How can benefits be utilised to improve employee engagement?

Need to know:

  • Rather than thinking of benefits as a financial or insurance perk, employers should consider how to relate these to what employees need, want or aspire to on a day-to-day level.
  • Employers should promote support services, such as access to an employee assistance programme (EAP), or additional services or tools that may come with a benefit.
  • Tailored, specific communication is key, and sometimes more traditional methods may be more appropriate.

UK unemployment fell to its lowest level for a decade in November 2016 of 1.6 million people, according to figures from the Office for National Statistics (ONS), illustrating just what a competitive market the country is in right now when it comes to recruitment and retention.

Employers will, therefore, need to use all means available to keep their teams content and engaged. Yet, with wage inflation likely to stay muted at best, throwing cash at the problem is not the answer.

To that end, employers are increasingly looking at their employee benefits mix. How can benefits, such as pensions, healthcare, share schemes, voluntary benefits and so on, be repurposed or ‘sold’ better, so as to make employees feel more valued and engaged with their workplace? And how can employers measure whether what they are doing is making any difference?

Steve Herbert, head of benefits strategy at Jelf Employee Benefits, says: “Whatever benefits [are] given to employees, for whatever reason, [employers] have got to make them relevant, and that is the failing of most benefits packages; they become redundant with employees.”

Make benefits relevant
What this means in practice is that employers need to consider how they can make benefits resonate with employees’ day-to-day needs and aspirations, says Saurav Chopra, chief executive officer at Perkbox. For example, a pension or private medical insurance (PMI) might be good for attracting employees, but, in terms of engagement, employees will only use them when they either get sick or retire, he says.

“If [employers] want them to become a driver of engagement, [they] need to think about how that benefit sits within the ‘habit stream’ of the employee; how it can help them to, for example, stretch their salary, become fitter or healthier,” says Chopra.

Rather than simply offering, say, a pension or employee sharesave scheme, therefore, employers could wrap these into a wider package of financial education around budgeting, debt or saving.

It is the same with health-related benefits. John Dean, managing director at Punter Southall Health and Protection, says: “We’re increasingly seeing [group risk] insurance policies evolving to, not only provide support to staff who are ill or in crisis, but also to focus on employee wellbeing, health and fitness.”

For example, some PMI or group income protection products now include a range of tools and rewards such as fitness trackers and health screening as part of their policy to encourage employees to take a more proactive approach to their health and wellbeing, says Dean.

Add-on services
In addition, many group risk insurance products now offer ‘bolt-on’ support services within the premium, such as early intervention, employee assistance programmes (EAPs), nurse, HR or legal support, or second medical opinions. Yet employers may fail to promote these or even sometimes be aware of their existence, says Paul Avis, marketing director at Canada Life Group Insurance. “If organisations want to maximise their benefit spend they need not just to be talking about the fact they offer, say, critical illness, but the support services that come with it,” he adds. “These can be something [they] can offer in addition to salary, but at no extra cost.”

Communication is key
Ongoing communication is very much key to successfully using benefits to engage employees. Martha How, principal at Aon Employee Benefits, says: “Just, say, having a [flexible benefits] platform is not in itself going to be enough. If [employers] really want to drive engagement, it needs to be backed by a strong communications plan.”

This needs to be specific to the organisation and employee demographic. “A small media [organisation] might find that social media and online chat works for them but for a retailer with people who are busy on the shop floor, that might be distracting,” says How.

And sometimes more traditional methods can be effective, says Avis. “It may well be that sending a personalised hard copy letter through the post may have more effect, ideally it [would arrive] on a Friday so that person has time to sit down and read it.”

Employers should also consider adopting a multi-channel communication approach, says Dean. “[This] could include videos, animations, emails, face-to-face briefings, [and] guides to really bring their employee benefits to life,” he says.

Measurement
Finally, how can employers tell if any of this is making a positive difference? Engagement is a notoriously difficult thing to measure. Regular employee engagement surveys can provide some of the answer, and employers can also look at trends in absence, staff turnover, recruitment and retention.

“Employee referrals can be a good measure of engagement, if someone is recommending to a friend they should come and work in the business,” says Perkbox’s Chopra. “[Employers] can also look at [their] organisational culture. Has the culture improved, do [they] see more collaboration and joint working happening, [and] are people feeding back to the business?”

Sometimes, it can be a gut feeling, says Jelf’s Herbert. “[This includes] what people are saying, how they are acting, [or] the feel of the organisation,” he adds. “Engagement can be the difference between someone leaving at 4.50pm rather than 5.10pm.”

Predictive and people analytics, such as data mining, statistical analysis and modelling tools, can also help to interpret employee trends and behaviours. As Andrew Woolnough, director, employee platform and engagement at Equiniti, explains: “It is about giving [employers] the insight to connect things, to know which levers to pull.”

Case study: PCA Predict engages staff through a tailored approach to benefits

Employee engagement is an important focus for Worcester-based technology firm PCA Predict, and one way it is looking to achieve this is through the use and delivery of employee benefits.

The organisation, which provides address e-commerce validation technology for customers such as Tesco, Dow Jones and Disney, employs more than 55 staff and has offices in New York and Germany, as well as in the UK.

Guy Mucklow, co-founder, says: “We are aiming for 20%-plus growth a year, so trying to keep everyone pulling in the same direction is important.”

This means thinking about benefits in a tailored way rather than taking a one-size-fits-all approach. For example, the organisation has an enterprise management incentive (EMI) scheme that gifts up to 10% of equity to employees. But, as Mucklow says: “Our EMI scheme is an incredibly valuable benefit, but it’s not for everyone.

“For example, millennial employees, in my experience, are not necessarily going to value an EMI [scheme] in the same way. They’re going to have more pressing financial needs: getting a mortgage, paying off student debt or loans and so on.”

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The organisation, therefore, offers a staff bonus scheme alongside the EMI, which gives employees the option of a direct cash bonus, shares or a mix of the two. It also offers a range of other employee benefits, including a defined contribution pension scheme, flexible-working arrangements, subsidised gym membership, a bikes-for-work scheme and a range of Bupa-provided healthcare benefits.

Communication that resonates at an individual level is the key to making these benefits work in terms of driving employee engagement, says Mucklow. “If benefits become predictable, if [employees] just expect them rather than appreciate what is being provided, then their value risks being lost,” he adds. “So, this is an important message to be getting right; it is about making things appropriate to the individual.”