For many businesses, their employee benefits programme represents a significant investment. It is reasonable therefore to expect something back in return.
But what return are they looking for?
For different organisations this will be different things. It is often influenced by the personal views of the organisation’s top tier, which, in turn, influences the organisation’s culture.
Cost versus investment
For some, the cost of pensions and benefits is just that: a cost. A box that needs to be ticked. In which case, the objective is most likely to be to minimise the cost and hassle.
For others, their benefit spend is seen as an investment in their business. For them, being able to deliver an effective, competitive reward package is all about attracting and retaining the right people. Where this is the goal then the first step is to understand exactly how employees are using and engaging with their benefits package.
Aligning employee reward and business value
That is where having a fully integrated flexible benefits platform can give a real advantage. Having a single place where all employees select and manage their benefits lets employers see what is going on under the bonnet. This is invaluable in terms of shaping their future benefits structure and communications.
A good technology platform also helps deal with what seems like constantly moving goal posts: pension freedoms, annual allowance tapering, the lifetime individual savings account (Lisa), new childcare voucher structures, to name but a few. And by keeping on top of regulatory changes employers can build their reward package to include the most up-to-date offerings and target these to the right people at the right time.
The ability to target not just certain benefits, but the communication messages around them, can strongly influence employee engagement, and therefore the return on investment. For example, the drivers in attracting and retaining graduates will not be the same as for mid-career professionals. And certain issues will only impact certain individuals, such as the reduction in pension allowances.
Getting the measure of benefits programmes
So how do employers know if it is all working?
Well, of course, many of the measures are quite soft and difficult to pin down to a specific cause, such as employee engagement, staff turnover, absence rates and productivity. A number of data sources need to be pulled together to give employers the bigger picture.
That is where it can help to have clear objectives around employee behaviour.
Platforms can really help in understanding employee behaviours within different demographic groups and within different parts of the business. Supplementing this with more Google Analytics data can be even more powerful by providing insight into the impact of communication campaigns and employee journeys through the platform. This can be a really effective way of understanding which techniques are working and taking action quickly to change things that are not.
Having easy access to management information (MI), understanding employee behaviour and making better informed decision is not only key to helping manage the talent pipeline, but has the added bonus of reducing HR costs and administrative effort.
So even an organisation that is looking to minimise costs, may do well to start thinking about its benefit spend as an investment rather than a cost.
Alan Ritchie is head of employer and trustee proposition at Standard Life
