- Employers should identify issues affecting existing and potential employees when creating their reward and benefits strategies.
- Tailoring benefits to meet employees’ needs can attract talent and maintain retention levels.
- An organisation should regularly communicate its benefits to current and potential employees if it wants to promote itself as an employer of choice.
Attracting and retaining top talent remains a key focus for employers in 2024, as seen in Ciphr’s April 2024 research, which found that retaining skilled employees (16%) and recruitment (15%) are some of HR teams’ top priorities this year. With this in mind, what impact can employers’ reward and benefits strategies have on recruitment and retention?
Recruitment and retention
Organisations can align their reward and benefits strategy with recruitment goals by understanding what employees most want. Tailoring benefits to meet individual needs can attract talent, so identifying the issues employees are facing and offering benefits that support these will be useful.
Attracting talent hinges on a reward and benefits strategy that aligns with both an existing workforce’s wants and what they value most, says Tom Nash, HR business partner at Pluxee UK.
“It’s important to regularly gather employee feedback through surveys and communication to understand this, as well as analysing exit interviews for insight on what other organisations are offering,” he says. “By prioritising this, businesses will gain intel to create a strategy that resonates with both their existing employees and talented potential recruits.”
In the wake of the Covid-19 pandemic and the cost-of-living crisis, the jobs market has become more employee-led, resulting in employers adapting their reward and benefits strategies to keep up with demands and to stay attractive.
Matt Ephgrave, managing director at Just Eat for Business, says: “It’s no longer enough to offer the bare minimum, basic benefits. If the aim is to attract and retain the best talent, employers’ mindsets have to shift from deeming perks as a nice to have, to an essential part of a reward strategy. They should invest in benefits that attract employees.”
Personalisation, flexibility and ease of benefits access are key recruitment and retention tools.
Employees will scrutinise what else is on offer, so employers should think about what competitors are offering and match or exceed this, says Chris Ronald, vice president EMEA B2B - incentives, rewards and benefits at BHN (Blackhawk Network). “By prioritising a well-rounded reward and benefits strategy, employers will attract top talent and keep them loyal,” he says.
Dianne Hoodless, board member at the Chartered Institute of Payroll Professionals and head of group compensation and benefits at TFG Brands, adds: “For industries with skills shortages or limited pools of highly skilled candidates, a reward and benefits strategy that has been developed with employees in mind can make a significant difference in attracting and retaining talent.”
Aligning with culture and values
The benefits an employer offers can be seen as a reflection of its culture and working environment. Understanding what matters most to employees is key to ensuring benefits align with organisational culture and values. For example, if an employer values work-life balance, offering flexible or remote work options could reinforce its values.
“Employers with a hybrid model might place emphasis on a collaborative culture, so their strategy may prioritise socialising, while health-conscious ones may favour physical wellbeing initiatives, such as access to fitness facilities and subsidised gym memberships,” says Ephgrave. “Busy working environments may benefit from strategies that place importance on mental health and avoiding burnout through employee assistance programmes that offer counselling and support.”
By regularly evaluating how different initiatives highlight their values, organisations can develop and strengthen their culture and brand. Leveraging a reward and benefit strategy can create a sense of giving back to employees beyond a minimum offering.
Kat Judd, chief people officer at Lucid, says: “It’s important for employers to implement strategies that ensure their values are felt throughout the employee experience. While this helps build a value-based culture, it requires effort from all teams to weave these values into everything they do, and then to reinforce them through regular and consistent actions and communications.”
A reward strategy that creates a sense of purpose and belonging can enhance employee satisfaction and engagement. Connecting with a mix of office-based, hybrid and remote staff can be complex, so implementing employee resource groups or networks can help them build communities, share a common cause, and foster a diverse and inclusive workplace.
“The desire to give back to their communities is strong among some employees, so paid volunteering opportunities demonstrate support for this value,” says Nash. “As more men take on primary childcare duties, employers can address this through equitable parental leave policies that support staff not just during their leave, but also when they return.”
Valued benefits
Today’s workforce is diverse, with a variety of genders, ethnicities, social backgrounds and ages. By offering meaningful benefits that align with the concerns and challenges of these groups, employers can ensure that employees feel listened to and valued.
Alan Price, chief executive officer of BrightHR, explains: “Younger generations prioritise flexibility, personalisation and holistic wellbeing, so benefits such as mental health resources, [wellbeing] programmes and student loan assistance tend to resonate well with them. Generation Z employees may be more confident in knowing what they want from their employer, but given the societal and economic changes that have impacted many over the last few years, older groups of employees are now turning to their employer for support.”
As a result of the current economic climate, employees may look to their employer for assistance. Providing access to discounts can help their salary go further, while steps to support financial wellbeing and literacy could reduce stress.
“The cost-of-living crisis has had a huge impact, so businesses that offer strong reward and benefits packages without necessarily offering higher salaries are appealing to employees,” says Hoodless. “Payslips and pay portals can be useful to communicate reward and benefits that employees may have missed. Making life easier should help to improve their experiences, retain talent for longer and create a positive effect when recruiting.”
Continuously engaging with employees to understand their priorities is key to remaining competitive and up to date. As discussions around mental health become more open, access to mental health and wellbeing support such as employee assistance programmes and virtual GPs is crucial.
“While health, dental and vision insurance are still important to today’s workers, future planning is more important to the younger generation due to the challenging economic environment,” says Judd. “Gen Z employees are looking out for transparent pension options that help to alleviate financial pressures, while childcare and fertility services are valued by millennials.”
Employer of choice
In order to promote itself as an employer of choice, an organisation should frequently communicate to both existing and new employees about available benefits. One way of doing this is by sharing stories on its website or social media about how staff are using these and what they do to improve work-life balance, equity and inclusion.
“By showcasing real-life examples, businesses can encourage employees to ask questions and actually use the benefits,” says Nash. “This proactive approach to promoting benefits can be a powerful tool for employee retention in the long run.”
Encouraging feedback on job search websites such as Glassdoor can also highlight an organisation’s rewards, benefits and culture.
“By focusing on developing their culture and creating a reward strategy that supports their employees, employers will find they need to do little in the way of proactive communications to promote themselves as an employer of choice, because they will have gained a reputation that emanates out,” adds Price.
Reward and benefits strategies, if crafted with employees’ needs in mind, can improve recruitment and retention levels and result in a happier and more productive workforce.
