How employers can link benefits strategy to employees’ needs

The Employee Benefits/Capita Pensions Research 2013, published in August, revealed that just one in three employers ask their staff how they would like to be communicated with.However, this could be considered low in the light of separate research by Capita, Employee insight 2013, published in June, which showed employers do value communication. So how do they ensure their employee benefits offering meets staff needs?

If you read nothing else, read this…

  • Most employers do not ask their employees about their benefits needs.
  • Employees often do not understand their own needs.
  • Social media is a powerful tool with which to identify employees’ needs. 

Nick Throp, co-founder of Like Minds, says: “Employers tend to look at indicators like benefits take-up rates, which is fine in terms of showing what employees are doing, but it doesn’t really help to identify what employees’ needs are, or indeed the kind of benefits they might want in the future because [employers] are only responding to what [employees] have currently got.”

Employers tend to undertake qualitative research only on an ad-hoc basis, typically when they decide their benefits needs to be refreshed or in response to a regulatory change.

Pensions auto-enrolment is a case in point, with a number of employers using the pension reforms as an opportunity to review their entire benefits offering in the context of their new obligations. For example, some organisations may be reallocating their benefits budget because of the requirement for them to pay a minimum employer pension contribution rate for all eligible staff.

Meanwhile, others may be reviewing the attractiveness of their overall benefits offering as a recruitment and retention tool now that a workplace pension is, for most employers, no longer a differentiator, but a legal requirement.

But, as Employee Benefits’ research shows, most organisations that have auto-enrolled their workforce are failing to identify their employees’ needs, thereby missing a huge opportunity to engage with their workforce and, ultimately, to grow their business.

A forthcoming white paper based on a survey of more than 2,500 employees and focus groups with various employers, conducted by YouGov for Barclays, has found that employers’ failure to meet the benefits needs of particular groups of staff is particularly acute among generations X and Y. This is despite the fact that these generations are future business leaders and are particularly responsive to workplace benefits. According to the report, this is adversely affecting employee wellbeing and causing engagement issues.

Difficult discussions

But discussions with employees, even the most financially astute ones, about benefits such as pensions are tough. Mark Pemberthy, projects director, employee benefits solutions at JLT Employee Benefits, says: “It is a challenge to have a meaningful discussion with employees about things like pensions and investment issues in general, such as attitudes to risk and appetite for loss, particularly in terms of how that translates into a default strategy.

“There is a general awareness among employers and trustees that the investment element of DC [defined contribution] pensions is critical and that communications are really important within that. However, what that looks like is very different from employer to employer.”

Technology, such as online modelling tools, can help employers go some way to engage their workforce in pensions, says Pemberthy. “We find a significant difference in how employers engage with their employees, and the kind of decisions employees make, when [employees have] more immediate access to more immediate information, rather than when it is supported through some more traditional communications means, or through some of the more generic investment portals.”

For example, JLT’s benefits management system, BenPal, can alert employees, either by email or text message, when the funds into which their pension is invested move by particular amounts or at certain trigger points.

“Getting a prompt to say ‘this is how your money is invested at the moment, this is how it’s doing’, and asking: ‘Is that still appropriate? Why don’t you go through and play with the risk profilers and the outcome modellers to make sure you’re aware of the choices you’ve made in the past and the options available to you?’ helps employees become a bit more engaged in these investment decisions,” says Pemberthy.

But online benefits platforms and modelling tools are not typically designed to identify, for example, the pension funds and default options in which employees would like to invest.

Engagement through social media

Neil Strong, a strategic consultant at communications consultancy, Shilling, believes social media is one of the most effective tools with which to attract and engage employees and, in the process, identify their benefits needs.

“Those [employers] that are successful with their benefits take-up are those that offer choice and look to design a scheme that is as collaborative as possible with their employees,” he says.

This requires open lines of communication enabling employers to listen to what their staff want. “Everyone jumps to surveys and questionnaires, and that’s fine, but they need to be balanced with general day-to-day feedback, and I think social media can really do that,” says Strong. “But a lot of [employers] are scared to embrace social media because they’re worried about negative feedback, so they decide not to put a social media strategy in place because of a very small percentage [of employees who abuse the medium], rather than catering for the 98% of people who use it properly. “

Strong says employers that embed social media channels in their organisation encourage peer-to-peer chat among workers, enabling them to gain an insight into employees’ needs, which they can use to tailor their benefits and communication strategies.

“By using employees’ ideas to actually create [their] benefits strategy, [employers] will be in a better place because they are designing a scheme in a way that’s going to work for that particular audience, and that [employees] actually want to embrace,” he says.

Like Minds’ Throp adds: “Employers are still loath to embrace social media because there are still fears about control and whether it is a suitable medium for broadcasting information. A lot depends on the culture of an organisation and its demographics.”

Employers could also consider Facebook-themed benefits platforms, which enable employees to ‘like’ certain benefits, as well as the functionality of retail websites such as Amazon, which display shoppers’ buying history. Pemberthy says: “So we find that employees who take up travel incentives are more likely to also take up restaurant vouchers, while those who take up bikes-for-work schemes will take up concierge services.”

Meet employees’ needs

After identifying their employees’ needs, employers need to balance these with the funding available for desired benefits. By involving staff in this process, employers can help them to understand the challenges involved in creating and implementing benefits, engaging them in the process.

Nick Bacon, professor of organisational behaviour and human resource management at Cass Business School, believes employers can, through open, honest conversations with their workforce, explain where the money to fund benefits needs to come from, such as their salary, particularly when employees want expensive perks. But he adds: “This [conversation] has to based on trust and driven by good value.”

But there will always be organisations that understand their employees’ needs but choose not to acknowledge them when creating a benefits package for fear of generating an unmanageable, and unaffordable, level of take-up.

Bacon says: “The cost of listening [to employees] and funding are two major hurdles [to meeting employees’ benefits needs]. Most employers fall at the first hurdle.”

In the absence of open conversations, employers should, at the very least, be allowing staff to choose exactly how and when they receive benefits communications.

Doctor Emma Russell, senior lecturer in occupational psychology at Kingston University, says: “It is the single biggest predictor of effectiveness, as opposed to stipulating a one-size-fits-all strategy.”

Russell believes email can be an effective way for employers to reach employees conveniently, and across borders and time zones. “But if the email is poorly constructed or conveys bad email etiquette, it is ineffective at getting a response,” she says.

Communication type is highly dependent on employees’ personality and wellbeing, says Russell. “Some personalities, such as extroverts, like the variety provided by unpredictable communications, such as an email dropping in, as it offers variety to their work, whereas worriers, especially if currently under stress, will ignore such an intrusion.”

Employers that are content to blame their lack of effort in ascertaining their employees’ needs, whether in relation to benefits or communication, on the economic downturn and their stretched resources, even if true, will find employees hard to convince.

RSA ensures employees’ involvement

Case study: RSA ensures employees’ involvement

Global insurance business RSA embarked on a journey to understand the benefits needs of its 7,800 UK employees about three years ago.

Ed Airey, UK reward manager, says the journey reflects the organisation’s progression from providing a benefits package that is just there for staff to find, and if they find it, then they use it, to one that better understands what employees want.

“Also, it is understanding better some of our different [employee] groups and the best way to communicate with them,” he says. “We see those two angles almost being equally as important: both the [benefits] offering itself and the communications around that offering.”

To facilitate its benefits journey, RSA implemented a new platform, in conjunction with Aon Hewitt, and launched an organisation-wide challenge inviting employees to design their own benefit.

The Arctic Challenge, launched two years ago, invited staff to design a green-themed benefit in line with the organisation’s corporate and social responsibility efforts, which include a carbon dioxide (CO2)-offsetting scheme.

The winning team, which won a trip to the North Pole, devised a green car scheme that will provide employees with low CO2-emission cars and insurance from RSA itself. “There is a sense of pride because of it being based heavily around an RSA product,” says Airey. “There’s a heavy green angle, too, and a good-value benefit.”

RSA’s initiative boosted take-up rates across its benefits package, which includes a pension scheme, private medical insurance, dental healthcare, critical illness and a bikes-for-work scheme, from below 25% a few years ago to about 53% at the end of last year.

Airey adds: “Obviously, if take-up rates are low, then employers are not getting the best value they can get from their providers and they are also not maximising the levels of engagement they could have from the business.”

The car scheme, provided by Zenith, will launch in September.

Meanwhile, Airey will continue to focus on specific employee groups for which benefit take-up rates remain low, which last year included home-based staff.

“Each year, we are trying to incrementally grow the number of employees that are aware of and engaged with our benefits,” he says.

Internal research performed by Airey will this year see the organisation analyse benefits take-up according to the site where staff work, their grade and the number of years they have worked for RSA. “So, rather than looking at take-up site by site and grade by grade, we’ve started to look at what certain grades [of employees] at certain sites with certain years’ service are doing,” says Airey.

“We don’t do anything now without data around it, so we won’t make a change to a benefit, in terms of the provider and the actual benefit itself, unless we have some level of MI [management information] around it.

“Traditionally, quite a lot of organisations have an idea that certain benefits sound great to have and just do it, but we’re really trying to engage with the business to understand what employees want from their benefits offering.”

RSA is also using employees’ faces in its benefits communication strategy to help boost engagement with the help of its communications adviser, Shilling.

Catherine Park

Catherine Park: How to involve and engage employees in benefits

There are a number of ways in which employers can increase employee engagement in relation to employee benefits, with internal communication strategies fundamental to the process. 

These should be based on employee research to enable employers to find out what benefits their staff value. Employee surveys can help identify these preferences, but is important for employers not to rely on just one method of communication, such as email surveys, because a proportion of staff will not participate.

Employers can instead consider using focus groups and desktop pop-up surveys, while intranet sites and internal social networking tools are useful ways to promote the research.

Social media sites are useful in enabling employers to sustain the feedback and get snapshots of employees’ current views, establish levels of awareness and understanding of a particular benefit, or enable employees to ask questions and make suggestions.

Employers can enhance employee engagement by reinforcing what their organisation stands for, and what this means for them. For this reason, it is important for employers to show how benefits are linked to overall organisational values. This helps to support a holistic employer-employee relationship, rather than creating a situation in which either party simply focuses on the details of individual benefits.

Finding opportunities to summarise all benefits together and highlight the actual value of benefits is another important way for employers to help employees get the full picture, as are compelling messages and clear, jargon-free language telling employees what they need to know.

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Finally, it is a good idea for employers to shake things up a bit with something a little out of the ordinary in terms of the overall campaign, channel, design or strapline. A garden theme created by Thomsons Online Benefits to promote Danone UK’s online employee benefits portal, accentuating the organisation as a ‘great place to grow’, is a case in point.

Catherine Park is PR and marketing manager at the Institute of Internal Communication