Need to know:
- The 'Great Resignation' is underway, forcing employers to work even harder to attract and retain staff.
- Pay is one way but employee benefits and reward packages are another major focus.
- Flexible working, mental health and social value are all in demand but some are questioning the use of more ‘gimmicky’ benefits.
After almost two years of pent-up frustration among employees, as a result of a stagnant jobs market throughout the Covid-19 (Coronavirus) pandemic, the so-called 'Great Resignation' is underway. According to the Re:Me research, published in November 2021 by life insurance firm Metlife, 54% of employees are considering leaving their jobs in the next 18 months, while staffing platform Indeed Flex research, from October 2021, found 45% of HR directors are already facing hiring challenges.
Although pay is an important consideration in any job move, it is not the only driver. When seeking a new role, for some the choice about time and place of work is now seen as almost as important, according to the Talent Insights report by staffing firm Aquent published in November 2021, which found 83% of employees would turn down a job that didn’t offer flexible working for one that does.
Importance of benefits
Research published by benefits provider Unum in December 2021, meanwhile, found 40% of staff who quit their job say a better employee benefits package would attract them to a new employer. Glenn Thompson, chief distribution officer at Unum, says: “The pandemic has shown that employers underestimate the value of employee benefits, and not delivering on what employees deem important as a result is partly driving today’s Great Resignation.”
This is putting pressure on employers to re-evaluate the entire package they offer employees. Kate Palmer, HR advice and consultancy director at law firm Peninsula, says that while pay and bonuses will always be basic motivators, they are no longer sufficient to attract and retain staff. “Instead, reasonable remuneration packages must work in tandem with additional rewards programmes,” she says. “Organisations which fall short of offering flexible working arrangements, enhanced family-related pay and leave entitlements, pension contributions and social initiatives risk losing key workers.”
Freedom to choose
Dee Coakley, co-founder and chief executive at global employment platform Boundless, says foundational benefits such as health insurance are still very much in demand, as are extended sick, maternity, paternity and parental leave. Beyond these, people want freedom to choose what they would like. “Some might go for wellbeing and free cinema tickets, others might opt to buy more time off or volunteering days; or they may donate their benefits budget to charity or put it into a savings account,” she says. “After the past 18 months, people’s priorities have shifted. If [employers] do one thing when planning for 2022, make it adding a pot of money that employees can use as they wish.”
Abi Freeman, founding partner at business transformation firm Brink, draws a distinction between those who have largely been working from home or furloughed during the pandemic and those who were on the frontline. “For those now finding themselves working from home, it’s about deep connection, health, balance, boundaries, getting outside and away from screens, and having the support to juggle various priorities like childcare,” she says. “For those on the front line, it tends to be much more about acknowledgement, pay, fairness, rest, healthy eating and shift patterns that are manageable.”
Mental health boost
Benefits associated with mental health are certainly very much in demand, as people place a greater emphasis on their own wellbeing. John Backhouse, principal consultant of people science at employee engagement firm WorkBuzz says “hygiene factors” that prevent dissatisfaction are far more important than higher-level benefits as so many people are on the limit of burnout. “Breaks, paid leave, wellbeing support, more holidays, improved efficiencies in doing the day-to-day work, critical headcount resources, the ability to switch off after work, flexibility in location and work arrangements, and hybrid working where possible are all key right now.”
Wider care benefits such as childcare and eldercare are also appealing. “Employees seem to be less interested in on-site childcare options but more [keen on] off-site flexible options as the location of their work and weekly routines have changed,” says Katie Redfern, founder of Meaningful Recruitment and author.
“Some of our clients also found that their employees needed help in juggling the challenges of caring for their elderly relatives or dependents," she adds. "Employee assistance programmes can help in these situations to provide support and practical advice on issues that might be impacting the employees’ wellbeing and performance. Some benefit schemes have online GPs available for staff who can’t get an appointment with their local GP.”
Value over gimmicks
Social value is also becoming increasingly important, as employees seek to make a difference in the wake of the pandemic. Norma Gillespie, chief executive of recruiter Resource Solutions, says more people are seeking a sense of reward or purpose at work. “Millennials and Generation Z have high social awareness and they need to believe in their [organisation's] initiatives and values. Employers should take the time to invest in its culture, with a particular focus on diversity, equity and inclusion.”
This is also filtering through into pensions; Simon Belcher, employee benefits partner at advisory firm Secondsight, reports seeing an increase in requests from younger employees for access to ethical and sustainable fund options.
Meanwhile, Abbie Walsh, managing director at marketing specialist Accenture Interactive, says “gimmicky” benefits are being “seen for what they are”. “Our latest Fjord Trends report, which focuses on how people, organisations and brands are meeting human needs, shows that people have started questioning who they are and what matters to them,” she says. “In many cases this means replacing frivolous perks like free drinks, with initiatives that support a better home life, such as flexible hours or childcare vouchers.”
This is a trend that has also been seen by Unum’s Thompson. “Offerings such as an office fruit bowl, dress-down Fridays and a host of other highly visible but ultimately low-substance perks are unlikely to hold up now staff have a laser focus on employee benefits and remuneration packages,” he warns. “That means employers must take benefits a lot more seriously and put together fully-fledged employee benefits plans.”
Belcher, though, has a slightly different take. “There is always going to be a balance between the benefits offered by employers and the cost verses reward,” he says. “Often these ‘gimmicky’ benefits come at little or no cost to the employer. Equally, when asked by their employer which benefits would be most valuable to an employee, these types of benefits often feature highly.”
One thing that is essential if benefits are to encourage employees to stay - or move - is that employers effectively communicate the value of them. Andreas Hunter, employee benefits consultant lead at consultancy Buck, says employers should communicate clearly that they are putting the time and effort in to help employees achieve their goals. “They cannot just regurgitate policy conditions and benefit designs, but instead should look to tell the true story of the benefits they offer and show how it matches the vision employees have.”
