CEO Reports – Innovations in Employee Benefits Solutions – PIB Employee Benefits Ltd

SPECIAL REPORT

Employee Benefits Solutions Captivating a Multi-Generational Workforce Using Employee Benefits Employees: Your Company’s Most Valued Resource How Employee Benefits Are Changing Designing an Employee Benefit Package The New Frontiers of Employee Benefits

Published by Global Business Media

At PIB, we specialise in supporting organisations who want to formulate an effective employee benefits strategy.

Our team of experts can help with all aspects of a benefits strategy including consultancy, implementation and communication as well as on-going maintenance and regular reviews - enabling organisations to be in a stronger position to attract, retain, reward and engage quality talent.

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EMPLOYEE BENEFITS SOLUTIONS

SPECIAL REPORT

Employee Benefits Solutions Captivating a Multi-Generational Workforce Using Employee Benefits

Contents

Employees: Your Company’s Most Valued Resource How Employee Benefits Are Changing Designing an Employee Benefit Package The New Frontiers of Employee Benefits

Foreword 2 Tom Cropper, Editor

Captivating a Multi-Generational Workforce 3 Using Employee Benefits Matthew Shaw – Communications and Engagement Consultant, PIB Employee Benefits Ltd Published by Global Business Media

Published by Global Business Media

Know Your Audience Embrace Technology Review and Communicate

Global Business Media Limited 62 The Street Ashtead Surrey KT21 1AT United Kingdom

Conclusion

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Employees: Your Company’s 8 Most Valued Resource

Publisher Kevin Bell Editor Tom Cropper Business Development Director Marie-Anne Brooks Senior Project Manager Steve Banks

Source Material

Tom Cropper, Editor

The Value of Happiness Happy Employees Are Good Employees Keeping Employees Happy

How Employee Benefits Are Changing

10

Jo Roth, Staff Writer

Advertising Executives Michael McCarthy Abigail Coombes

Boom Time for Benefits

Production Manager Paul Davies

Improving Benefits

For further information visit: www.globalbusinessmedia.org

Designing an Employee Benefit Package

The opinions and views expressed in the editorial content in this publication are those of the authors alone and do not necessarily represent the views of any organisation with which they may be associated.

Material in advertisements and promotional features may be considered to represent the views of the advertisers and promoters. The views and opinions expressed in this publication do not necessarily express the views of the Publishers or the Editor. While every care has been taken in the preparation of this publication, neither the Publishers nor the Editor are responsible for such opinions and views or for any inaccuracies in the articles.

Measuring Performance

12

James Butler, Staff Writer

Establishing Goals Communicating with Staff Making Benefits Available Choosing a Provider

The New Frontiers of Employee Benefits 14 Tom Cropper, Editor

The Changing Workplace The ‘Always On’ Lifestyle The Positive Workplace

© 2017. The entire contents of this publication are protected by copyright. Full details are available from the Publishers. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying, recording or otherwise, without the prior permission of the copyright owner.

A Changing Role for Employers

References 16

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EMPLOYEE BENEFITS SOLUTIONS

Foreword

Y

OU CAN often tell a lot about employers by

improving the engagement between a company

what they say about their staff. If they complain

and its people.

about staff who are lazy, lacking in ambition or

Jo Roth then looks at the evolving market for

ability, it’s often because there’s a problem in how

employee benefits. From the days of the simple

they are managed.

company car and pension plan, they have evolved

Staff performance can draw directly on the way

into flexible packages offering a wide array of different

in which they are treated. Those who enjoy the

options. James Butler then examines how companies

workplace feel valued and engaged are likely to

have approached the issues and the key things

be more productive and successful which is why

that businesses should consider when designing a

businesses are investing so much into employee

package of their own.

benefit systems. However, in a changing work

Finally, we examine the evolving nature of the

environment, designing the best package is no

workplace and how this will shape trends in the future.

mean feat.

Times are changing rapidly. Employers will assume

Our opening article comes from Matthew Shaw –

a more integral role in society and will be delivering

Communications and Engagement Consultant at

a host of services such as health, education and

PIB Employment Benefits. He talks about some of

financial advice.

the key issues confronting managers including an

Many businesses may struggle to see the

aging workforce, increased digital technology and the

monetary value of benefit packages. However, the

changing needs of their employees. All these will feed

more data accrues, the easier it is to see how a

into how businesses manage their benefits packages.

happy and engaged workforce helps improve

We then look at why benefits packages are

bottom line performance.

becoming increasingly important. Businesses have many different approaches to employment – smarter companies are those which understand the value of a happy workforce and spend time and effort into

Tom Cropper Editor

Tom Cropper has produced articles and reports on various aspects of global business over the past 15 years. He has also worked as a copywriter for some of the largest corporations in the world, including ING, KPMG and the World Wildlife Fund.

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EMPLOYEE BENEFITS SOLUTIONS

Captivating a MultiGenerational Workforce Using Employee Benefits Matthew Shaw – Communications and Engagement Consultant, PIB Employee Benefits Ltd Businesses in the UK and the rest of the world are experiencing a unique change in their workplace demographics; increased age diversity and the rise of the millennials (those born between 1980 and 1995). We explore how to approach the design of an employee benefits package which will be valued now and in the future.

R

ESEARCH BY the global consultancy practice PWCa has highlighted that by 2020, millennials will make up 50% of the global workforce.

This generation is known for being technologically adept, social media dominated and digitally native. So, as they become the predominant cohort in the workplace, it is increasingly important for businesses to understand how to engage effectively with them whilst not alienating the older generations.

According to research conducted by the University of Phoenixb, there are now six different definitions of generations that are still living and today up to five of these could find themselves together in the workplace at any one time.

So here is the challenge – how do employers and employee benefits consultants create and communicate the most appropriate suite of benefits which serve their true purpose – to attract, retain, reward and engage the best quality employees in the market?

Know Your Audience The first step in creating a valued benefits package is gaining an understanding of what people need or want. The most effective yet often underutilised way of doing this is to ask employees “In an ideal world, what benefits would you like to be offered and why?”

Every business will have its own way of canvassing ideas and suggestions. But whatever

TRADITIONALISTS

Born between 1922 and 1945

the channel or forum used, the supporting communications and messages around this must avoid fuelling unrealistic expectations that any wish list can be delivered in full.

There are a multitude of different benefits which can be considered, and these can be a mixture of financial and non-financial. Some may be relatively low cost and simple to implement, while others may not. The benefits and technology market moves so quickly that there may be benefits and communication tools available that would surprise even the most seasoned purchaser. Examples include the use of wearable technology to encourage and improve wellness and the ability to talk to a doctor online rather than waiting for a GP appointment. Both have the potential effect of reducing sickness and absence rates.

For the benefit of this piece, the focus is on the traditional benefits, their generational appeal as well as their ability to attract, retain and reward – starting with company pension schemes.

A company pension scheme has historically been the ‘go-to’ employee benefit. The majority of people in paid employment work to pay bills and to fund a certain lifestyle that they choose to lead. The concept of a savings vehicle that allows employees to stop working but still receive a regular income to continue funding that lifestyle will clearly sound appealing. Company pension schemes are typically one of the most costly employee benefits and historically businesses

GEN X

GEN Z

Born between 1960 and 1980

Born between 1995 and 2010

BABY BOOMERS

GEN Y

Born between 1945 and 1960

Born between 1980 and 1995

It is reasonable to assume that the older an employee, there is a strong likelihood that a good quality pension scheme and a generous contribution structure will be highly valued

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EMPLOYEE BENEFITS SOLUTIONS

Whatever the channel or forum used, the supporting communications and messages around this must avoid fuelling unrealistic expectations that any wish list can be delivered in full

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have used the provision of a pension scheme to differentiate themselves from their competition.

However, since the introduction of pension auto-enrolment, where all businesses in the UK must offer a pension scheme to their employees, some businesses which previously used a pension scheme as a differentiator now face a new challenge. For a typical employee an obvious comparator is the generosity of the contribution structure compared to other employers. It is important to consider also how a pension scheme is valued by employees when compared to other benefits within the context of the changing workplace demographic.

It is reasonable to assume that the older an employee, there is a strong likelihood that a good quality pension scheme and a generous contribution structure will be highly valued.

Research conducted by Deloittec suggests that saving for retirement is generally considered a low priority by millennials behind saving for a house, travelling, further education or buying a car.

Currently half of the top 10 largest companies in the world by market capitalisation are tech companies – Apple, Google, Microsoft, Amazon and Facebookd. Each of these companies want to attract the best quality staff and part of their strategy for achieving this includes offering a wide range of innovative non-traditional benefits such as free food, gym membership and access to the latest technological hardware. So, it is no surprise that Google have topped the Fortune ‘Best companies to work for in the world’ list for the past six yearse?

In the case of Google, the provision of these benefits has been used as a tool to embed the desired culture within the workforce. Two examples include:

1) Extending maternity leave in the US to combat higher than average turnover rates amongst women. The increase from 12 weeks to 5 months reduced attrition amongst new mothers by 50%.

2) Extending a warm greeting for new joiners.

Their internal data found that when managers used this approach, it increased the productivity of the new joiner by 15% over the next 9 months.

Smaller businesses can achieve similar results by adapting this approach to suit their size and budget – the key is understanding what the problem is and then consider ways in which it can be addressed.

Following the introduction of auto enrolment in the UK, the common benefit that every company will offer is a pension scheme. Thereafter, business leaders and decision makers are free to pick and choose the benefits they believe will be most effective in achieving their ultimate goal of attracting, retaining, rewarding and engaging talent for their business.

Whatever the package created, the obvious questions that should be asked include how the benefits on offer are aligned to the preferences of the workforce (after asking people what they want and why), how those decisions have been reached and what plan is in place for measuring their effectiveness?

Hermes, the logistics organisation, recently undertook an employee feedback programme to understand what was important to their workforce to tailor their benefits offeringf. Their plan is to continue collecting feedback in the future to ensure that the benefits remain relevant and valued. This is an action that every business should undertake to adapt their benefits offering to the changing workplace demographics.

EMPLOYEE BENEFITS SOLUTIONS

Embrace Technology Two interesting facts highlight the advance of technology in the workplace as well as the disparity in technological experiences across generations: Fact 1 Mobile phones first went on sale in the USA in 1983 – they cost over $4,000 (£2,520).

Generations Y and Z, however, have never known a world without computers and mobile phones.g Fact 2 While e-mail was widely credited as being invented in 1972, the first commercial e-mail did not appear until the early 1990s.h So, let that sink in – if you are aged over 50 and reading this, you probably entered the workplace without the concept of a mobile phone, the internet or e-mail. Conversely, the average one year old child probably knows instinctively how to minimise and maximise the screen of an iPad using their fingers.

In early September 2017, a panel of technology experts spoke at the Fintech Conference of the Personal Investment Management and Financial Advice Association (PIMFA)i. Douglas Orr, Chief Executive of the messaging platform, Novastone, explained how the use of email is already becoming redundant in Asia in favour of services likes WhatsApp and WeChat.

Singaporean authorities have even agreed that financial advisers can use these facilities to record conversations with clients, effectively meaning that they are the new way of creating meeting notes. While the UK’s Financial Conduct Authority is not quite at that stage yet, it does highlight the changing attitudes of regulators in

what is traditionally one of the most heavily and closely regulated industries in the world.

Having focused on millennials, employers have the additional challenge of Generation Z now entering the workplace; Businesses need to adapt their benefits and communications strategy further as they compete to recruit and retain the best talent and maximise return on their employee benefits spend.

For a communications strategy to work effectively, it tends to have to be multi-faceted by using a range of channels to engage all generations and must, therefore, be tailored to the business. For example, a business located on a single site would traditionally hold face- to- face presentations as the most effective method for conveying a message. However, this approach may be neither time or cost effective for a business with multiple locations.

When consulting with corporate clients, it is always useful to establish what channels are currently used to communicate key messages to their workforce and, invariably, the most common response from larger organisations is by e-mail.

The challenge begins when trying to ascertain the effectiveness of this channel.

E-mail as a concept for mass distribution and broadcasting information is fine but only if you can demonstrate that it works. For example, how many businesses can analyse how many people open the e-mail, how many then read it and crucially, how many understand it and are motivated to respond to a call to action?

When signing up to a new product or service, most people will be familiar with the concept of ticking a box to indicate their preferences on how they wish to be communicated with. To date, when joining a new employer, how many new starters are asked that question? Modern

Having focused on millennials, employers have the additional challenge of Generation Z now entering the workplace

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EMPLOYEE BENEFITS SOLUTIONS

Hermes, the logistics organisation, recently undertook an employee feedback programme to understand what was important to their workforce to tailor their benefits offering

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technology allows people to communicate in more ways than ever before; over 1 billion people use the messaging service WhatsApp everydayj – that’s nearly 1 in 7 people in the world, but how many businesses use this as a means of communicating with their staff?

Technology is not just influencing how we communicate, it is also changing the landscape of employee reward – for example, businesses such as RSK and Bond Dickinson have been known to hold an annual event designed to encourage competition and improve employee wellbeing by helping colleagues get fitter. The concept is simple; the business is divided into small employee groups and pedometers are used to track their daily steps. The steps are added up throughout the year and tracked on a world map for all to see. At the end of the year, the team with the most steps wins a prize.

It is a well documented cliché that a happy and healthy employee is likely to be more productive and there are endless statistics to back this up. These statistics range from increased productivity, higher engagement, lower sickness and absence rates and even fewer workplace compensation claims. One of the most commonly cited is by Professor Andrew Oswald of the University of Warwick where his studies found that happiness made people around 12% more productive.k Employers should consider how they can harness the power of technology to improve and increase the efficiency of their communication channels to help promote their benefits and thereby improve employee productivity.

Review and Communicate In July 2017, employee benefits provider Unum released their workplace communication blueprintl – a survey of over 1,000 employees which focused on employee engagement and reward. There were two key findings: • 50% of respondents said their benefits package is not always tailored to their needs • 32% said that their employer does not understand what benefits are important to their employees The feedback is clear – employees are not suggesting that their employer offers no benefits, they are saying that the benefits are either not right for them or that they do not understand how they work.

This calls into question two things – what is the effectiveness of the communication strategy used by those employers to promote the benefits available? And what is the suitability of the benefits for employees that have been chosen by the decision makers of those businesses?

The Institute of Directors recently reviewed their benefits strategy and reversed the way that they use their total reward statements.

Rather than explaining which benefits employees currently had and how much they were worth, they also gave employees an outline of the benefits they had chosen not to take up. They found that the typically perceived smaller benefits such as eye care schemes and flexible working options were not fully taken advantage of by their workforce but became in high demand once

EMPLOYEE BENEFITS SOLUTIONS

employees were aware of the options. In other words, there was a gap between the provision of benefits and their communication to employees.

Conclusion The evolution of workplace demographics means that the requirement for a flexible and varied benefits, communication and engagement package is essential.

Benefit requirements are also evolving; for example, with subjects like financial education currently not covered on the school curriculum, millennials will often be first exposed to the concepts of saving for retirement, budgeting and life and health insurances when they enter the workplace. Given that employers are now the nation’s pension providers following the implementation of auto enrolment, it may fall on employers to offer education and guidance to these individuals, whilst financial services providers create new methods of supplying advice to the mass market.

To achieve success means businesses will have to adopt a continual cycle of consulting employees and reviewing all aspects of their benefits offering in the context of the feedback received. Failure to do so could lead to the business being less competitive or less productive as a symptom of failing to recruit, retain and reward the required level of talent. On the plus side, organisations like Google demonstrate how the provision and communication of the optimum benefits offering can help reinforce the desired culture within the employee cohort. No matter how big or small a business, leaders can take inspiration from the likes of Google and create a package and approach that fits their own business model through three simple steps; know your audience, embrace technology, review and communicate.

If you’re thinking of improving your current employee benefits package or introducing a new one within your business, contact an expert at PIB Employee Benefits.

Source Material a

PWC: Millennials at work - Reshaping the workplace: https://www.pwc.com/m1/en/services/consulting/documents/millennials-at-work.pdf b

The Six Living Generations in America: file: http://www.marketingteacher.com/the-six-living-generations-in-america/

c

Deloitte: The Generation Game – Savings for the new millennial: http://bit.ly/2zY3kSB

d

List of Public Corporations by Market Capitalisation: https://www.cnbc.com/2017/03/08/the-top-10-us-companies-by-market-capitalization.html#slide=1 e

Fortune – The 100 Best Companies to Work For: http://fortune.com/best-companies/google/

To achieve success means businesses will have to adopt a continual cycle of consulting employees and reviewing all aspects

f

of their benefits offering

g

in the context of the

Employee Benefits - Hermes to design new benefits strategy based on employee feedback: https://www.employeebenefits.co.uk/issues/august-2017/hermes-designs-employee-feedback-plan-inform-new-benefits-strategy/ The History of Mobile Phones From 1973 to 2008: http://www.knowyourmobile.com/nokia/nokia-3310/19848/history-mobile-phones-1973-2008-handsets-made-it-all-happen h

History of E-mail: http://www.inventorofemail.com/history_of_email.asp

feedback received

i

Financial Times Adviser – FCA told to rewrite rules to recognise WhatsApp: https://www.ftadviser.com/regulation/2017/09/06/fca-told-to-rewrite-rules-to-recognise-whatsapp/ j

WhatsApp announces over 1 billion daily active users: https://9to5mac.com/2017/07/26/whatsapp-one-billion-active-daily-users/

k l

Happiness and Productivity: http://ftp.iza.org/dp4645.pdf

UNUM – Workplace Communication Blueprint: http://landing.unum.co.uk/communication-blueprint

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Employees: Your Company’s Most Valued Resource Tom Cropper, Editor Businesses which treat their employees well attract the best talent and have an advantage in the marketplace.

A

Those who were happier in their work and appreciated by employers were likely to be content with a lower compensation

COMPANY’S most valued resource is its employees – it’s one of the most overused clichés in business and, like many clichés, it is often honoured in its breach. Time and time again companies fail to value or adequately reward their staff and the results are there to see.

In the press, we’ve seen plenty of high profile examples of companies which have failed to treat their staff with the consideration they deserve. Whether it’s Uber or Sports Direct, mistreating employees or academy schools placing pressure on head teachers1, it’s a serious problem in the workplace.

The Value of Happiness A report for the recruitment site Monster found that more than half of staff say they feel undervalued in the workplace2. That’s a figure which should concern employers, because unhappy staff have serious implications for businesses.

Let’s look a look at those three high profile examples once again. What they all have in common is that the businesses and organisations responsible all suffered for their poor treatment of staff. Uber had its license to work in London removed3, Sports Direct was shamed in the press4, and schools face a recruitment crisis for teachers5 at all levels, partly because of the stress and lack of security they offer.

Businesses don’t always factor in staff wellbeing into their business models, which is unfortunate because a growing number of studies point to clear financial benefits for doing so. A study from MIT Professor Dan Ariely identified clear links between the financial compensation staff expected and how valued they feel by the company. Those who were happier in their work and appreciated by employers were likely to be content with a lower compensation6.

Monster’s report also highlighted the monetary benefit of staff who feel valued. It suggested that the simple act of saying ‘thank you’ could be worth more than £1,600 a year to a business. In

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other words, unhappy staff are more expensive for a business and are also likely to be less effective.

A study from the University of Warwick found that staff who are happy are up to 12% more productive than average, while those who are actively unhappy can be 10% less productive than average. The study brought together various groups of people and were asked to assess their happiness level. The groups were then given a series of tasks and their productivity was measured.

Happy Employees Are Good Employees The lesson for businesses is clear: those who feel their employees are lazy or ineffective should look first at the way in which they are treated. As individuals, we do not necessarily use all our potential at work. If we feel valued and involved, we are likely to work harder and proactively think of ways to improve the value we offer the organisation.

The unhappier we feel, the more likely we are to trend towards clock watching. Staff who are disconnected with the organisation in which they work will do the bare minimum. Productivity will slip and mistakes will creep in.

Employers who do not invest in their staff will be making a false economy. Not only will they be missing out on productivity gains, but they will actively be paying a fee for those unhappy staff, and, in the world of social media, word can get around. Companies can quickly develop a poor reputation, which will hinder their ability to attract top talent.

Earlier in 2017, a report from the recruitment company, Glassdoor, which allows employees to rate a company, listed the ten worst companies to work for in the UK. Top of the list was the betting company William Hill followed by the Financial Ombudsman and Holland & Barrett7. At the other end of the scale, the best companies to work for, such as Google and Dell are some of the most popular destinations for top talent.

EMPLOYEE BENEFITS SOLUTIONS

The value of attracting top talent is even more important given the competitive nature of the business environment, the uncertainty of the economy and the rise of technology. Those companies with the best people will be able to develop and harness innovations which place them at a key competitive advantage.

Those which are adept at unlocking the human potential within their organisations will see it feed through into their bottom line. The stock prices at companies listed in the Fortune 100 Best Companies to Work For rose on average 14% compared with 6% among all businesses8.

Keeping Employees Happy The question is: how can companies keep employees happy? It starts with a culture change.

Businesses can trend towards short-term decision making. They may often only see the clear value in the costs and revenues of their business. To improve their decision making it is worth them widening metrics to take account of how happy their employees are and seeing how that feeds into business operations.

The good news from an employer’s point of view is that this doesn’t necessarily involve the added expense of higher wages. As we explored earlier in this article, happier staff are more likely to be content with lower compensation. While a wage rise will always help, employees are understanding about the economic realities facing their companies and will be more sympathetic if they feel engaged and valued in their roles.

Staff happiness, then, is a key metric that businesses of all kinds should be assessing.

They should view their staff less as an operating cost and more as an investment – one which can deliver huge rewards if treated in the right way. Improving staff morale starts with the simple things such as saying ‘thank you’ and offering a reasonable wage, but, as shown by several reports, a good employee benefits package also goes a long way to improving engagement within an organisation. The question for employers is – what package of rewards should they offer their employees?

The lesson for businesses is clear: those who feel their employees are lazy or ineffective should look first at the way in which they are treated

Those companies with the best people will be able to develop and harness innovations which place them at a key competitive advantage

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How Employee Benefits Are Changing Jo Roth, Staff Writer The age of the consumer: employees are increasingly being offered a host of choices when it comes to their benefits.

O

A review into the impact of an aging workforce in 2015 found that 30% of the working population was over the age of 50

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NCE UPON a time, companies’ benefits packages were relatively straightforward.

You’d have a pensions scheme, a bonus, maybe some health insurance and, if you were very lucky, a company car. Today, though, the situation is very different. The market for the providers of benefits is growing and so too is the choice on offer to staff.

Boom Time for Benefits For an idea of what businesses are up against, look at the employee benefits on offer from some of the world’s most generous companies. Netflix, for example, offers employees a year of paid maternity leave, Airbnb offers £2,000 worth of travel, Spotify offers six months of paid maternity leave plus one month’s flexible working for parents returning to work. REI encourages people to go outside by offering employees paid ‘YAY days’ in which they can indulge in the outdoor activity of their choice.

The biggest and best companies understand the value of turning themselves into attractive employers and are prepared to spend to become so. The market for firms which specialise in delivering employee benefits is growing rapidly and as they do so, the types of benefits on offer is beginning to change.

Fortune recently reported that pet insurance had become the hottest employee benefit in the US as firms race to attract more millennials9.

Demographics within the workplace are changing and benefits must evolve to keep track.

The biggest development is the aging of the workforce. A review into the impact of an aging workforce in 2015 found that 30% of the working population was over the age of 50. As this generation approaches retirement age, it warned, it is unlikely that younger people will be able to replace them10. Competition for people with the required skills and experience will become increasingly intense.

As people become more active later into life, they are also showing a willingness to stay in work for longer. A study by the Office of National Statistics found that record numbers of people

over the age of 65 are staying in work11. Research from the Institute of Economic Affairs found that retiring early can be linked to a number of health problems. This, combined with a desire to maintain a high quality of life, is encouraging more people to stay on in the workforce after retirement age.

There is, of course, a very real benefit for businesses in keeping hold of older and more experienced employees for longer. They retain decades of experience and can pass that down to younger generations. However, when designing a benefits package that is attractive for everyone, this can complicate matters.

At any one time there could be up to five different generations working at a company from those just starting out to people working into their seventies. They have dramatically different lifestyles, incomes, savings and expectations.

What they want from employee benefits may be very different.

Creating a tailored package of benefits can be difficult, which is why businesses are turning to specialist consultants and providers to help them customise their offerings to their employees’ needs.

Measuring Performance Benefits, then, are assuming an increasingly vital role in the workplace, but, as they do, businesses are understandably keen to ensure their programmes are delivering results.

Employee benefits should be treated like any other investment in a business – they should be able to show a return on investment. However, despite growing recognition among companies of the importance of reward practices, relatively few have developed effective mechanisms for the quantifiable assessment of their value.

A study for the Institute of Employment concluded that the most common metrics being used to measure performance included turnover rate, vacancy rate, appraisal and performance management and staff satisfaction12. Profit was also used as an indicator, but finding a clear link between profit growth

EMPLOYEE BENEFITS SOLUTIONS

and the establishment of an employee rewards programme can be complicated.

A study by Genesis Associates found that employee rewards programmes boosted profits by an average of £80,000 per week among its members13. It’s also important to measure metrics such as uptake of benefits, which options are most popular and the general awareness of what’s available among staff.

Some consultants and systems can provide automated metrics, while HR software can also be used to measure success. However, according to the Benefits Survey 2014, almost 30% of respondents don’t use any software to measure performance14.

As digital technology improves, it is creating more data on which performance can be measured. Account management and HR software is becoming more sophisticated and widening the scope of factors which can be measured or tracked.

Social media can also serve as a useful tool.

Companies should be monitoring their mentions on platforms such as Twitter to see how their brands are being perceived. Apps such as Social Mentions offer a quick and easy way to get an idea of attitudes to your company. This could

track any factor, including the reward scheme you choose. The fantasy result for any company would be to see one of their employees eagerly Tweeting about the wonderful deal they’ve secured through your company’s benefits package.

Improving Benefits For all the studies pointing to the value of rewards and benefits, there is no guarantee a scheme will work. If the metrics are negative, it pays to find out why. The easiest way is to ask employees.

Ask questions informally, send them questionnaires or establish the process as part of performance reviews.

The landscape is changing quickly.

Demographics are shifting and the range of technologies on offer increases dramatically the level of choice available to each employee.

A more demanding market in which top talent is increasingly sought after, together with a growing awareness of employers about the financial value of happy engaged staff means businesses of all kinds are taking a closer look at employee benefits. This, in turn, is creating a new market of specialist companies designed to provide benefit solutions to help deliver options directly to staff.

Social media can also serve as a useful tool.

Companies should be monitoring their mentions on platforms such as Twitter to see how their brands are being perceived

As digital technology improves, it is creating more data on which performance can be measured

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Designing an Employee Benefit Package James Butler, Staff Writer The right employee benefit package can improve engagement, increase wellbeing and provide an enormous boost to productivity.

W

Building an employee benefits strategy represents a significant investment. Like any investment, managers must set clear objectives for what they want to achieve

E LIVE today in the age of the consumer.

Wherever we are, whatever we’re doing, we’re being sold to and treated as customers and this includes the world of work. As workforces become more diverse and competition for the best people intensifies, companies are becoming more proactive in the way they offer benefits to their staff. The watchwords are choice and flexibility - but creating the ideal package is still no easy task.

Establishing Goals Building an employee benefits strategy represents a significant investment. Like any investment, managers must set clear objectives for what they want to achieve. Many businesses take a passive approach – they feel that they have to offer an employee benefits package to stay attractive and keep pace with the competition, but that should not be the only reason.

Employee benefits can be tailored in a way which improve performance. For example, a business might offer private health insurance, or a mobile medi-tech app, which provides them with quick access to medical advice. Doing so can improve health, reduce the amount of time they take off work and raise productivity levels.

Other services such as travel vouchers or help with student loans can reduce the external stress employees feel, and so keep their mind on the job in hand. But what many benefits packages are missing is a strategic view which encourages the behaviours and culture that managers would like to see in their staff. For example, some companies offer days in which employees can volunteer or take part in another form of community engagement. This helps encourage a proactive, positive attitude among the workforce, and can also help to solidify a company’s reputation as a positive community leader within the local area.

Communicating with Staff An increasingly diverse workforce – in terms of ethnicity, background and age – means that designing a benefits package which will genuinely connect with staff is more complicated than ever.

A business might have multiple generations 12 | WWW.CEOREPORTS.COM

working within an organisation from students on work experience, to school leavers, millennials, working parents and baby boomers, each of whom have different needs.

A survey from YouGov found that four in ten millennials have no pension provision. While many lack knowledge about pension options, others are sceptical about the entire concept of pensions.

Around six in ten of those surveyed worry they will not have enough money to live on when they retire. However, 35% said they didn’t believe the state pension would exist when their time came to retire15. They are likely to have other concerns such as paying off student loans or saving for a house.

Older generations are more likely to value a company pension scheme but, even this is changing. The arrival of auto enrolment pensions has had two impacts. It means the company pension – for so long a staple of the company benefits package – no longer has the pull it once did. Auto enrolment has also been blamed for depressing wages by some analysts as businesses channel funds which might once have been used for supporting wages to pensions. For many workers focused on shortterm money issues, auto enrolment feels like a pay cut, which makes a good benefit package all the more important, in order to engage and retain staff.

Instead, older workers are moving towards more lifestyle-orientated options such as travel insurance. Although we’re living longer, and enjoy more active lives than ever before, the insurance market is struggling to keep up. The price of travel insurance for the over 50s remains disproportionately high.

Workers in their thirties and forties may want a range of different benefits depending on their own personal situation. The instinctive reaction among managers is to provide help with childcare or flexibility for new parents, but this will not necessarily apply to everyone. More and more people are choosing not to start families.

This points to another key issue. Although the workforce is becoming more diverse, people do not always fit snuggly into the same categories.

EMPLOYEE BENEFITS SOLUTIONS

It’s not only impossible to design a one-size fits all option for your entire workforce, but it’s extremely difficult to design one for each sector. Instead, companies must find a way of designing a range of options from which staff can make their own choices.

Making Benefits Available A common problem for organisations is ensuring benefits are accessible to staff and that they are clearly aware of what is on offer. The more an organisation grows, the more difficult this becomes – a problem private healthcare company CareUK experienced. With more than 22,000 employees based around the country, it faced a challenge in making all staff aware of the benefits packages available. Since the company employs thousands of care staff, many of whom do not have regular access to a work PC, they needed a more flexible solution.

The option they chose was an online benefits portal, Care UK Reward. Previously, benefits were accessed through their intranet system, but the new system enabled users to quickly log on via laptops, smartphones or tablets, wherever they are located.

“An engaged workforce is crucial to the success of Care UK and we are constantly evaluating the channels we use to communicate with employees,” says Karen McCormick Group HR Director of Care UK. “This can be challenging due to the fact that many employees are not online while at work. But we have a responsibility to ensure that the people delivering care, and our many remote workers, have convenient access to the same resources as their colleagues who are usually office-based16.”

Choosing a Provider Benefits are becoming an increasingly specialist service – one which businesses are farming out to other providers. As the market grows, the choice of provider becomes an important decision in itself. Businesses will value those companies which can offer choice and flexibility, but experience is key. Consultants who understand what people are looking for and how to design a package which encourages greater buy-in to your company’s ethos and values can have enormous benefits for bottom-line performance.

Equally, a recognition of just how variable this task can be adds value. Providers who can work with their clients, understand their objectives and build a clear view of their workforce will be at a natural advantage.

Before starting, it is important to draw up a clear set of objectives and establishing metrics by which they will be judged. Studies may suggest a correlation between benefits and employee performance but that does not necessarily apply to all businesses and all situations.

You will need to decide what you want out of this process, and establish a clear set of performance indicators which will show you whether or not you have achieved them. These can include staff feedback, retention rates and much more.

The value of employee benefits has been shown by multiple studies, but each company is different and faces its own set of particular challenges.

What works for one organisation may not work for another. Designing an effective package depends on getting to know your workforce, understanding what makes them tick and delivering the services they want.

An increasingly diverse workforce – in terms of ethnicity, background and age – means that designing a benefits package which will genuinely connect with staff is more complicated than ever

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The New Frontiers of Employee Benefits Tom Cropper, Editor Advanced technology is changing the way we work, and companies may find themselves assuming a more important role in the lives of their employees.

Multiple generations are working in the same company. The average age of retirement will rise which leads to a multigenerational workplace of the future

T

HE WORLD of work is changing and so too is the world of employee benefits. The rise of digital technology creates a connected workforce – one which is more mobile and flexible, but one which also faces a range of stresses and strains. Smart employers will be the ones who recognise these changes and adopt a range of benefits designed to deliver maximum value for their employees. Identifying these trends and adopting a suitable approach, though, is more easily said than done.

The Changing Workplace A report from Unum identified the following key trends in the workplace17.

•T he ageless workplace: Multiple generations are working in the same company. The average age of retirement will rise which leads to a multigenerational workplace of the future.

•T he mindful workplace: Both employers and their staff are more aware of the importance of mindfulness. Having time for relaxation and meditation can be crucial in reducing stress, and improving the wellbeing of workers.

•T he intuitive workplace: Digital technology means we are becoming very tech savvy.

Employees have extensive digital profiles and will be more open to using these in the workplace.

•T he collaborative workplace: Digital technology aids collaboration among employees. With multiple generations working together – often with different ways of approaching the same task – companies will have to develop smooth 14 | WWW.CEOREPORTS.COM

operational methods for them to work together.

Unum’s Future Workplace Report believes collaboration could help businesses unlock £90bn in savings.

All these trends have direct financial implications for businesses. Unum’s report suggests that helping people who wish to work longer to stay in a company could realise £44bn through reduced staff turnover costs.

The ‘Always On’ Lifestyle In a digital world, we are always connected and always on. It’s a way of life which is having a growing impact on our quality of life and mental wellbeing. Employees often find themselves never disconnecting from work – they are always online and always available. A study for the Wall Street Journal found that 44% of people check work emails at home18. Given the stress of workloads, it can be tempting to spend time in the evening checking emails or catching up on a little work.

Employers can also blur the boundaries between work and home life by contacting employees outside of working hours.

This hyper-connected lifestyle has an impact on mental health and well-being and companies are beginning to take note. A survey for Management Today found that 25% of businesses had encouraged employees to switch off and disconnect. Both employees and employers are beginning to understand the importance of mindfulness and how improving the mental wellbeing of staff contributes to their performance in the workplace.

EMPLOYEE BENEFITS SOLUTIONS

The Positive Workplace

A Changing Role for Employers

The way in which we work has transformed out of all recognition over the past few decades.

The age of a job for life is coming to an end, replaced by a mobile workforce regularly moving from place to place. Education is evolving and younger generations face radically different financial challenges than their parents.

The need to be seen as being an employer of choice is growing, especially as the tools at employees’ disposal to publicise their experiences with a company – both good and bad – increase. The recruitment website Glassdoor offers candidates the chance to rate their experiences with certain employers.

Before you agree to take a job, you can now look at an employer’s rating and have a much clearer idea about the kind of employer they would be.

Even without such services, people have access to social media and have a wider digital profile than ever before. If an employee is dissatisfied he or she can make their feelings known on social media, which can impact the reputation of a business, but problems can go further than that. With businesses placing more of their operations online, employees often have access to key information. Disgruntled employees – both present and former – represent a significant security risk to businesses. A US study found that 70% of workers felt emotionally disconnected at work and one in five would be willing to sabotage the work of their company or their co-workers19.

Businesses are developing measures to deal with disgruntled employees and manage the fallout of such problems, but a more effective and affordable approach would be to keep them happy in the first place. The value of being seen to be a positive workplace of choice for employees is growing.

As culture and demographics change, employers may find themselves assuming a more important role in the lives of their employees. The advent of auto enrolment has turned them into the default provider of pensions to employees, but they may find themselves assuming an even more detailed role. A study from MoneySavingExpert found that a lack of financial education is costing the UK £3.4bn every year20. Despite a petition from the founder of MoneySavingExpert, Martin Lewis, financial education is not included on school curriculums. With many people under the age of 40 having little awareness about key financial services, such as pensions, companies may benefit from providing financial awareness as part of their employee benefit packages.

Education is also a brewing issue. Higher education in the UK is assuming many of the characteristics of a bubble – one which is arguably unsustainable. The cost of higher education is greater now than it ever has been.

Even so, more people are going to university, but that in turn is eroding the value of a degree. A high number of graduates competing for the same job means people will inevitably find themselves in jobs for which they did not study.

Aside from the impact on job satisfaction, the time may well come when school leavers fail to see the value of a degree and the number of graduates starts to decline. There is a clear opportunity for employers willing to offer help with education or access to career-focused training for the next generation.

Employers are assuming a much wider role in society. They are providing pensions, education and in some cases, psychological support to their employees. As technology becomes more pervasive, the range of services and benefits a company can offer its employees is growing. So too is the amount of data they can collect on each individual, enabling them to provide mentorship and support, in a way which also helps improve their own bottom line.

Education is also a brewing issue. Higher education in the UK is assuming many of the characteristics of a bubble – one which is arguably unsustainable

Employers are assuming a much wider role in society.

They are providing pensions, education and in some cases, psychological support to their employees

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References: A Disappeared: The Head Teachers Sacked and Gagged by Academy trusts: https://www.theguardian.com/education/2017/oct/24/disappeared-headteacher-sacked-academy-dismissal 1

More Than Half of Employees Feel Undervalued: http://www.hrmagazine.co.uk/article-details/more-than-half-of-employees-feel-undervalued-says-study 2

Uber Loses its London License Due to Lack of Corporate Responsibility: https://www.theguardian.com/technology/2017/sep/22/uber-licence-transport-for-london-tfl 3

Revealed: How Sports Direct Effectively Pays Below Minimum Wage: https://www.theguardian.com/business/2015/dec/09/how-sports-direct-effectively-pays-below-minimum-wage-pay 4

5

Britain Faces Headteacher Crisis: http://www.telegraph.co.uk/education/2017/04/27/britain-faces-headteacher-crisis-new-research-reveals-school/

6

What Motivates us at Work More Than Money? https://ideas.ted.com/what-motivates-us-at-work-7-fascinating-studies-that-give-insights/

7

The Ten Worst Companies to Work for in the UK: http://www.telegraph.co.uk/business/2017/07/04/10-worst-companies-work-uk-according-employees/

Make More Money by Making Your Employees Happy: https://www.forbes.com/sites/stevecooper/2012/07/30/make-more-money-by-making-your-employees-happy/#3c241bc65266 8

9 10

Pet Insurance is Now the Coolest Employee Benefit: http://fortune.com/2016/06/23/pet-insurance-is-now-the-coolest-employee-benefit/ Impact of an Aging Workforce: https://www.cipd.co.uk/knowledge/work/trends/ageing-workforce-report

Record Numbers of People Over 65 are Staying in Work: https://www.ageukmobility.co.uk/mobility-news/article/record-number-of-people-over-65-still-working 11

12

Measuring the Effectiveness of Pay and Reward Schemes: http://www.employment-studies.co.uk/system/files/resources/files/mp84.pdf

13

Want to Boost Productivity? Offer Incentives: http://www.businessnewsdaily.com/8506-employee-productivity-incentives.html

14

The Key Findings of Benefits Research: https://www.employeebenefits.co.uk/key-findings-of-the-benefits-research-2014/

15

Four Out of Ten Millennials Have no Pension: https://yougov.co.uk/news/2017/06/21/four-ten-millennials-have-no-pension-provision/

16

CareUK Launched Online Benefits Portal: https://www.employeebenefits.co.uk/issues/january-online-2014/care-uk-launches-online-benefits-portal/

17

The Future of Employee Benefits: https://www.moneysavingexpert.com/news/family/2012/12/lack-of-financial-education-costs-uk-34bn-a-year

18

Contacting Employees May Come at a Price: https://www.inc.com/bill-carmody/contacting-employees-after-hours-may-come-at-a-price-literally.html

Why Disgruntled Workers Represent the Biggest Threat to your Business: https://www.alchemyglobal.co.uk/disgruntled-employees-pose-biggest-risk-company/ 19

Lack of Financial Educations Costs ÂŁ34bn Every Year: https://www.moneysavingexpert.com/news/family/2012/12/lack-of-financial-education-costs-uk-34bn-a-year 20

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