In today’s competitive economic climate, it’s more important than ever to get the best from your workforce. Nick Martinuale looks at ways to keep staff happy and productive


The UK has a productivity problem. According to the Office for National Statistics, our output is approximately 20% below the average in the G7 and significantly behind countries such as the US, Germany and France.

Against this backdrop, it is no surprise employers are desperately trying to persuade people to do more.

“There is a lot of evidence in a knowledge-based service economy that employee engagement is an important driver of employer performance, so we’re not just talking about happy and smiling employees,” says Duncan Brown, head of HR consulting at the Institute for Employment Studies.

“There are tonnes of studies that say providing a basket of good HR practices drives employee engagement, which in turn drives performance. That’s all relatively uncontroversial.”

More debatable, he says, is the role that pay, rewards and benefits play, which is not helped by the fact that responsibility for these areas is often divided across different teams in many organisations.

Employee benefits certainly have an important role to play in helping the workforce feel valued and looked after.

The trick, says Sarah Lardner, client director at Innecto, is to find the right package, both for the company ethos and its profile of employee. “It’s very much looking at the ethos and the demographic of the company – are they young, or if there are more male than female staff,” she says. “We ask employees what they want from their benefits package, and that can change. It has to be nimble and kept fresh.”

Many benefit packages tend to be focused around financial benefits which may appeal to Generation X, she says, but younger employees often prioritise more immediate rewards.”

One important factor in boosting productivity is creating the right environment for people to flourish.

Research conducted in 2015 by Red Letter Days for Business identifies four main pillars of flexibility as key drivers: where the work is done, the ability to perform personal tasks at work, being given high-quality tools to help people do their jobs, and recognition for hard work.

The importance of the work/life balance

“It’s interesting to see that promotion and extra annual leave are not as important to people as a good work/life balance and being recognised for hard work,” says Bill Alexander, chief executive of Red Letter Days for Business.

“These points are vital to take on board when developing a benefits package: consider flexitime over being allowed to buy holiday, and team nights out over on-the-spot cash prizes.”

But some of the more traditional benefits are still important.

“Employee surveys regularly highlight health-related benefits as being strong preferences,” says Nick Jeal, head of corporate marketing for AXA PPP healthcare. “Access to dentists, GPs or other day-to-day services are among the highest indexing preferences. Private healthcare is still highly valued, and even more so as employees have personal experience of the benefit.”

Younger workers in particular value personal wellbeing benefits, including professional development, often ahead of salaries and material benefits, suggests Liam Butler, vice president of sales, EMEA, at SumTotal, a Skillsoft company. “This is very much a sign of the times, where the economy is moving towards freelancing, flexible working and shorter terms of employment, as employees jump between roles to gain the broader experience necessary to climb the ladder quicker and more effectively,” he says.

Voluntary benefits can also play a significant role in engaging employees, but the key here is to provide choice for staff to choose what matters to them.

“Employees will expect a level of support from their company around life assurance, critical illness, healthcare and pensions,” says Jack Curzon, senior consultant at Thomsons Online Benefits. “They won’t expect lifestyle support from their company but they want that available to them. That will be things like childcare vouchers, bikes-to-work and retail discounts.

“But those benefits need to give an employee something better than they can get elsewhere, and it needs to save them money rather than getting them to spend money,” he adds. “Emails which say ‘save £1,500 on a TV’ aren’t about saving money; they’re just trying to incentivise people to spend by giving them an advert.”

Salary stretching

When set up and used correctly, such schemes could deliver annual savings in the region of £1,000 for each employee, suggests James Kelly, head of sales at P&MM Employee Benefits.

“Many voluntary benefits schemes deliver unlimited access to offers and discounts, meaning employees are able to make major savings without any need to change normal spending patterns,” he says.

“Giving staff the chance to stretch their salary creates a good association with the employer and acts as a motivational tool.”

Companies looking to really stand out from their competitors will need to think a bit more creatively, however, warns Lardner. “This can be quite innovative; for example, offering training in an area which is outside a core job role – coaching or mentoring, for example,” she says.

Other examples include the provision of technology such as the latest iPads or even magazine subscriptions.

Benefits can also be a useful tool to boost morale at particular times of the year, in a way that other elements of reward can’t.

“Our research found that one in four employees feels least motivated around Christmas,” says Jamie Mackenzie, marketing director at Sodexo Benefits and Rewards Services.

“This could be addressed by reminding employees during the winter months of the benefits available, and any new ones being added to the scheme in the new year. The summer months, on the other hand, can be a good time to build team morale through offering outdoor socials and introducing earlier finishing times on Fridays.”

This could also extend to promoting particular benefits at certain times.

Cycle-to-work schemes are a case in point, says Steve Edgell, managing director of Cycle Solutions. “What really drives engagement is giving employees what they want, when they want,” he says.

“When the cycle-to-work scheme is offered in a fixed benefits window, usually over a period of three weeks in either March or November, we tend to see less take-up due to the damp and dark weather. In contrast, when the scheme is offered all year round, we see a higher level of take-up as people feel they are actively making the choice to benefit from the scheme.”

Effective communication is also vital when it comes to using benefits to connect with staff, and again the message is to try something a bit different. “For some employees it’s a case of death by email, so think about posters, home mailing, presentations and videos on TV screens around the office, or even going back to basics and putting something on someone’s desk,” suggests Curzon.

“You could give them a chocolate bar with a customised sleeve on it saying ‘Go to your benefits website to see the latest offering’, or a fortune cookie which says ‘Did you know you have a cash plan through which you can save £250 a year?’ That can really work.”

Think young

For younger employees, it’s worth considering the use of apps or gamification, suggests Karen Heath, head of engagement at AHC. “The use of more visual communication such as video or augmented reality technology also appeals to younger generations,” she says.

“Employers must be conscious of how employees access information and use the right tools in their communication mix. Mobile devices are increasingly used to access information, so employers need to think mobile first.”

Yet other elements also need to be present if employees are to genuinely appreciate their benefits package. Brown’s research into the customer service sector – covering businesses such as hotels, restaurants and fast food outlets – found there was a correlation between the provision of benefits and high levels of both staff commitment and customer service.

“The interesting bit was that it wasn’t just a good package but an undifferentiated one, so there weren’t big status differences,” he says. “The more equal the package, the higher the effect on engagement, which I’d not seen before. But generally, people who feel involved, feel they have interesting work and are well rewarded are more motivated than others, particularly in customer service and care settings.”

It’s also important that employees feel appreciated, and this needs to underpin any benefits programme. Mike Morgan, chief executive of PeopleValue, suggests two simple ways of helping to create such a culture.

“The first is simply by empowering employees and managers to discreetly thank each other for their efforts,” he says. “Of course, there can be a reward involved but just a simple message to acknowledge effort is a powerful tool. The other is giving employees the ability to help shape the future of the company by voting on issues that affect them. This gives the staff a voice and makes them feel valued.”

Above all, though, employers need to ensure any attempt to motivate employees is genuine, and not just seen by staff as a token effort.

“Employers have to show that it is more than a tick-box exercise,” warns Neil Meninick, development manager of employee benefits at Sutton Winson, one of the founding members of the UNA Alliance.

“Each company has to really understand what is important to its workforce, focus the benefits accordingly and present them as being integral to the company ethos. Engagement has to be more than just a benefits package.”

CASE STUDY: Personal motivation

When voluntary benefits provider Personal Group wanted to ensure it was offering employees a package that would motivate and engage them, the starting point was to undertake surveys and focus groups to find out what staff really wanted.

The business developed an in-house version of its ‘hapi’ platform, which it called ‘Smile’ as a central point for all benefits.

Following feedback, the business introduced some new benefits, including salary-sacrifice cars, technology and holiday purchase. The opportunity to access new technology has proved particularly popular with its tech-savvy workforce, says HR director Rebekah Tapping: “We had the iPad Pro on the second day it was available.”

Already there are signs that the initiative is paying off. She says: “We had an 86% employee engagement score in 2014, and we’ve made an awful lot of changes since then with acquisitions, so we weren’t expecting such great results, but we got a score of 88% in 2015.”

This year, the focus is on creating a recognition scheme, “where people can earn points for prizes”, says Tapping. “Another focal point will be financial education and wellbeing.”