Organisations put a great deal of effort into providing a successful benefits package, but need to ensure that their investment is targeted effectively. Sonia Rach reports


On average, 25% of an employee’s total package is made up of benefits – but most people believe that figure to be less than 10%, according to the Hay Group. It appears there’s a perception issue here – so what should employers do? The main cause seems to be a lack of awareness that these benefits even exist – something that can easily be tackled.


Matt Frost, business development director of communications at AJG, says: “Communication can raise awareness. If you work at the same company for years, you may well have forgotten all the benefits you were once told about. If you really want to attract and retain people, you need to consistently tell them why they should work for you – because benefits are still a core component of why people go to work.”


So the foremost essential is communication of the benefits. Julia Howes, principal at Mercer, says: “Giving a simple report to employees every year is easy. Something that is a summary of all of their benefits and all of their pay in one place – including their monetary value.”


Staff will only begin to truly understand the financial investments that employers are making in them once they are consistently given a breakdown of their package to remind them, and it is only then that the return on reward investment can start to be measured.


But how do you decide what will actually motivate people? A rewarding package will depend on the type of organisation and the demographics of the workforce. Once the aspirations of the staff are clear, it narrows down the choices that should be available.


Howes explains that forcing employees to make a choice can help.


“If you just ask the question, ‘Would you value this?’ most people will say yes to everything. It’s when you ask them: ‘Would you prefer this or that?’ that they start to consider which one they really want.”


Richard Morgan from Standard Life takes a different approach. He says: “The advice I give to clients is that you need to think about this like a consumer market: you need to win the hearts and minds of your employees who are potentially customers.


“It’s about what’s right for the individual: elements such as work-life balance, looking after health or preparing for the future. Each generation has different work needs, it’s just about understanding them and catering benefits that are specific to them.”


Treating staff as consumers appears to be becoming increasingly common. As customers, individuals like personalisation, products that are specific to their own needs and requirements. By considering these, either based on demographic, life stage or age, it narrows down the specific benefits that should be offered.


People who value free fruit in the office and gym membership may not appreciate higher pension contributions, which in turn may not be appreciated by those who value childcare vouchers and family healthcare.


Of course, it’s all very well to implement these and get the communications right, but the question remains – how do you measure the return on your reward investment?


Looking at why employers have implemented a benefit in the first place is a good place to start, and highlighting key objectives can act as a measure of success.


Howes believes that this is best done at the outset. She says: “Different organisations have different desired outcomes, so it’s important to understand what it is that you are trying to achieve.


“A lot of organisations and clients want to focus on retention. Employees often say a benefit is valuable to them but whether it actually has an impact on engagement or retention are two separate things. Making sure there’s a good connection between the existence of the benefit, using the benefit and the desired outcome itself is very important.”


Additionally, engagement and productivity are further measures of ROI – but monitoring these is only possible through effective communication. Frost suggests that rather than looking at take-up levels, it’s more important to talk to people.


He says: “Employee censuses, focus groups and simply getting people together talking about their perception and feelings on the benefit are a great way to assess.”


Iain McMath, the chief executive at Sodexo Benefits and Rewards Services, elaborates: “It doesn’t have to be a formal survey. Actually talking to people works better and should happen more often. The trouble in a lot of these situations is that it’s not just about the benefits that are offered but about how they’re communicated and how often. It’s pointless measuring the impact of the benefit scheme if you haven’t communicated effectively.”


Furthermore, workforces are becoming more multi-generational. Recent government statistics found that by 2020, one in three workers will be older than 50, and further research by Canada Life Group Insurance found that two-thirds of people expect to work beyond retirement age. Communicating to a diverse set of employees means organisations need to move away from the ‘one size fits all’ approach.


Each generation will want to be communicated with in a different way so more than one medium will be needed. Ensuring all employees are approached and targeted in the relevant ways will give the best return on investment.


“It doesn’t need to cost loads of money – you can do competitions, videos, quizzes, email campaigns, poster campaigns and even merchandise,” adds McMath. “If you’ve a really good package, you’re perceived to be treating employees well and you’re innovative and creative, they’ll remember that.”


Referring back to the idea of thinking of employees as clients, Morgan adds: “If you think about consumer marketing, we are actually receiving messages in lots of different ways: annoying flyers in the post, emails, adverts, shop windows, word of mouth, social media. An awful lot of employers think of their staff just as employees, and they forget that they are people therefore do not cater to them specifically.”


This idea of external perception versus internal reality refers to the employee’s point of view.


AJG’s Frost gives an example. He says: “If you worked for a big firm that spent millions of pounds on marketing, but then every year around annual enrolment or benefit time you received this terribly written letter.


“The external perception you’d get as an employee would be that as a business you value new customers more than you do in inspiring your staff – so are they really going to give 110% next week? I think not.”


Ultimately, the return on reward can only ever be noticeable when staff are happy. Understanding employees’ needs, selecting the right benefits and communicating effectively is as simple as it gets.


The right reward and employee benefits package plays a big role in employee satisfaction. Morgan says in summary: “Without benefits, you’re just like every other business on the face of the earth. There’s so many different benefits but if you find what’s really right for the employees, then you’ve nailed it.”