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What do workers want? The inside track on employee benefits

On the face of it, providing employee benefits sounds a pretty simple process. Decide what benefits you want you to offer, find a provider that supplies them and give your people access to them. In reality, that’s often not the case.

Any employee benefits portfolio needs to pull its own weight. In other words, provide value to your business and your employees, so both get real returns on the time and money invested in them. It should meet clear business objectives, such as helping to drive recruitment and retention, improving health and wellbeing, or reducing sickness absence.


It should also help drive what Aon’s Benefits and Trends Survey 2020 calls EVP or Employee Value Proposition – the whole employee experience of working for an organisation, rather than just the benefits package.

Clearly, just picking out the first couple of employee benefits that rank on Google isn’t going to cut it, but do businesses actually understand what the challenges are? 

The challenges for businesses

In Group Risk Development’s (GRiD) 2019 Group Risk Benefits Survey, more than half of all respondents (51%) said growing their business is the greatest challenge organisations currently face overall. In smaller businesses, this rose to 52%. However, bigger businesses (250+ employees) said their biggest challenge was recruiting and retaining good talent (56%).

Overall, recruiting and recruitment was the third biggest challenge for all businesses, pipped by a whisker by keeping on top of, and complying with, legislation (both 43%). But around a quarter of businesses also found looking after the health and wellbeing of staff (26%), knowing where to go for specialist advice (23%) and knowing what employee benefits to offer staff (22%) were all concerns.

When it comes to an overall benefits strategy, Aon’s 2019 survey found almost 90% of businesses said the top objective was employee engagement, with recruitment and retention second and third, while over two-thirds of business (67%) wanted cost management[1].

Providing the right employee benefits

While businesses may think they know what’s best for their employees, they really don’t. In 2018, Willis Tower Watson revealed that just two-fifths of UK workers (40%) thought the benefits on offer met their needs, compared to 61% of employers. Even given the 21% difference, the fact that less than two-thirds of employers felt the benefits are what employees want isn’t much of a confidence booster. Though where employees had the chance to tailor their package via flexible benefits schemes, employee satisfaction rocketed to 72% almost double[2].

This isn’t really surprising given that with the State Pension Age continuing to rise, people are working to a greater age than ever before. It can mean that five generations of people could be working together in the same business – all with different needs and lifestyles.

It’s a problem that employers know they need to get to grips with – and fast. Aon’s survey showed that only a little over a third of businesses (38%) said their benefits are currently meeting the needs of all generations in their workforce, while almost half (44%) admitted they didn’t. A huge 81% said their offering would need to change to fill the gap.

While 62% of organisations said they conducted research with their people to understand their needs, more than a third (35%) didn’t.

To get any employee benefits portfolio off to a flyer, businesses need to ask employees what benefits they’d get the most out of, whatever their age or seniority, and give them the tools to make that choice.

While life insurance, an Employee Assistance Programme, Group Income Protection (IP) and Private Medical Insurance (PMI) were the most common company-funded health risk benefits, gym membership, dental insurance, critical illness cover and a health cash were the most popular benefits available to employees voluntarily or via a flex programme[3].

Measuring success

Half of businesses (50%) already offered online and flexible benefits, while a further sixth (16%) planned on introducing a scheme within three years. Just 8% of businesses offered voluntary benefits only[4].

But providing the benefits is far from job done. The canny business continues to monitor take up and measure success. Despite all the hard work in getting to this point, a little over half (58%) said they were “somewhat successful” in meeting their objectives, but only a potentially soul-destroying 8% said they were “very successful”. Meanwhile, 9% of organisations didn’t bother to measure success at all[5].

Employers tend to measure success according to employee engagement, but what they consider as engagement can vary. Most employers offering online/flexible benefits counted engagement as when an employee chose a benefit, though just clicking on a benefit on offer was enough for some. Other points included an employee returning to select benefits at a later opportunity, telling colleagues about their positive experience and/or recommending them, while some companies collected and measured employee engagement as part of a wider business strategy.

Communicating employee benefits

It’s likely that employee engagement (or lack of) and how employers communicate (or don’t) go hand in hand. When it comes to flex schemes, communicating with employees is employers’ biggest challenge. Businesses also said that other problems included the impact on HR’s other duties, incorporating employee savings, design, and technology were other problems for businesses[6].

GriD found the employee welcome pack was the top method of communicating staff benefits (31%), followed by email (28%). Other ways of telling staff about the benefits on offer included the staff handbook and either their offer letter or on the day they started[7].

But employers have been slow to adopt digital methods of communications. Only 10% used a benefits platform or apps, and only 11% offered their people a total reward statement (TRS), which explains an employee’s total package – salary, benefits etc. For many businesses, it’s apparently ‘box ticked’ with that initial contact. Only 1-in-4 (25%) organisations communicated regularly (at least quarterly) about benefits[8].

Digital marketing methods can make keeping people informed easier all round. And, says Aon, are gaining ground. As employers look at ways to explain the benefits on offer and educate employees, webinars, microsites, bespoke videos and even app notifications are now beginning to appear as digitally-focused marketing increases.

Despite all this, only a little over a third (34%) of employers had an engagement strategy in place. More than half (57%) didn’t – suggesting that many businesses just wing it. Having an engagement strategy in place is really a must-have to help employers and employees alike understand, buy-in and manage their benefits, and allow organisations measure success[9].

While 4% of businesses had no idea where to look for help, support is at hand for those businesses who want it. In 2019, Aon suggested benefits advisers and providers could be used much more to “move the engagement dial.” Almost half of employers (46%) said they’d turn to benefit advisers and providers, and 44% would look to their internal communications team. Fewer than 1-in-10 (6%) would use an external comms agency[10].

Budgeting for employee benefits

Businesses are switched on to the idea that it’s important to increase employee understanding and engagement when it comes to their benefits and/or health and wellbeing – extremely important for 54% and very for 33%[11].

Of course, budget always looms large over any marketing initiative – especially for smaller businesses. Almost two-thirds of companies (63%) spend between £0 and £5,000 on communicating benefits[12]. Given that success depends on employee engagement, clicks and take-up, you might think this is pretty short-sighted.

But despite admitting how important businesses think employee engagement is, more than half (58%) said they wouldn’t increase spend[13].

One way to actually save money can be on the benefits themselves. GRiD found businesses that rewarded staff with one-off benefits, such as parties/celebrations, or a bonus or voucher (among others) spent almost £950 on each employee per year. Even micro-businesses with between 1 and 9 employees spent £436 on each person each year. A fifth (21%) of businesses said they preferred to provide one-off rewards because they were worried they might not be able to keep up long-term commitments. Yet Group Risk products can actually cost less per person, even if employer-funded.

And for companies who want to spend as little as possible, voluntary benefits which can also be fully employee-funded or part-funded provides the perfect opportunity to provide an employee benefits package.

The answer is to provide a mix of benefits that appeal to a wide employee demographic and allow them an element of choice. And if employee engagement and communications are a problem, choose an employee benefits provider to do the heavy lifting for you. Some providers provide communications tools and support, including written and digital comms, and engagement specialists who will explain exactly what their benefits bring to employees as part and parcel of the providers’ offering.

Sources

[1] Aon Benefits and Trends Survey 2019

[2] Only two fifths of UK employees are happy with their workplace benefits

[3] Aon Benefits and Trends Survey 2020

[4] Aon Benefits and Trends Survey 2020

[5] Aon Benefits and Trends Survey 2020

[6] Aon Benefits and Trends Survey 2020

[7] Group Risk Development (GRiD) 2019 Group Risk Benefits Survey

[8] Group Risk Development (GRiD) 2019 Group Risk Benefits Survey

[9] Aon Benefits and Trends Survey 2020

[10] Aon Benefits and Trends Survey 2020

[11] Aon Benefits and Trends Survey 2020

[12] Aon Benefits and Trends Survey 2019

[13] Aon Benefits and Trends Survey 2019

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