Need to know:
- Both the nature of work and the demographics of the workforce are changing, so a benefits strategy must be fit for future purpose in order to attract and retain talent.
- Generational differences are causing diverse wants and needs to emerge, which must be taken into account. However, some strategies, such as flexible working, can have universal appeal.
- Employers should look to review their strategy and benefits package, using a future-focused lens and a broad benchmark that stretches across industry boundaries.
The nature of work is changing, and with it, the demographics of the workforce itself are undergoing significant transformations. Having a benefits strategy that is fit for future purpose is essential to attracting and retaining the right talent.
Richard Morgan, principal strategic consultant at Aon Employee Benefits, says: “Businesses are changing rapidly. With almost full employment in the UK, an employer must think carefully about the employees it needs and how it’s going to attract them.”
Reshaping work
One of the key trends shaping the world of work is digital evolution. Technology is enabling a greater number of tasks to be automated, especially those that are more process driven and repetitive, but more than this, it is allowing greater flexibility around how, where and when work takes place.
Helga Viegas, director of digital and innovation at Maxis Global Benefits Network, says: “Thanks to mobile technology and fast internet connections, location is no longer so important for work. Many people can now work wherever and whenever they want. It’s blurring the boundaries between work and life.”
Advancements in technology also mean the nature of many businesses has shifted. For example, sectors such as retail and banking that used to centre around customer service on the high street are increasingly about servicing a digital consumer base. Mark Ramsook, senior director, health and benefits at Willis Towers Watson, says: “Digital talent used to be the preserve of technology [firms], but every business needs it now.”
Therefore, employers of all shapes, sizes and industries should consider how to best facilitate and promote flexible, remote and agile working arrangements where possible, not only to help retain staff for whom these structures work better, but also to tap into the digital talent pool of the future.
However, due to the potential for increasingly blurred boundaries between work and life, employers must also remain aware of the possible negative ramifications; being able to work from anywhere might help the modern employee structure work around their lives, but it can also breed presenteeism. Hardline policies might be the answer, such as email blackout hours, but it is also important to focus on culture. This might mean focusing on recognition strategies that do not reward unhealthy behaviours, or making a clear commitment to supporting employee mental wellbeing, and putting benefits in place that help staff take a break from work.
Generation game
Alongside the emergence of new ways of working, employee demographics are also shifting. Older people are staying in the workforce for longer, with 2016 figures from the Office for National Statistics (ONS) showing that around 1.2 million people aged 65 and over are still working. This trend is facilitated by the removal of the default retirement age, as well as factors such as longer life expectancies, improvements in healthcare and shortfalls in retirement savings.
The fact that there are more older people looking to stay in employment may also offset a trend happening at the other end of the age spectrum, Morgan explains: “A drop in the birth rate in the early 2000s means there’s 15-20% fewer people in Generation Z. This will create problems for employers reliant on recruiting school leavers and graduates.”
Generational differences are already emerging, with younger people seeking out a very different, increasingly consumer-grade employee experience. “They’re used to communicating and transacting in a particular way and they don’t see that work should be any different,” Morgan explains.
Some organisations also report a greater demand for work-life balance from younger recruits. “I’ve seen one [employer] struggle with this,” says Ramsook. “Its younger employees want to be promoted but they’re much more wedded to their work-life balance than other segments of the workforce. It’s a bit of a culture shock for the employer.”
Aligned to this is the shift in the relationship between employee and employer, says Niamh Mulholland, director of external affairs and communications at The Chartered Management Institute (CMI). “Younger workers increasingly want to work for organisations with purpose,"she explains. "It supports employee engagement and productivity.”
The benefits strategy of the future, then, should not just be about ad-hoc perks, but be linked to organisational purpose and brand, as well as being used as a method of manifesting core values in a way that affects employees in their everyday lives and aligns them with the business.
For many modern workplaces, this takes the form of corporate social responsibility (CSR), or benefits and reward that fits with a sustainable agenda, from gifting employees with trees to plant, to avoiding paper and single-use plastics in benefits promotion strategies. Small moments can build into a wider sense of culture that is increasingly important to those entering the workforce.
Flexible workforce
Grappling with these generational demands and changing cultural expectations may only be half the battle, as employers must also face another trend shaping the workforce: the growth of the gig economy. “Already, 20% to 30% of the workforce are gig workers, and this will only intensify,” says Viegas. “As more people look to work in this more flexible way, employers and regulators will have to cater for their needs.”
Whether as a gig worker or through a more traditional employment contract, more people are looking to work part-time. This satisfies the desire for work-life balance among younger people, but is also being driven by older employees looking to work to supplement retirement income, and by those in the 'squeezed middle' who are facing both child- and eldercare responsibilities.
“People want flexible working,” adds Mulholland. “Balancing work and life is increasingly a demand of younger generations, but we know it’s valued by older workers too.”
With the gig economy and part-time work becoming an increasingly important factor in the economy and business success, and considering the legislative developments that are showing a move towards bringing in more protection and support for non-traditional workers, employers should aim to stay ahead of the curve. Providing perks and benefits to those not technically working under a traditional contract could be key to engaging this large faction of the current and future workforce.
Deborah Frost, chief executive at Personal Group, says: “These workers can be crucial to the business, so they need to be included in benefits strategy. This could be some form of flexible provision, or something lower value to reflect their temporary status, but it’s sensible to find ways to look after them and win their loyalty.”
Time to review
With fundamental changes taking place throughout the world of work, a strategic and future-focused benefits review is long overdue for many employers. “Most [organisations] have changed significantly in the last 10 years, but very few have overhauled their benefits package,” Ramsook says. “I also see businesses testing what existing employees want, rather than thinking of the needs of a future workforce; there can be a huge disconnect.”
The methodology also needs to evolve. For instance, as the demand for digital skills increasingly enables individuals to switch between sectors throughout their careers, employers must consider benchmarking their offerings against a broader set of peers. “Employers need to think [about] where the talent they want to attract could work,” says Morgan. “It could be about comparing similar roles but, with work-life balance so important, it could also be about comparing similarly paid roles.”
New benefits
Employers will also need to explore new areas for benefits strategy. For example, inclusion agendas will drive greater flexibility within benefits programmes, as employers look to appeal to and engage a more diverse workforce. The emerging trend for health and wellbeing funds is just one example of this, says Morgan. “Giving employees a pot of money to spend on anything they like that supports their wellbeing is a valuable benefit," he explains. "An employer can offer really personalised benefits without having to throw lots of money at it.”
Finally, while technology may be the catalyst for fundamental changes facing the world of work, it also holds the key to winning the battle for talent in the future, explains Frost. “By using platforms and other technology, employers can offer a much wider range of benefits, tailoring them to different parts of the workforce,” she concludes. “With unemployment so low in the UK, offering something valuable to everyone that contributes to the business is essential.”
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