How to overcome the disconnect between benefits on offer and what staff really want

The Employee benefits guide 2024, published in September by recruitment firm Robert Walters, suggested four-fifths (80%) of people feel they do not get the most out of their current workplace benefits, and a further 35% are not at all satisfied with their overall benefits plan at their current employer.

This is a trend that was replicated in Zest’s Cost of living report, published in December 2023, which found 45% of employees believed that their benefits package was inadequate. The findings hinted at a general unease around how well benefits packages are meeting the needs of employees, in the wake of both the Covid-19 pandemic and the cost-of-living crisis.

Pandemic repercussions

One of the biggest impacts of the pandemic remains hybrid working, which is now an expectation for many employees. Mark Gallagher, senior associate at Han Law, says: “Some employees are open about having an extra hour’s sleep when working from home as they do not need to be up early to commute.”

This is part of a wider move towards getting a better work-life balance. Michael Page’s Talent trends report, published in August 2024, found over half (56%) of workers highlight this as the biggest factor in creating ongoing job satisfaction, compared to 45% who cited salary. Doug Rode, managing director, UK and Ireland at Michael Page, said: “Leaders should be prepared to remain agile and open-minded in any working pattern negotiations with employees.”

Other areas employers could think about to help with this include updating holiday allowances or implementing a work-from-anywhere policy, he adds.

Wellbeing is another emerging theme, and again there is evidence of a gap between what employers offer and what employees want. Wellhub’s The return on wellbeing study, published in May 2023, found that 36% of employees worldwide do not think their employer demonstrates a commitment to their wellbeing, despite the fact that 93% of employees value their wellbeing as much as their salary. Luke Bullen, vice president and head of UK and Ireland at Wellhub, saiys: “The pandemic highlighted the importance of wellbeing, and employees now expect comprehensive health benefits, including mental health resources, wellness programmes and access to fitness initiatives.”

Employee preferences

The cost-of-living crisis has also had an impact on what employees want. Matt Russell, chief executive officer (CEO) of Zest, says: “Most benefit wish-lists include some form of financial support.  Things like employer contributions to household bills are among some of the top perks employees are after; a fact that’s hardly surprising considering the ongoing pressures of living costs and the incoming energy price cap rise likely to cause another spike in bills this winter.”

Other financial assistance is also highly valued. Doug Butler, CEO of Perkbox Vivup Group, says: “There is greater demand among employees for perks and benefits which provide a meaningful contribution to their day-to-day lives, whether that be support with their supermarket shopping or discounts on life’s little luxuries such as gym memberships or cinema trips. The challenge this has presented for businesses is ensuring that each of their employees has access to the perks and benefits which align with their unique needs.”

Mainstay perks

Yet there are traditional benefits that remain valued by employees. Matthew Gregson, executive director at Howden Employee Benefits, explains: “The top two benefits that employees consistently value are pension plans and access to healthcare, and this hasn’t changed significantly since the pandemic. The remaining demand is for perks such as life cover, gym memberships, [bikes-for-work] schemes and wellbeing but these are secondary to those big benefits.”

Training and upskilling should also form part of the mix, says Chris Eldridge, CEO of Robert Walters UK and Ireland. This is not just for younger staff. “Professionals of all ages and seniorities can benefit significantly from being able to add more strings to their bow through relevant upskilling opportunities, whether that be working on their soft or technical skills or retraining in new areas of their discipline,” he says.

Balancing act

For employers, it is not simply a case of providing whatever employees desire, either. Gethin Nadin, chief innovation officer at Zellis and Benefex, says: “There needs to be a careful balance between offering benefits that are paternal and designed to support the employer, with those designed to motivate the employee. It’s very good practice for an employer to offer benefits that proactively support people’s wellbeing, for example, so that employees can perform at their best and recover quickly from setbacks. Benefits are not just about reward and motivation; they are, in part, to support an effective and resilient workplace.”

Yet for those employers that want to ensure they are offering benefits that employees value, there are steps that can help to close the benefits gap. The starting point is to talk to employees to find out what matters most to them, says Jennifer Liston-Smith, head of thought leadership at Bright Horizons. “Employers can host feedback sessions, alongside refreshers on the existing benefit offering,” she explains. “This demonstrates to the team their employer cares about any challenges they are facing away from work. It’s important to run these sessions regularly as people’s circumstances can change within 12 months.”

Allowing individuals to personalise their benefits can also help ensure they receive something they appreciate. Andy Whiteaker, head of employment at law firm Boyes Turner, says: “Your people want to feel engaged in the process and, to some extent, in control. Rather than free membership to the gym near the office, they might prefer a wellbeing allowance for a personal trainer at home, for example.”

This fits in with a July 2024 study by Perkbox Vivup Group, which found that 66% of managers say their team members want greater access to personalised perks and benefits.

Essential communication

When any benefits package is agreed on, it is essential that employers communicate with employees so they understand what they are getting. “Employers need to do a much better job of communicating the value of having these benefits and the risks of not,” says Nadin. “This means bringing them to life with real-life scenarios. For example, we’ve seen some fascinating stories on TikTok recently of people talking about the challenges they now face following the death of a partner where no life insurance was in place. These heavy but important stories can jolt our employees into affirmative and protective action.”

It is a similar proposition with pensions, which for most employers are the biggest benefit cost after salary. Sam Holmes, head of financial coaching at Bippit, says: “Not many employees want to work until they’re 80, but this may not translate into engagement with pensions [communications], and they may see pensions as an unexciting hygiene factor. Employers need to drive change here, because saving for retirement is now a whole-of-life process and the landscape has completely changed for future generations.”

As well as engaging and communicating with employees, it is important that employers analyse data to assess engagement levels with each benefit, says Howden’s Gregson. “If employers get into a successful cycle of all three, they can design a benefits programme that works for both employees and the business,” he says.