SPECIAL REPORT
Employee Benefits Solutions Eight Features of a Leading Employee Benefits Solution The Evolution of Staff Benefits The New Age of Benefits Solutions Designing a New Employee Benefits System Employee Benefits: What the Future Holds
Published by Global Business Media
Benefits engagement that shows staff you care At Staffcare, we deliver truly innovative technology that empowers businesses to deliver best in class employee benefit programmes. Our software solutions make the burden of administration, normally associated with benefits, a thing of the past. By seamlessly integrating with third party benefit provider systems, we save employee benefit professionals precious time and money. We are helping to change the ever advancing world of employee benefits for the better.
The first step to staff caring about their benefits, is making them easily accessible. Our mobile app is the latest step towards bringing people and their employee benefits together. To hear how Staffcare can help transform your employee benefits communication, get in touch: 0845 372 6644 hello@staffcare.net | staffcare.net
EMPLOYEE BENEFITS SOLUTIONS
SPECIAL REPORT
Employee Benefits Solutions Eight Features of a Leading Employee Benefits Solution The Evolution of Staff Benefits
Contents
The New Age of Benefits Solutions Designing a New Employee Benefits System Employee Benefits: What the Future Holds
Foreword 2 Tom Cropper, Editor
Eight Features of a Leading 3 Employee Benefits Solution Ray Sieber, Managing Director, Staffcare
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Total Flexibility Simple Systems Integration Scalability A Customised Look and Feel Powerful Processes Communication Tools Software as a Service Best of Breed Solution Conclusion Case Study – Callcredit Information Group
Publisher Kevin Bell
The Evolution of Staff Benefits
Published by Global Business Media
Published by Global Business Media Global Business Media Limited 62 The Street Ashtead Surrey KT21 1AT United Kingdom
Editor Tom Cropper Business Development Director Marie-Anne Brooks Senior Project Manager Steve Banks Advertising Executives Michael McCarthy Abigail Coombes Production Manager Paul Davies For further information visit: www.globalbusinessmedia.org 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.
Š 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.
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Tom Cropper, Editor
An Unstable Working Environment Can Businesses Afford It? The New Workplace
The New Age of Benefits Solutions
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Jo Roth, Staff Writer
Good for Business Financial Security Employee Benefit Solutions Ripple Effect
Designing a New Employee Benefits System
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James Butler, Staff Writer
Measuring Performance What Do You Hope to Achieve? Flexible Tailoring System Integration
Employee Benefits: What the Future Holds 13 Tom Cropper, Editor
Demographics An Ageing Workforce A More Flexible System
References 15
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Foreword I
T’S A well-worn cliché – a company’s most
In our opening article, Ray Sieber, Managing Director
valuable asset is its staff – but just how seriously
of Staffcare, talks about the key trends behind the latest
do businesses take this? A quick look at the
generation of portals. These integrate seamlessly into
corporate world reveals a wide range of attitudes.
existing systems, can be branded for each company
For every Google, with its lavish employee benefits
and tailored to their own specific needs.
and perks, there’s a Sports Direct or Amazon which
Elsewhere in the Report, we will look at why
have been accused of not treating their employees well.
employee benefit solutions are so valuable for a
At the heart of this struggle are the benefits and
business. Jo Roth will examine how businesses of all
perks a business provides for its employees. These
sizes are approaching the challenge before James
can represent a significant cost, but each employer
Butler examines the key factors behind an effective
is making a calculation: will a happy employee be
employee benefits solution. Finally, we will look to
more productive? Will benefits lead to an increase in
the future and see how benefits will evolve over the
turnover, improved loyalty and performance?
coming years.
There is a mounting body of evidence supporting the
Changing demographics, economic shifts and
business value of contented employees which is why
technological developments will all play a role in
the most successful corporations invest significant
shaping the future of work. Businesses of all sizes
capital into employee wellbeing.
should be looking to decide what they want that future
Key to this is a new generation of employee benefit
to look like.
solutions which help companies get the best out of their employee packages. They create a single hub through which staff can tailor packages to their own needs; they reduce administration and produce large amounts of data to assess performance.
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
Eight Features of a Leading Employee Benefits Solution Ray Sieber, Managing Director, Staffcare
Discover the latest technology innovations to enhance employee engagement.
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OMPANIES THAT want to be at the cutting edge of talent acquisition and retention are looking to deliver innovative employee benefit solutions that provide easy online access to a growing range of attractive benefits. Our long experience in this market shows there are eight key features of a successful programme which I would like to share with you.
1. Total Flexibility To retain, reward and attract top talent The challenge of attracting, rewarding and retaining talent is affecting more and more businesses today. Whether your company is struggling to recruit the best employees or losing them to the competition or simply through an ageing workforce, an attractive and engaging benefits programme is vital. By providing a diverse and targeted menu of benefits that meet the varied needs of your workforce, you could increase staff retention, drive recruitment and boost the business as a great place to work. Employers may be supporting people from the lower to the upper age ranges, so the reward package of the future should be more of a pick and mix offer than a one size fits all.
Many employers have moved away from a fixed package of benefits to a more flexible range where employees can choose those they want. For example, older workers are likely to want different rewards to younger co-workers. Employees with families may consider childcare vouchers while their single counterparts may prefer gym membership. So, the trend for customised and personalised benefits is on the increase. Companies considering an employee benefits solution should ensure their chosen system not only has the ability to accommodate a wide range of benefits, but provides the flexibility to offer, add and administer a multitude of customised benefits, offers and promotions quickly and easily.
2. Simple Systems Integration Single platform provides secure access An efficient employee benefits platform should be able to integrate sensitive and disparate data sets and systems via one common interface. This includes integration with benefit providers.
Financial education and modellers can be included to guide employees throughout their careers and as they approach retirement in the new world of pension freedoms
A BENEFITS PORTAL PROVIDES EASY ACCESS
FLEXIBLE BENEFITS PROVIDE CHOICE
It enables the automation and efficient running of important HR and payroll functions and also provides a single platform for the employer to manage all benefit enrolment, offers, adjustments and communications. WWW.CEOREPORTS.COM | 3
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Employees should be able to access the system with “single sign on” where they can manage all their benefits including pension contributions, healthcare, salary sacrifice and access shopping vouchers and discounted holidays. This ensures one seamless user journey with other core systems. They can also view and print total reward statements showing the combined value of all their benefits. Their personal data is highly confidential, sensitive and needs to be secure. When selecting a new benefits solution, the guarantee of secure and seamless integration of different benefit data sets along with your confidential employee data and systems is paramount. With the amount of data increasing, the ability to aggregate, manage, secure and interpret this big data is vital.
3. Scalability
By providing a diverse and targeted menu of benefits that meet the varied needs of your workforce, you could increase staff retention, drive recruitment and boost the business as a great place to work
A solution that grows with you Big or small, your benefit solution should scale to your future business needs. So think ahead. What will your business look like in three or four years? Will your employee benefit requirements still be the same? It’s not easy to predict the future, but you can be prepared by adopting a scalable benefits solution that has the capacity to grow with you and work around your evolution. Whether you employ just a few people or thousands, your benefits software needs to have the capacity to accommodate today’s needs – and those of tomorrow. In today’s fast paced environment, companies can grow rapidly and downsize just as quickly. A scalable benefits solution that can handle your future needs can avoid any unexpected issues and costs.
4. A Customised Look and Feel Personalise your portal and boost your brand Your benefits portal should be designed to reflect your brand identity and culture. Are your employees living your brand vision every day? Research suggests that strong corporate culture tends to lead to strong performance. Your internal communications and tone of voice should reflect your core vision and values to help you build and promote your brand holistically from the inside out. A branded and personalised benefit portal can engage employees, encourage adoption and regular use, as well as demonstrating the organisation’s investment in its benefits package. This look and feel must also be adaptable, as a static brand will lose engagement. It is vital to update the content regularly to ensure employees remain engaged. 4 | WWW.CEOREPORTS.COM
BRANDED PORTALS INCREASE ENGAGEMENT
5. Powerful Processes Reduce administration time and costs The potential burden of extra administration is a reason why many businesses postpone a new benefits project. However, a dedicated platform can actually reduce administration time and costs. An effective benefits solution should improve information management, reporting and simplify notoriously complex tasks such as budget forecasting for benefits spend and provider invoice reconciliation – so you can focus on other important HR issues. It should also integrate data from HR systems, payroll systems, benefit providers and your own administration systems so everything you need is in one place to manage and administer your benefits programme more efficiently. And it should be simple to use. It’s good practice to verify that your selected benefit solution includes a variety of automation tools, including key reporting features, workflow based intelligence, notifications and scheduling to reduce administration time and costs. Giving HR managers the tools to actively monitor engagement can help them evaluate the success of the solutions and benefits available to ensure the right packages are on offer.
6. Communication Tools Improve employee engagement Combining benefits and communications that are accessible all in one place enables a simpler way of engaging with your employees – fast. Targeted communications will ensure that employees are aware of what is available. They can also help them make educated choices through the selection process by including examples of benefits selected by other people like them. Financial education and modellers can be included to guide employees throughout their careers and as they approach retirement in the new world of pension freedoms.
EMPLOYEE BENEFITS SOLUTIONS
With a lower cost of entry, seamless upgrades, backups, reduced time to prototyping and easier integration and scalability, SaaS beats on-premise alternatives in most HR areas every time.
8. Best of Breed Solution
TOTAL REWARD STATEMENTS SHOW THE VALUE OF ALL BENEFITS BEING PROVIDED
Benefit solutions that include built in communication tools enable HR to provide employees with access not only to all the benefits packages, promotions, and total reward statements, but also all the other important HR information and documents such as company policies, staff handbooks, training guides and online pay slips. HR teams can send messages to employees about new schemes and company news. Combined with the explosion of mobile technology and remote working, the ability to drive engagement across multiple devices in any location is paramount. Powerful data analysis tools can also enable the HR team to track employee activity and analyse trends, identifying the impact of communications and the popularity of benefits.
7. Software as a Service Rapid deployment, accessible anywhere Businesses looking to deploy a new benefits solution should always opt for a Software as a Service (SaaS) deployment to offer a straightforward, cloud-based, self-service process to employees. Using SaaS, employees access their benefits portal remotely over a secure web connection on any device, at any time from any location. This self-service approach to benefits and rewards management is proven to maximise process efficiency and, importantly, strengthen the relationship between the employer and its workforce. For you as a business, no hardware investment or additional IT technical support is required on site. It’s easy and fast to deploy at the flick of a switch. As there is no on-site product installation, there is also no disruption to normal routines and processes and no need for re-engineering of any existing internal IT infrastructure. You can focus on running the business, confident that your personnel data is running on a secure SaaS platform.
Proven experience coupled with fast and efficient deployment A best of breed, specialised service solution is typically perceived as expensive and complex to integrate. However, the advent of cloud has shifted these perceptions. Deploying the solution via the cloud allows companies to implement applications in weeks, not years, and combined with API technology, cloud-based applications can be integrated with legacy applications and other cloud-based applications quickly and easily. A best of breed solution is fully focused on the service it is designed to deliver. It keeps ahead of and continues to add new features and functions, negating the need to purchase software upgrades or invest in expensive software maintenance contracts. Today, there is simply no need for you to make concessions and purchase an ERP platform that can do everything – but probably only has one great feature. Best of breed technologies by their nature, are flexible so no matter who your HR, payroll or benefit providers are, the systems will work together. Additionally, you are not limited if you choose to change one of these providers. The new provider can plug in to your benefit solution. With API technology, companies can pick and mix the best applications across departments and integrate them quickly via the cloud. With a best of breed employee benefits solutions provider, you know you are working with the best supplier in the field with specialist knowledge and experience in benefit technology and best practices over many years. One that can help ensure the implementation runs smoothly and efficiently, maximising your ROI. An integrated benefits management service provides the complete end-to-end solution.
An integrated benefits management service provides the complete end-to-end solution
Conclusion Until now, many employers have considered remuneration to be the top concern for employees, but an appealing benefits package can be much more valuable than a pay rise. It can also aid your business with recruitment and retention. Today, employees are a diverse group with different needs. Employers need to respond with a wider range of benefits to meet those needs. A successful benefits solution will offer a more personalised experience with targeted WWW.CEOREPORTS.COM | 5
EMPLOYEE BENEFITS SOLUTIONS
employee communications that speak directly to different employee demographics. Effective communications will ensure that employees are fully engaged so they value the benefits and employers achieve an effective return on their investment. Great employee benefits are all about keeping employees engaged in the success of a business. With happy, well cared-for employees, companies are better able to motivate the entire workforce, focus on their mission and successfully achieve their goals. Aligning benefits strategy with business strategy is key.
Contact Web address: www.staffcare.net Twitter: https://twitter.com/Staffcare LinkedIn: https://www.linkedin.com/ company/636392?trk=tyah Email: hello@staffcare.net Tel: 0845 372 6644
Case Study
Best of breed technologies by their nature, are flexible so no matter who your HR, payroll or benefit providers are, the systems will work together
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Callcredit Boosts Employee Engagement When Callcredit decided to make a step change in their benefits offering and portal for employees and reinvigorate the user experience, they turned to Staffcare to provide the system. Their existing platform, which had been running since 2010, was only available to the UK business and take up by employees was poor due to limited benefits and inflexibility. They wanted a new platform to provide: • rolling enrolment for all benefits where possible • salary sacrifice • dynamic online total rewards statements •a communications strategy to engage their employees • access across the whole group To introduce the new system, they ran a multimedia communications campaign resulting in 89% of their 1,000 employees logging onto the benefits website over the launch period. The campaign included new branding and multimedia-based promotions, including a new website and a quiz for staff. At the centre of the campaign were characters (Avatars) representing different lifestyle approaches, ranging from a discount-seeking bargain hunter and gadget-loving innovator, to a baker
CLEAR COMMUNICATIONS HELPED DECISION MAKING
who likes a comfortable home life. Employees were then able to compare themselves and decide which benefits were best for them. Callcredit saw a big increase in the number of staff making active benefit selections, rising from 10% in 2014 to 71%. “We put a lot of effort into creating new benefit options that would meet our employees’ diverse needs. But our investment in the communications also made a big difference and got people actively participating in the programme. An added benefit of the communication exercise was to bring all our benefits together in one place, with strong branding that we are now using in our careers marketing. We’ve already been able to attract new recruits on the back of the new suite of flexible benefit materials. “ Tim Simpson, Reward Manager at Callcredit
EMPLOYEE BENEFITS SOLUTIONS
The Evolution of Staff Benefits Tom Cropper, Editor Why benefits will continue to play an important part in workplace relations.
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N TODAY’S unstable economic environment, it’s tempting to think of the modern workplace as cold and uncaring. An environment of unreliable employment leads to dissatisfaction and anger among workers, but as we move into a post-Brexit world, delivering a strong, stable workplace may be more important than ever.
An Unstable Working Environment Many of the statistics surrounding work are dispiriting. The so-called gig economy is booming. The number of employees on zero hour contracts is now close to a million1. According to a recent report, half the UK workforce could be freelance by 20202. Work is becoming more unstable with increasing numbers of people working on a freelance basis. Low pay is endemic. A study found that one in five jobs in London are low pay3. The press is packed with tales of staff being forced to work for below minimum wage, in poor conditions and for excessive hours. Sports Direct was recently forced to admit it had failed to pay factory staff the minimum wage4. That comes at both a social and economic cost to society. Research from the TUC suggested that the gig economy costs the UK Treasury £4bn per year in lost tax receipts5. Stagnant wages and growing wealth inequality fuel dissatisfaction and have been linked to a rise in radical parties on the left and right. Research during the recent US election found that supporters of Donald Trump were more likely to believe they are worse off now than they were ten years ago6. Against this, businesses of all sizes find themselves struggling to incorporate new obligations such as auto-enrolment and the living wage. Peter Smith, Chairman of the Oxfordshire Chamber of Commerce, warned that smaller companies could struggle to afford the minimum wage7. Research from the Federation of Small Businesses, found that many were still struggling to understand their obligations under auto-enrolment8.
Can Businesses Afford It? Against this backdrop, many businesses question whether they can afford additional employee benefits. Indeed, research provided to HR Magazine by Cass Business School suggested that workers were more likely to suffer financial problems than they were 30 years ago because employee benefits had failed to keep pace with the modern workforce9. The workforce has changed: it’s become older and includes more female and disabled workers. Compared to 30 years ago there are 46% more older workers and 11% more people living with a disability. Employee benefits – designed to offer financial protection, though, have not kept pace. Smaller businesses question the value of providing benefits. A recent study from Pure Benefits shows that businesses with fewer than 11 members of staff are unlikely to actively promote benefits and work/life perks to employees, even if they are offered10. Businesses can find themselves trapped in a short-termist bottom-line perspective. However, there is a wealth of evidence to suggest that providing greater employee benefits will drive business performance. The Cass Business School report found that employees who are not financially secure are less productive than those who feel comfortable. The high cost of turnover, recruitment and knowledge-loss also means businesses have a vested interest in retaining talent and improving their employees’ own sense of wellbeing. The landscape for employee benefits is changing – not just in age, composition and expectations of the workforce, but also in the thinking surrounding employee wellbeing. A report from Unum identified the following trends impacting workplace benefits11: •A ge: There will soon be up to five generations working in the same working environment. Teenagers, working part time jobs, will be working hand in hand with people over the age of 65.
Many of the statistics surrounding work are dispiriting. The socalled gig economy is booming. The number of employees on zero hour contracts is now close to a million
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The landscape for employee benefits is changing – not just in age, composition and expectations of the workforce, but also in the thinking surrounding employee wellbeing
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• Mindfulness: There is a greater awareness of mental as well as physical wellbeing. In a connected age, digital overload is a serious problem. Employees want flexible working and the ability to have downtime and meet commitments outside of work. • Intuitive workplaces: Technology has changed the ways employees view data. The use of social media means more employees have digital profiles. Employers can capitalise on this trend by bringing in digital technologies to interact with their employees. Intranets can share news across departments, increase engagement and help employees select their own personalised benefit packages. • The Collaborative Workplace: Technology can break down the barriers between departments, locations and hierarchies. People are regularly working together with teams based in multiple locations. The report suggests this is sparking a shift away from traditional workplace traits associated with masculinity and gender aggression towards other traits such as empathy, flexibility, openness and collaboration. So how can employers evolve their benefits structure to account for these trends? The first way is to deliver greater flexibility and choice. A worker in his sixties will want something very different from graduates in their twenties. In addition, today’s generation of twenty somethings face different challenges and have different needs from those of previous years.
Today, they are saddled with student debt, rising rent prices and the seemingly impossible task of getting on the housing ladder. To assume the same package of benefits from yesteryear will work today is a fundamental error.
The New Workplace Socioeconomic shifts are seeing a change in the employer-employee relationship. For example, it used to be the role of government to provide education. Now, further education is becoming more and more expensive. The Unum report suggests we may see companies beginning to offer workplace training schemes as an incentive. Equally, flexible working is becoming increasingly important. Unum’s Financial Director Survey (2014) found that 78% of businesses offer flexible working as a benefit12. It’s easier to do this now than ever before thanks to the spread of cloud-based and online administrative systems. Employees no longer need to be in the office in order to make a full contribution. Benefits, therefore, need to evolve in a way which matches the way we work. They must be flexible, intuitive and wide-ranging. Managing such a complex structure and ensuring it achieves its goals is by no means straightforward. Technology can hold the key with a new generation of employee benefit portals. These will make it easier for employees to access their benefits and tailor them to their own needs.
EMPLOYEE BENEFITS SOLUTIONS
The New Age of Benefits Solutions Jo Roth, Staff Writer Forward-thinking companies are realising the advantages of employee benefits, but to be truly successful they need the right delivery system.
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IGITAL TECHNOLOGY has done a lot for the world of business; it’s helped to streamline administration processes, it’s improved marketing and the preparation of accounts and it’s now being put to use in delivering employee benefits packages in a way which increases staff engagement, saves money and promotes loyalty.
Good for Business In a difficult economic climate, many businesses will question whether they can afford a comprehensive benefits package. However, a look at some of the leading businesses shows how they can be effective. Google sets the standards for employee benefits and it seems to work. People love working there; current and former staff are happy to head onto forums such as Quora to discuss their favourite perks. Among the most popular appear to be a free shuttle bus, extensive maternity and paternity pay, having showers on the Google Campus, free food, free gyms and much more. You can even bring your pets to work and accrue ‘massage credits’. They combine to make Google a famously positive place to work, aid employee retention and help them attract the best tech minds in the world. According to one former employee, Aaron Lichtig, generous maternity leave has had an enormous impact. “Why does Google provide such generous perks to new moms and dads? It improves retention,” he writes. “After the new maternity leave policy was enacted the number of women leaving Google decreased by 50 per cent.”13 Other workers enjoy the atmosphere the campus creates, their co-workers and the chance to meet and talk with many tech leaders and thinkers. Tech companies tend to lead the way in terms of employee perks. In 2014 Dan Price, founder of Seattle-based credit card processing firm Gravity Payments, announced a new minimum
wage for employees of $70,000 a year. It won him Entrepreneur of the Year, the adulation of his staff, and helped him become a poster boy for the battle against income inequality. His decision has been good for business in a number of ways. The publicity surrounding it created a surge of interest. Inc.com reports that customer enquiries increased from 30 per month to over 2,000. In a world in which customer acquisition is expensive, that might have paid off a large chunk of his initial investment. Gravity boasts a customer retention rate above 90% compared to an industry average of 68%14. However, there has been a backlash. The millionaire shockjock Rus Limbaugh was outraged and articles appeared featuring disgruntled employees calling him a socialist. While lower ranked individuals were delighted with their bumper pay rises, some of the more senior professionals received only a small bump. They complained that he was rewarding most those who were least productive. It raises an important question: will employees react negatively to a benefit strategy if they feel others are being unfairly rewarded – even if their own situation improves?
Generous packages attract some of the best talent, putting them in an advantageous position against their competition. What they need, though, is an effective delivery solution, which is where the next generation of employee benefit platforms comes in
Financial Security Other companies are looking at ways in which they can improve the financial security of their workforce. With households facing an average debt of £10,000, according to a report from PwC15, financial security is a major issue. In the US, PwC is one company which has announced plans to help employees pay off their student loans. The offer, they say, could reduce loan obligations by as much as $10,000 per employee. “While we know that no organisation can singlehandedly take on the issue of student debt, it’s an area where we believe we can and should make a difference,” said Tom Codd, Vice Chairman US Human Capital Leader. “We all have a stake in helping young people build healthy financial futures faster because that in turn allows them to contribute to our communities and society more broadly.” WWW.CEOREPORTS.COM | 9
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In a difficult economic climate, many businesses will question whether they can afford a comprehensive benefits package
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Employee Benefit Solutions These are some of the highest-profile examples. However, they do show how valuable employee benefits can be to a company – enhancing staff retention and even helping it to secure new business. Generous packages attract some of the best talent, putting them in an advantageous position against their competition. What they need, though, is an effective delivery solution, which is where the next generation of employee benefit platforms comes in. These have evolved enormously in the space of just a few years as companies seek new ways to boost staff engagement and participation in benefits. The results can be remarkable. When Callcredit installed an online benefits tool, 89% of staff logged-on over an 11-day enrolment period16. Callcredit offers a variety of benefits ranging from salary sacrifice, gadgets, car leasing and much more. They worked with Staffcare to develop an online portal tailored to their own branding which brought all the benefits into one place. The platform has a series of different characters to define a selection of packages. There’s a discount seeking bargain hunter, a gadget-mad tech head and a baker who loves a comfortable home-life. The platform has a quiz which allows employees to see which of the characters most aligns with their own lifestyle, and so helps them to select a package of benefits which are most aligned with their requirements.
“We put a lot of effort into creating new benefit options that would meet our employees’ diverse needs. But our investment in the communications also made a big difference and got people actively participating in the programme,” said Tim Simpson, reward manager at Callcredit. “An added benefit of the communication exercise was to bring all our benefits together in one place, with strong branding that we are now using in our careers marketing. We’ve already been able to attract new recruits on the back of the new suite of flexible benefit materials.”
Ripple Effect The advantages ripple across the company. They improve staff wellbeing and loyalty. Happy staff are more likely to be productive and perform at a higher level. When they see their employer taking the time and effort to deliver a benefits offering designed around their needs, their attitude towards that employer improves markedly. Administration teams also benefit. Indeed, one of the main reasons why companies introduce an online benefits solution is to streamline the administration surrounding their delivery. It saves time, effort and also creates enhanced metrics to assess the value of the company’s benefits strategy. They can see how popular each benefit is, how staff are using them and assess other benefits or perks which could further improve their relationship with staff.
EMPLOYEE BENEFITS SOLUTIONS
Designing a New Employee Benefits System James Butler, Staff Writer Spending money on employee perks can do great things for a business, but they need to be delivered in the right way.
D
EMOGRAPHICS, POLITICS, economics and technology all have an impact on employee/employer relationships. The question of benefits sits at the heart of this. Will they remain as relevant in the future workspace? Can employers justify the cost and how can they go about creating a package which works for everyone? Previous articles have outlined many of the challenges – in this article we’re going to look at how businesses of all sizes can find a solution.
Measuring Performance Assessing and analysing the cost, versus reward of an employee benefits package will be a primary concern. This is not always straightforward. It’s easy to see and measure costs – they are right there in the accounts, but rewards can be somewhat intangible. As such, employers tend to underestimate the returns – if these are shown to be less than the upfront costs, employers will question whether it’s worth the time, money and effort. Return comes in various forms. The Future Workplace report by The Future Laboratory suggests businesses which fail to address current employee trends can struggle in a number of ways17. Failing to take into account the needs of older workers, it says, could cost British businesses £44bn in staff turnover and reduced productivity. Failing to recognise the benefits of intuitive technology could cost £29bn in staff turnover, while businesses might save a total of £90bn by harnessing the power of remote and flexible working. Happy workers are more productive. A study by economists at the University of Warwick found that happy workers were 12% more productive18. Happiness stems from personal financial security, fulfilment in the workplace, engagement with the company and its objectives. The right package of staff benefits can do a great deal to improve staff loyalty. The 2020 Workplace survey found that better benefits
were the second biggest factor employees value in a company, just behind a competitive salary. A good working environment, career development opportunities and opportunities for training also feature highly.
What Do You Hope to Achieve? Businesses should start by thinking about why they are implementing a scheme in order to benchmark that initial goal against results. Are they looking to develop employee engagement, increase awareness or improve retention? Do they intend the benefits scheme to attract new talent into the group? If so, a business would have to promote the benefits packages externally. This has worked for the likes of Google, Campbells Soup, Red Bull and Hootsuite, all of which have received favourable press for their benefits packages and positive working environment. This puts them at the front of the queue for talent acquisition and can also help gain clients and raise profile. As online benefits solutions become more sophisticated, they are developing the ability to capture an increasing amount of data. This can be brought together to produce extensive analytics and reports about how the benefits strategy is performing. Users can see how it is being used and which features are most popular; they can see whether uptake is increasing and how much more aware staff are. All this can be quickly displayed in a report. All these metrics can be pulled out into a wider assessment. However, to gain a fair reflection, a company will need to consider all the possible benefits. These include: •E mployee loyalty: Has staff retention improved since the introduction of a scheme? •P roductivity: Has the performance of individual staff improved since the scheme came into force? •T alent acquisition: Surveys of new employees can offer insight about whether a benefits scheme has encouraged them to choose your business over that of rivals.
Assessing and analysing the cost, versus reward of an employee benefits package will be a primary concern
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Businesses should start by thinking about why they are implementing a scheme in order to benchmark that initial goal against results
•A dministrative burden: Automating the benefits system into one online portal can potentially save time and effort in administration. This has benefits both in reducing operational costs and freeing up members of staff for more productive and profitable tasks. All this can be brought together to produce a clear return on investment analysis.
Flexible Tailoring However, it does have to be the right package for each demographic. Workplaces are becoming more diverse in terms of age, gender, disabilities and lifestyle. The age, lifestyle and personality of each employee will determine which benefits they find most appealing. For example, a thirty something with a family might value vouchers or health insurance while a single person of the same age might prefer gym membership. Tastes vary and, with people increasingly expecting a level of personalisation in all their services, employers will be hard pressed to get it right. The answer will be to put the decision in the hands of employees and let them design their own benefits package. Benefit portals provide a central location where they can choose from available packages. Some use quizzes or questionnaires to help employees decide which option they find most appealing. It’s a reversal of the old-fashioned top-down attitude in which employers made decrees and passed these down the food chain. In this environment, it’s the employee who is in control – picking and choosing what he or she wants. 12 | WWW.CEOREPORTS.COM
There are many different benefit portals out there. The market is growing, which means so too are the providers. They vary in cost, design and features. Some will simply give people a chance to choose from a basic selection of benefits; others will be far more extensive. They can interact with employees, gathering much more feedback on what they want – what works and what does not. Furthermore, interactive analytics centres can provide a huge amount of data to managers and help them to assess how their strategies are performing. It’s another string to the bow of a manager in analysing the true returns of a package.
System Integration Last, but not least, is the way in which they integrate into existing business systems. Some are simple off-the-shelf packages which are difficult to brand or tailor in any way – other companies take a much more proactive approach – working with the client to design a solution which works around their system, conforms to their own branding and addresses the specific ways in which that business functions. This is a far more personalised approach, which is where the true difference between individual providers lies. Technologies can appear similar from the outside, but can have very different impacts. Whether or not a benefits strategy truly works in the real world will depend to a significant degree on how these are incorporated into the company.
EMPLOYEE BENEFITS SOLUTIONS
Employee Benefits: What the Future Holds Tom Cropper, Editor Developments in demographics, economics, science and technology will all play a role in how employees and employers interact in the future.
C
OMPANIES OF all sizes have always offered benefits to attract the best talent. However, in the face of a world which is changing rapidly, what will they look like? Will they still be relevant? Will tomorrow’s workforce want something different and will employers adopt new strategies to deliver benefits?
Demographics The clearest change will be the demographics of the workforce. The next few years will witness the emerging dominance of millennials. In a Report by PwC – ‘Millennials at work – Reshaping the workplace’ – it is estimated that by 2020 millennials will form 50% of the global workforce. In addition, they will be moving into positions of increasing seniority and have a much greater influence on the way companies work. That’s important because there are signs millennials work in a different way and want something different out of their work. They are the first generation to have grown up in the world of digital technology. They are more flexible and mobile in the way they work; are more willing to work from home or in the evenings and use online communication platforms such as Skype. This is a generation which aims to become less tethered to the desk and less reliant on the office. Older generations can sometimes be disparaging about their younger colleagues. They are often characterised as fickle, impatient, ambitious, hungry for praise and fragile when criticised. Such a view tends to draw on their own prejudices. However, research shows that, much like the generations that went before them, millennials prize conventional things such as salary and financial incentives. The 2016 Deloitte Millennial Survey19 found that money was, indeed, the driving force. However, it’s when the pay between two organisations is equal that other factors come into play.
Top factors included a good work-life balance, opportunities to progress further, flexible working hours and location and a sense of meaning. Millennials also value a job which has a strong sense of purpose and one which has a positive impact on the world. It’s a theme which continues with the even younger Generation Z (people born between the mid-nineties and early 2000s). They are about to hit the workforce and will increasingly begin to make their presence felt over the next few years, and employers will need to consider what they want from work. A survey from Monster found that the most important things they want are real perks such as health insurance, a boss they respect and, of course, a competitive salary20. They also want work which has meaning and to be the owners of their careers. They want to be able to shape the way they work and to feel a sense of involvement with the business. More than any previous generation, they are entrepreneurial in spirit. Over half said they would like to have their own business, compared to 32% across all other working generations. All in all, though, they are a little more traditional than millennials. They are looking for traditional work benefits which will help them improve their security.
The next few years will witness the emerging dominance of millennials. Already these individuals comprise half the workforce and by 2017 they will make up more than half the adult population
An Ageing Workforce While businesses will have to cater to younger people, they should also remember that older generations will be staying in work for longer. By 2020 a third of the workforce will be over fifty21. That generation can expect to live longer, healthier lives than any that has gone before. They show a willingness to continue in work for longer. A government report in 2016 recommended baby boomers to stay in work beyond retirement age to improve their health and wellbeing. Professor Dame Sally Davies, Chief Medical Officer for England said: “Staying in work, volunteering or joining a community group can WWW.CEOREPORTS.COM | 13
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Employers have a real stake in retaining older employees and benefits can play a role
make sure people stay physically and mentally active for longer. The health benefits of this cannot be overestimated22.” Generation X and Y employees expect to continue working far beyond the current retirement age, and have little confidence in the state to provide for their older age. This ageing workforce can bring benefits. The exit of older generations from leadership positions will create a knowledge gap for companies. Replacing those people, and keeping hold of that expertise – even if it involves a part time position – will be valuable. Employers have a real stake in retaining older employees and benefits can play a role. An ageing workforce coupled with the tendency to have children in later life will also impact increasingly on the social needs of some employees. In the past, workers might have been able to rely on grandparents to perform childcare. However, that generation is staying in work longer. Equally, as people live longer, degenerative conditions such as dementia are becoming more common, leading to the rise of what’s being termed the sandwich generation – people who are caring both for children and older relatives. Research from Helping Hands found that 65% of people in the sandwich generation were struggling to balance the care needs of the older and younger generations23.
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From an employee benefits standpoint, their wants and needs will be more complex. Meeting the childcare requirement for employees is relatively straightforward. However, the needs of someone caring for an older relative are far more complex. To retain the skills and experience of that generation will demand an entirely new approach from employers.
A More Flexible System Employers then will face a much more varied workforce in the future, with everything from the tech savvy Generation Z to the experienced baby boomers collaborating in the same place. Each want something slightly different from work, but it’s not enough to simply categorise benefit packages according to age or lifestyle. People want a more personalised experience in all walks of life. They are independent and will not necessarily conform to the stereotype of their demographic. It’s impossible to say precisely what any individual will want, so they will need the flexibility to create their own personalised packages. Employers can deliver this through the next generation employee benefits portals. These can bring together the various benefits on offer and allow people to access them on a single platform. It’s a quick and simple method which draws on the way in which people already shop online.
EMPLOYEE BENEFITS SOLUTIONS
References: More than 900,000 UK Workers on Zero Hour Contracts: https://www.theguardian.com/uk-news/2016/sep/08/uk-workers-zero-hours-contracts-rise-tuc
1
Half of UK Workforce Could be Freelance by 2020: http://www.thecdi.net/News-by-Category/Key-Sector-News/half-ofuk-workforce-could-be-self-employed-by-2020
2
Almost one in Five Jobs in London are Low Pay: http://www.independent.co.uk/news/uk/home-news/london-low-pay-living-wage-jobs-new-policy-institute-wealth-inequality-a7396456.html
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4
Sports Direct Warehouse Staff Who Were Underpaid Could Receive Back-pay: http://www.independent.co.uk/news/business/news/sports-direct-staff-backpay-minimum-wage-underpaid-mike-ashley-1m-a7191796.html
5
The Gig Economy Costs the Government £4bn: http://uk.businessinsider.com/tuc-gig-economy-costs-the-government-4-billion-a-year-2017-2
6
Politics of Anger: https://www.bloomberg.com/politics/videos/2016-09-19/politics-of-anger-low-wages-and-the-rise-of-populism
7
Smaller Businesses Could Struggle to Afford Minimum Wage: http://www.oxfordmail.co.uk/news/14397581.Warning_smaller_businesses_could_struggle_to_pay_new_living_wage_as_rise_comes_into_effect_today/
8
Auto Enrolment Burden on Small Businesses: http://businessadvice.co.uk/hr/payroll/auto-enrolment-burden-on-small-employers-could-be-significant/
9
Workers More at Risk of Falling into Financial Difficulty: http://www.hrmagazine.co.uk/article-details/workers-more-at-risk-of-falling-into-financial-difficulty-as-employee-benefits-fail-to-adapt
10
Micro Businesses Fail to Promote Benefits to Staff: http://smallbusiness.co.uk/businesses-promote-employee-benefits-2535032/
11
The Future of Employee Benefits: http://landing.unum.co.uk/future-employee-benefits
12
Financial Directors are More Interested in Wellbeing Than you Think: http://www.unum.co.uk/hr/financial-directors-interested-wellbeing-think
13
What’s the Best Perk at Google: https://www.quora.com/Working-at-Google-1/What-is-the-best-Google-employee-perk-and-why
Here’s What Really Happened at the Company Which Raised the Minimum Wage: http://www.inc.com/magazine/201511/paul-keegan/does-more-pay-mean-more-growth.html
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Average UK Household Owes £10,000: https://www.theguardian.com/money/2015/mar/23/average-uk-household-owe-10000-debt-by-end-2016 Call Credit Boosts Staff Engagement: http://www.staffcare.net/2015-11-callcredit-boosts-staff-engagement The Future Workplace: https://www.lsnglobal.com/markets/article/16532/the-future-workplace
18
New Study Shows Happy Workers Really Are More Productive: http://fortune.com/2015/10/29/happy-productivity-work/
19
Deloitte Millennial Survey: https://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.html
20
Gen Z is About to hit the Workforce: http://www.cnbc.com/2016/08/30/gen-z-is-about-to-hit-the-workforce-heres-what-they-want-in-a-job.html
21
Third of Workforce Over Fifty: http://www.robertsoncooper.com/good-daily-work-article/646-third-workforce-over-50-2020
Health of the Baby Boomer Generation: https://www.gov.uk/government/news/health-of-the-baby-boomer-generation
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Sandwich Generation. It’s No Picnic: http://www.helpinghandshomecare.co.uk/news/sandwich-generation/
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Notes:
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