Employee engagement: Refreshing flex schemes creates closer ties with the workforce

Employee%20Engagement%20coverOrganisations that regularly review and update the flexible benefits they offer will be rewarded by greater staff loyalty and employee engagement, argues Alison Coleman

It is almost a decade since the arrival of flexible benefits in the UK and such schemes are now firmly established as one of the most valuable tools in an employer’s perks kit bag.

Marcus Underhill, head of flexible benefits at benefits technology provider Vebnet, says: “The principles of employee engagement are quite simple. A happy and engaged workforce means you are more likely to have happy, engaged customers, which ultimately means more profits.”

And staff may well be more engaged with the business if they have a choice of benefits rather than a set package. “The challenge for employers is to invest in the market research and staff surveys that will provide them with the answer,” adds Underhill.

Employees appreciate flexible benefit schemes because they allow them to tailor their benefits to their personal needs. However, employers may find it hard to maintain the long-term engaging impact of flexible benefits once a scheme has launched and employees’ choices have been made for the year.

Flexible benefits may be instrumental in attracting, retaining and motivating quality employees, but employers need to measure the effect on these annually and respond to any emerging trends in staff preferences and attitudes if the business benefits are to continue long term.

At the Royal Bank of Scotland (RBS), where the flexible benefits scheme is in its eleventh year, the rewards team has found that employees who elect three or more benefits under the scheme are up to 20% more engaged than other employees. Greig Aitken, head of human capital strategy at RBS, says the company has achieved such results by changing the way it delivers the package. “We employ around 120,000 members of staff and the take-up rates of flex have been good, but about three years ago we started to think about how we could improve our flex scheme and ensure that it was still meeting the needs of the staff.”

The company undertook detailed employee analysis and recognised that it needed to make changes and offer more benefits under the scheme that were relevant to employees of different ages and those with different lengths of service. “This helped to engage staff quite individually with the programme, and by 2005, helped to reduce staff turnover levels by 2%, saving the company £60 million,” adds Aitken.

Value of surveys
Many employers find that surveys can provide much more than a snapshot of staff satisfaction and motivation and can also provide a good way of engaging employees with flexible benefits schemes. “[A staff survey] not only helps to raise further awareness of what is on offer, but also provides an opportunity for staff to have some say in the future of the scheme and the benefits they want to see,” says Vebnet’s Underhill.

But even the most comprehensive and generous flexible benefits scheme may be ineffective unless an organisation makes each employee aware of the scheme through its communications and stresses its value to them as an individual. For a large, dispersed workforce appropriate communication methods might include email and text messages, as well as paper-based or telephone communications. Many of the largest firms run flexible benefits roadshows, delivering the information personally. Others find outlining the value of each employee’s flexible benefits package on their payslip is an effective personal touch.

Some companies may also consider a seasonal angle – for example, promoting staff bicycles in the spring, discounted shopping vouchers during the run up to Christmas, and holidays in January.

The long-term view
One thing employers should try to do is to keep the scheme fresh by regularly adding new benefits where possible, to make sure that there is something in the package to engage employees of all ages and to reflect a wide range of interests.

Michael Whitfield, managing director of Thomsons Online Benefits, says: “When you create a strong culture of engagement in which people are happy and therefore more inclined to stay with the organisation, you need to be aware that, over time, the benefits they value most are likely to change.

“As people get older, and perhaps start to have families, they may choose benefits such as flexi-time and extra holidays over travel insurance and gift vouchers. Think about new joiners and what they are likely to want. Always be looking three or four years ahead and surveying your employees regularly to make sure you are offering them the right choices.”

Although the process of gathering and analysing employee feedback can be costly and time-consuming, it can reinforce the link between employee engagement with the company and employees’ ability to choose the benefits they want.

The process of obtaining this data can help to build support for flexible benefits across different company departments.

“Historically, management hasn’t bought into human resources as much it should. The finance function demands facts and figures and now with the resources and technology available to measure the choices that employees are making, and to produce those figures [to show how staff view flex schemes], HR should have backing and a much stronger voice at a strategic level,” adds Whitfield.

What’s more, if the data-gathering process can be used to convince more managers of the advantages of flexible benefits, they can help spread the message through their departments, potentially engaging even more individuals with the scheme.

CASE STUDY: PricewaterhouseCoopers

PricewaterhouseCoopers (PwC) introduced its flexible benefits scheme, called Choices, nine years ago. Today, with 15,000 employees nationwide, the company has its lowest ever staff turnover rate of 10% a year and take-up of flex is at an all-time high of 95%.

Toni Graves, head of reward and recognition, says: “We can’t say for absolute certain that [flexible benefits] is driving the [low staff turnover], but clearly there is a link.”

Through staff surveys, PwC has deduced that employee engagement is driven by two key factors. These are employees having the ability to do their job well, and knowing the company is concerned about their health and wellbeing.

“We are seeing take-up rates of 40% to 50% of things like holiday and travel insurance, critical-illness cover and income protection – the kind of benefits that allow people to perform their job well and enjoy a stress-free life,” adds Graves.

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