Peter Crush rounds up expert opinions from Making Reward Personal

MRP room

So-called ‘Pension Freedoms’ are illusionary, because they create more questions around taxation and lifespan estimates which organisations are not providing help to explain argued Jonathan Watts-Lay, director WEALTH at  Work, to delegates at Making Reward Personal. “Product proliferation is also creating complexity, so expecting people to work this out on their own will only cause them to make mistakes,” he said. He revealed revenues to HMRC since pension freedoms were introduced have already been much higher than the Treasury expected, indicating, “people are not fully aware of the tax they are paying.” He added: “Employees need advice about what their options are – not least because people’s income needs change throughout their retirement spectrum.” Watts-Lay said requests it had received for help since flexibilities came have grown by around 80%. He said: “This proves a significant number can’t make the sorts of decisions they need to make on their own.”

“Good reward is a challenge not many businesses have nailed.” said Sodexo’s Jamie Mackenzie, remarking on research it has done which revealed 55% of HR practitioners still don’t have a formal reward and recognition strategy in place. “The single biggest reason for not having one is benefits heads not being confident in communications,” he added. He said: “Those who weren’t doing one were also worried about what the objectives of their reward programme should be, and how they should measure it.” Crack these issues though, and he pointed to the business returns it could bring – including data from Towers Watson which revealed those who do structure their reward strategy according to set aims and behaviours report 6% better revenues than those who do not. He said: “There’s nothing more emotionally strong than giving rewards for a job well done. You can’t under-estimate the power of it.”

Unum’s chief medical underwriter, Andrew Potterton told delegates at Making Reward Personal: “It’s time to take a fresh look at the world of benefits in order to re-engage people.” He said: “We are in very changeable times. People are going to work for longer – there are twice as many older workers than there were 20 years ago – while as new generations enter the workforce, there will be a generational shift in what employees expect.” He said looking after the health needs of older employees will be a major factor moving forward, whilst he also argued  employers will need to pay more attention to the ‘mindful; workforce’. He sais: “We are always-on. What employers will increasingly need to do is encourage disconnection. Most of our client’s claims are for stress-related problems. Companies need to build programmes where they show they’re looking after stress management.” He added: “Companies can’t just rely on providing benefits that enable staff to be off sick. The focus should be wellbeing. To be an employer of choice you need ever-more able to standout.”

Personalised reward is all about “rewarding the journey, rather than the destination,” said Tom Castley, MD (EMEA), Xactly Corp, to audience members at Making Reward Personal. “The old fashioned view – that people are lucky to have a job – can’t prevail.” According to Castley, the ‘journey’ is about rewarding people as they go along, rather than at the end of projects. “Research shows people get a far bigger dopamine hit – the thing that makes people feel valued – when they are given ‘in the moment stuff’ – like thank-you’s or instant recognition, as opposed to deferred benefits – like a bonus at the end of the month.” He said: “People remember the emotions of doing something, so give people a memory, rather than money at the end of the month that will probably get absorbed into paying rent, or buying food.” He added: “The best thing about emotions-based benefits is that they don’t have to cost a lot of money. To our salespeople, we offered staff a weekend in a Lamborghini for the first deal that broke the £1million mark. It cost us less than £2,000 to do, but we went from having no £1 million deals to four within six months.”

What could be more personal than being able to offer staff a brand new car – and pretty much any car that suits their particular needs – green ones for econ-friendly types; fast/sporty ones for singles; or family cars for those with a growing brood? This was the message from sgfleet’s Guy Roberts, on the benefits of car salary sacrifice – a perk that has experienced tremendous growth in recent years. “Not only is it one of the most personal benefits employers can provide, but it also offers employers and employees tax and NI savings,” he said. According to Roberts, cars it provides not only enable staff choose the models they want for less (around 30% less, he said), but offers employers a chance to spread their green credentials. He revealed average carbon emissions per km were 100.4g across all cars it provides, against the new car average of 124.6g/km for cars bought in the private sector. He said: “Good salary sacrifice is all about making sure staff get the right car for their circumstances and finances.”

Reward professionals need to behave like consumer marketers – if they want the spend on their benefits to have any impact. This was the message to delegates by Nigel Ferrier, executive chairman at communications consultancy, Ferrier Pearce. “If we don’t make stuff relevant, people will ignore it,” he said. “Benefits heads seem to forget that employees are still consumers. But nothing changes when staff walk through the threshold of the office. Benefits heads need to appreciate their messages are competing with every other marketing message hitting their people.” According to Pearce, only around 25% of companies communicate differently to specific employee groups, but he argued this would have to improve if benefits are to become more meaningful (and therefore relevant) to employees. He said: “In a recent pensions campaign with Barclays we created 21 personas and built case studies and bespoke material for each. Follow-up research revealed 82% found communication was more relevant to them and 60% said they felt they’d be given more control. Better still it lead to an 800% increase in people adding to their contributions.”

“Health insurance in this country is broken,” declared Carl Chapman, Barnett Waddingham’s head of workplace health at Making Reward Personal. “There’s confusion over whether HR see it as a benefit, or simply something to help people get back to work quicker.” He argued private medical insurance simply drives up usage, causing premiums to rise. He urged more delegates to think about trust-based medical cover, which is a solution companies as small as 15 members of staff are starting to use. “It allows organisations to build their own benefits structure as part of a larger whole, and in any surplus years the cash is transferred into the next year’s accounts.” He added: “But before all this, I’d advise companies to invest more into wellness initiatives. Around 42% of people think their job is detrimental to their health. Companies need to transform into gate-keepers, triaging staff through to the right providers to help reduce medical premiums.” He said: “We should care about this because we have a duty of care, but we should do it because there is also a return to employers too.”