Could an economic pick-up lead to a new benefits approach that retains and engages staff?

Need to know:

  • The UK economy is growing strongly, causing concern about staff retention.
  • Benefits around company culture, flexible working, health and choice are likely to be in demand.
  • There are some quick wins that could help make an immediate impact.

News that the UK economy grew by a stronger-than-expected 2.1% in March, coupled with the Bank of England’s forecast for overall growth of 7.25% in 2021, should be welcome news for employers and the country as a whole.

But with an economic recovery comes the risk that, after a year of worry and periods of lockdown, furlough and homeworking, employees may be tempted to move on, seeking fresh challenges or a change of scene after what has been a difficult period for everyone. Alistair Dornan, director of organisational wellbeing consulting at Gallagher, says: “We’re expecting to see a much higher degree of movement between jobs, at all levels, over the next six months, because as people have been working from home, they are less connected to their colleagues and work environment and looking for change. Keeping key people you don’t want to lose will be a difficult challenge.”

Benefits packages will have an important role to play in helping persuade people their future lies with their existing employer, and some organisations are now looking to incorporate these into wider retention strategies. A good benefits offering really isn’t enough by itself, says Sue Pemberton, head of employer services at Premier. “With more people willing to move, retaining key staff will also depend on creating a feeling of inclusion and togetherness within an organisation, or ‘culture’ as a short-hand,” she says.

“The pandemic revealed a lot about how [employers] actually live up to their values. Those that went out of their way to support employees, aiding those suffering from stress or mental health problems or those in financial difficulties, will have built up a store of goodwill from staff and endeared themselves to employees, making retention and recruitment that much easier.”

This also means a broader definition of what comes under the benefits umbrella, suggests Jeff Fox, principal at Aon. “This can often include flexible working, enhanced leave arrangements and opportunities to develop, among other things,” he says. “Good car manufacturers sell the overall proposition and it is increasingly the same with employers.” The pandemic has led to a greater emphasis from employees on environmental, social and governance (ESG) credentials, he adds.

Employee choice

After a period in which many people have grown used to not commuting into offices and potentially taken stock of what they want out of life, flexible working is likely to prove a major factor in whether employees look to move on. According to a recent candidate survey published by CV-Library in March 2021, 18% of staff said they were looking for a new job as they wanted more flexibility, with 38% citing this as the most important factor in any new position, behind reasonable hours and salary.

“Forward-thinking employers are already reconsidering their benefits strategy with the past year in mind,” says Ginger Maseda, head of global talent acquisition at Bullhorn. “They understand the elements of working from home that people appreciate: spending more time with family, avoiding the commute and so on, and they’re working to integrate these benefits into their strategy. Some major employers are even offering the ability to work from overseas for some months each year.”

Another trend that could become more prevalent in the wake of the pandemic is the concept of giving employees choice over the benefits they receive, believes Fox. “The death of flexible benefits has been called many times in recent years, but the experience of the pandemic has strengthened the business case to offer choice,” he says. “There is a resurgence in flexible benefits and many employers are taking a fresh look.”

It’s a strategy that makes sense from a recruitment and retention perspective, believes Amanda Lennon, partner and specialist in employment law and HR at Spencer West, and a former HR director. “Lockdown has shown us that we are all individuals and what works for one person will not work for another,” she points out. “For some employees, the freedom and flexibility that working from home affords has been a dream, while others are craving the buzz and connection of the office. Employers can no longer afford to make sweeping decisions and assumptions about their workforce.”

Focus on healthcare

Unsurprisingly, the pandemic has also sharpened people’s appreciation of health-related benefits. “There is a lot of flexibility in what employers can offer,” says Debra Clark, head of specialist consulting at Towergate Health and Protection. “For instance, health and wellbeing policies can include funds for employees to spend how they wish, such as on a life coach, nutritionist or a personal trainer, so benefits can be very tailored. It’s also a good idea to extend benefits to family members, as this can ease stress outside of work for employees.” Benefits such as employee assistance programmes (EAPs) and support for mental wellbeing, musculoskeletal issues as well as serious illness such as cancer are all likely to be valued, but Clark also suggests undertaking a staff survey to establish what employees would like.

Mental health is another area in which support will be needed, both from the point of view of employees and the business itself. “The past year has seen a huge increase in mental health awareness, with employee mental health topping many businesses’ list of concerns,” says Catriona Macdonald, founder of True HR. “[Employers] that offer awareness days or mental health first aid training will be perceived to be ahead of the curve.”

It’s possible there may be some quick wins for those who have yet to give much thought to how to adapt their benefits strategy to a more favourable economic climate. “Nothing is ever too late,” says Nick Greenston, CEO of Retinue Talent Solutions. “If you employ a group of dog-lovers, introduce a ‘take your dog to work’ day; if you have individuals who have gone the extra mile then perhaps offer them a bonus paid holiday; for some employees with children, provide a babysitter once a month so that they can go out on a ‘date night’ with their partner or send in someone to get some chores done at home for them.”

Recognition measures

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Simple measures to recognise the contribution employees have made over the pandemic can also have an immediate impact. “HR professionals need to develop a reward and recognition scheme with an offering which can be enjoyed by all and is tailored to suit each individual’s needs,” says Danni Rush, chief customer officer at Virgin Incentives and Virgin Experience Days. “This can present itself in different ways, for example using gift cards that can be redeemed flexibly at a range of outlets or offering early finishes and increased annual leave.” Group experiences, whether virtual or in-person, can also help with building up morale, she adds.

Some, though, fear time may be running out to prevent a mass exodus. “What will really entice employees to join or remain at an [employer] is the way in which its staff have been treated over the past year,” says Andrew Drake, client development director at Buck. “Times of adversity, like the pandemic, have shone the spotlight on bad practices in the workplace such as poor communication, ultimately resulting in low productivity and a disengaged workforce. There is no doubt that Covid-19 will have a long-lasting impact on working lives, so nurturing a strong company culture will be essential for ensuring employees remain well, motivated and productive.”