The 2012 research finds employees were less dissatisfied with a pay cut than a pay freeze if their employer explained the rationale behind the decision. However, the same survey reveals that it’s not just the act of communication that is important but also the quality of the communication. I think it’s fair to assume that similar findings would apply if we looked at the relationship between employer communications and satisfaction with the benefits on offer.
That said, while our Reward Management surveys indicate that employers tend to be more transparent around benefits than they are around pay, it also shows that few organisations take a holistic approach to communicating the value of the whole reward package. Just 15% of employers use total reward statements, either paper based or electronic, to engage with staff about benefits and pay, though this varies by sector and size of employer.
However, the understanding of those on the receiving end of the communication is also important. To help staff grasp the role of the benefits package and strategy, around a quarter of employers offer free financial education and advice to all employees, according to the CIPD’s Summer 2012 Employee Outlook focus, published July 2012 . With twice as many employers predicting a growth in the benefits budget this year as forecasting that it will decline, and many employers reporting that, ideally, they would like to switch the focus of their reward spend from pay to benefits, the danger is that some of this money will be wasted if employees are either unaware of, or do not understand the benefits on offer.
Charles Cotton, reward adviser, Chartered Institute of Personnel and Development (CIPD)