We live in a time of change in the workplace landscape.
Millennials now encompass the majority of the workforce, with over 50% working as managers, decision-makers and leaders.
We’re also seeing the introduction of an even younger group of workers who hold entirely different values altogether.
Mix these groups in with a generation of workers living and working longer and it’s no surprise that companies are struggling to meet everyone’s needs.
To the rising wave of younger employees, benefits are becoming more and more important as a means of facilitating an ideal lifestyle.
According to one survey, 57% of people say that benefits and perks play a major role when deciding whether to pursue a particular job.
Benefits provide a major attraction to upcoming talent and can make your business stand out from the crowd in a competitive marketplace.
Benefits of benefits
Benefits don’t just help out your employees. They can help your business as well.
Employee benefits can help your business by:
- Increasing employee retention
- Boosting productivity
- Saving money
Employees who have and use a rewarding and engaging employee benefits package are less likely to move because they might not get the same benefits at another company.
This is essential to retaining your top talent from being headhunted. When your best and brightest have integrated your benefits package into their lives and their budgets, they feel invested, secure and less likely to leave.
This is important for your bottom line as well as the quality of your work. In the UK, the average annual turnover rate is 19% and it costs over £3,000 to hire a new employee.
If you employ 100 people, that’s an annual cost of more that £60,000 a year in staff turnover. By boosting your employee retention, you can make huge savings.
According to Reed, employee benefits means employee happiness. And happiness means productivity.
More than half of the employees surveyed said that employee benefits make them feel happier at work. When employees are happier, they work harder and more effectively.
Benefits that provide employees with a better work-life balance, an excellent pension, or flexible working hours help boost happiness.
Some employees are also prepared to accept additional benefits over a pay rise. Depending on your business model, this can be more cost effective that providing an annual pay increase.
What benefits do people want?
As we make our way through life, our priorities change.
The same is true of the benefits employees expect.
Gen Z employees favour housing contributions to help them get on the property ladder, while Baby Boomers are attracted to sabbatical options and health insurance.
The best way to know what people want is to ask them.
If you’re experiencing high staff turnover or notice that your employees aren’t using the benefits you offer, talk to them.
A survey of your employees will give you the best idea of whether your benefits program is stuff up to the job.
What benefits should you offer your employees?
The answer will depend on a range of factors, but your first step in reaching that answer is to talk to your stakeholders.
Find out what people want and see if you can cater to that need.
That being said, according to the CIPD’s reward management report, there are trends in the types of benefits companies offer.
The top 10 most common employee benefits are:
- Pension scheme – trust or contract-based
- Paid leave for bereavement
- Training and career development
- Childcare vouchers
- Occupational sick pay
- Employee assistance programme
- Christmas party and/or lunch
- Free tea and coffee
- 25 days or more paid leave for full-time employees
- Paid leave for jury service
Some benefits are offered by businesses to meet a legislative need or are backed by government.
Today, auto-enrolment for pensions is required by businesses and at the time of the survey (2018) child care vouchers were offered with government subsidy.
Benefits that employees really want are usually dependent on their position or status within the company that aren’t available to everyone.
These benefits include car allowances and company cars, flexible working options and private medical insurance.
Most businesses have benefits programs in order to attract, recruit and retain the employees they need to support their current business needs.
However, many companies seem to hold back the benefits that employees really want until they’ve reached a certain level.
But, this can be a difficult needle to thread.
Should you offer your benefits up front?
By holding back your benefits, you dangle a carrot in front of your staff to encourage them to work harder.
You then reward them for their hard work, service and loyalty with a nice perk.
But is this putting the cart before the horse?
Providing benefits upfront gives you happier, more engaged staff that feel rewarded every day. Work isn’t a hill to climb to reach a prize, work is the prize.
Part of reviewing your benefits program is making sure it is still fit for purpose.
The question of whether you should offer your benefits up front really depends on the goal of your benefits program.
Companies who use their benefits program to promote a fair work-life balance and company culture will benefit from offering benefits up front.
If your goal is to support future business needs, you might want to reward employees who help drive your business forward.
This can help define the behaviours you want from your employees moving forward.
What do your benefits cost you?
You HR team should regularly review what benefits you offer, why you offer them and how you deliver them, to see whether your initial expectations and assumptions still hold.
The real cost of benefits might be more than you think.
Even benefits that cost little to supply may turn out to be cost a lot to communicate and administer.
Similarly, benefits that are assumed to be high cost to communicate and administer may actually be cheaper than first thought.
If a benefit isn’t delivering value, don’t just cut it.
Take the time to explore whether there is a better way for you to communicate or deliver the benefit that could ultimately save you money.
Is your benefits program delivering on its objectives?
Is there more you can be doing to make your benefits more satisfying and cost effective?
If these questions are starting to make you think about the incentives you offer your staff, maybe it’s time for a review.