In an employee-led labour market, businesses carefully guard details of their benefits packages to maintain competitive advantage. But without a point of comparison, companies must look internally to discover what will entice and secure talented staff.
Despite growth slowdown and Brexit fears, the UK labour market is more vibrant than ever. While this is good news for those looking for their first job or next move, it puts the pressure on employers who are having to fight harder than ever to secure the best in workplace talent.
Playing the field
A business’s benefits package can be the deciding factor for employees looking to make the leap, or deciding whether or not to stay. However, our Gallagher Benefits Strategy and Benchmarking Survey (BSBS) has shown that employers are somewhat lost when it comes to measuring how they stack up against their competitors’ offerings, with more than half (52%) of respondents saying they find it difficult to adequately benchmark their offering against the market.
Given the labour market is so competitive, employers simply aren’t willing to ‘show their hand’ when it comes to their benefits offering, especially in the public forum.
Employers are somewhat lost when it comes to measuring how they stack up against their competitors’ offerings.
A quick review of a competitor’s website will only reveal the top-line benefits information, but not enough to make it useful for comparison purposes. Keeping this portion of the job offering under wraps makes sense in such a competitive environment.
Confidentiality is the key in this area as businesses might be willing to share in order to benchmark their own offering, but they do not want to be identifiable.
One solution to this puzzle is a bespoke or ‘club’ survey amongst groups of companies from the same sector where there is a strong, existing network of HR and benefits professionals. These are usually done through a third-party provider and rely on enough organisations being willing to participate.
There has recently even been a move away from sector-specific surveys, with some providers now only offering ‘all company’ studies.
Whilst businesses are beginning to understand the importance of benchmarking their benefits against the competition, the confidentiality conundrum doesn’t look set to change in the near future.
In fact, there has recently even been a move away from sector-specific surveys, with some providers now only offering ‘all company’ studies, which do not allow organisations to compare themselves against their wider sector, let alone a specific set of identified competitors.
Employees’ wants and needs
With businesses unable to benchmark themselves against competitors who give little away, the onus is on employers to open up lines of communication with existing (and outgoing) employees, to find out what their workforce truly wants in terms of benefits.
By becoming more introspective, employers will naturally be more considerate to their own Employee Value Proposition (EVP), something which research has shown is becoming increasingly important amongst current and prospective employees.
Employers need to have a reliable method of communication when it comes to benefits, whether that is an intranet system which sees regular usage, an online hub or portal, or using total reward statements (TRS) to show the full value of an employee’s package.
Employers need to have a reliable method of communication when it comes to benefits.
From our own research, 84% of organisations either overlook or do not use total reward statements to communicate the value of their benefits package, despite the advantages of having a concise source of information around this complex topic.
A solid set of basic benefits are a must in this day and age, and it’s up to employers to make sure this is well communicated. More creative examples include an annual benefits fair, or perhaps even themed weeks during the year focusing on different areas: health and wellbeing in the new year; pension and financial planning at the beginning of the tax year to help employees make sound pecuniary decisions.
Expectation versus reality
Failures around miscommunication between employers and employees extend to the perceived value in benefits. Employers often make significant investments in the wellbeing of their employees, yet there is a disconnect in the way that this is communicated, and how it is received.
It is essential that businesses help their employees to understand the investment that has already been made in their benefits package and the often-overlooked value this represents. Instant gratification (a free iPhone, for example) often trumps the less glamorous but much more valuable benefits.
Flexibility in benefits provision is so important.
For example, employers can put in large contributions into pension schemes, but many employees in their early careers might not recognise the benefits in the immediate term and therefore regard the benefit as less valuable.
Some benefits are relatively cheap to provide - a healthcare cash plan, for example – and are hugely valued by employees because they can use it for regular expenditures such as annual dental check-ups, opticians’ appointments and other similar health-focussed benefits.
The more regular the communication of (and interaction with) the benefit, the more valued it is likely to be. This is why the theory of flexibility in benefits provision is so important, as it effectively can provide the following three key things:
- It allows for regular communication of benefits
- It shows the employee the associated cost of benefits provided by the employer
- It offers choices so that employees can build their package based on what is important to them, which will help encourage them to see the true value in a given package
For plenty of the UK’s businesses, all the necessary components are in place, but according to our BSBS survey, just 17% of respondents are looking into changing the delivery method. For both business and employees to reap the rewards, it could simply be a case of joining up the dots through effective communication.
With the war for talent raging more strongly than it has ever before, and a watershed moment on the horizon for the UK, now is a critical time for employers to maximise their current offering through effective communication.