need. At PossAbility, Carolyn’s team holds employee forums which enable the business to hold two-way conversations with employees. In fact, all three HR leaders we spoke to highlighted the importance of talking to employees and listening to their feedback.
Combining information from all these sources will give you a clear view of your end goal and a commercial and people centred business case.
“There will be many factors that inform how you spend your benefits budget including commercial cost savings or aligning with the green or wellbeing agenda”, says Glenn. “By setting out your stall clearly at the beginning, you’ll know what you’re going to end up with. And you’ll be able to demonstrate that you’re making a change which benefits your employees for the right reasons.”
Download the rest of this free guide to discover: Download Full version
- Section 2 - Controlling cost, workload and risk for better benefits payback
- Managing benefit cost
- Selecting the right provider
- Delivering benefits without extra headcount
- Managing physical benefit risk
- Section 3 - Employee engagement is everything
- Developing a consumer grade experience
- Communicating the benefit
- Section 4 - Measuring programme impact
- Capture hard data
- Subjective feedback is also important