Paul Brown: Fit-for-purpose and well-communicated benefits engage staff

The results of the Employee Benefits/Towers Watson Flexible Benefits Research 2014 provide overwhelming evidence that improved employee engagement is the biggest prize from implementing flexible benefits.

Some 92% of our respondents reported an increased level of employee engagement as an outcome of flex. This is compelling evidence to back up the theory that flexible benefits are considered best practice and a necessary weapon in the continuing battle to retain key talent. 

The research suggests flex is widely used, by just over 50% of employers, so organisations that do not have flex should ask themselves whether they can afford not to provide choice to their ever-demanding workforce. 

With markets starting to improve, and the potential to see staff turnover increasing, employers continue to look for more innovative ways to retain their talent pool. Sustainable engagement comes from building or strengthening the psychological contract by developing an emotional attachment between employee and organisation.

The employers with which we work are achieving this most effectively by personalising their employees’ benefits, which adds to the perceived value. Greater engagement comes from delivering a flex programme in a targeted way through a strong, branded experience linked to company values.  

Successful engagement

Employers with successful engagement focus on two questions. Firstly, is the range of benefits on offer what their employees really want and value? Many benefits strategies are paternalistic and do not recognise the more demanding requests from employees. We still see some organisations providing employee benefits levels that are based on the market average or the minimum level dictated by legislation. These are acceptable benchmarks when negotiating the benefits budget with the finance director, but a broad-based approach to benefits is not enough to create an engaged workforce, and it is not spending the budget as effectively as it could.  

In the UK, employers spend, on average, more than 20% of total payroll on benefits, which is a significant investment and worth targeting on what employees want. To really build engagement, the benefits on offer must match the diverse profiles of all employees.

Potential new recruits are increasingly interested in what employers have to offer. Take the highly competitive online technology market. The typical profile of a young, vibrant employee base is attracted by a employer’s location, its working environment and culture, as well as a wide choice of benefits, including buying and selling holiday, flexible-working arrangements and on-site services, such as gyms and coffee shops.

These benefits are important engagement factors for a younger, creative demographic, and if the broad-based approach was used, these organisations would not succeed in retaining, let alone attracting, the right types of employee. 

Appreciating benefits

The second question is: does an employer’s workforce understand and appreciate the value of their benefits package? To fully appreciate the benefits, each employee first needs to know what is available and why it could be beneficial for them. Ideally, that means providing a direct, targeted, meaningful message based on the employee’s profile or preferences, and that is where an effectively communicated flex plan can help drive value and understanding.  

By adopting a consumer-style approach to proactive communication of benefits within a flex plan, employers can more successfully provoke interest in the plan and promote particular aspects of the package which they believe will be more suitable for that segment of the workforce. New technology, such as mobile apps, social media and text messaging, can help personalise the message by directing tailored messages to individuals and allow for group discussion.

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The winning combination of a diverse, fit-for-purpose range of benefits, when communicated through targeted messaging, maximises the potential for employee engagement and the return on employers’ investment in benefits.

Paul Brown is head of flexible benefit consulting at Towers Watson