How to… create compelling benefits
Compiling the right benefits offering can be difficult, but a good proposition is greatly valued by staff. Russell Davidson explains
Businesses offer employee benefits to their people for a variety of reasons: some do it because they want to attract and retain the best staff; others are driven by the desire to ‘keep up appearances' among their competitive set. Many do it for the tax-free allowances. And given the pensions automatic enrolment legislation, some just hope to tick off their legislative requirements.
Whether employers are drawn or compelled to provide benefits for their staff, they should always seek to gain maximum value out of their investment by creating a compelling benefits proposition; an offering from which their people will gain value and use while supporting the organisation's over-arching engagement and HR strategy.
Our Employee Benefits 2035 research report found that 71% of hospitality employees value the employee benefits offering highly when deciding where to work. With the right benefits offering, your perks and pensions could become a useful weapon in the talent armoury.
Russell Davidson is managing director of Davidson Asset Management
Three ways to establish a benefits proposition
1. Ask your people what they want To gain maximum return from your benefits investment, employers must understand which employees benefits are going to be embraced. It therefore makes sense to check which perks your people see the most value in and those they don't.
It's therefore no surprise that 82% of hospitality employees believe their benefits package should change as their personal circumstances alter.
The easiest way to support this is to ask them what they want. Find out what would make a difference to their lives, what they would appreciate, what you could offer to make you a better employer. Work out what's realistic and then, where possible, implement some of these choices.
Appropriateness is also important to consider as everyone is different. Make sure the benefits you introduce don't offend or alienate anyone. So make sure they align with your culture and your values and you won't go far wrong.
2. Educate and communicate In our study, while employees valued access to a company pension highly, two-fifths were more concerned with buying a house than saving for the future. A quarter were unsure what they should do.
Given the state of the UK housing market and the rising cost of buying a home, it's easy to see why interest in property is growing faster than pensions. And with very few employees really understanding benefits, for those in their twenties and thirties, retirement is still a long way away.
However, with the state pension decreasing, saving for the future has to become a real concern for employees. The key to this is education and, according to our respondents, it's the employer's responsibility to explain what the benefits are and how they can optimise their package (87%).
Great communication is the solution. The ability to help your people understand the value of their benefits packages - specifically how they can best use their benefits throughout their entire careers - will not only support improved decision making on their part, but also ensure that you're getting a return on your benefits investment.
3. Review and update Aside from payroll, employee benefits can be one of the most costly outputs a business may face. It therefore makes sense to ensure you are getting bang from your buck by reviewing your benefits proposition annually. What's proved popular, what's not been so successful? By putting in place clear objectives and measures for your benefits strategy from the beginning, analysing its success will be a simple task.
Once you are armed with the findings, go back to your people and ask them for their input. Find out why things you have offered aren't being taken up. It may be you need to do more to create awareness, or it just isn't of interest to the majority of your workforce.
Then take the opportunity to update your package. This isn't about completely replacing your entire offer, but instead refreshing some of the low take-up items with things that people have requested. By doing this, you continue to engage your people with their benefits choices and can make sure you have the most relevant package for the people you want in your workforce.
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