Maximising the effectiveness of reward in tough economic times
Employee Benefits Advisers, Secondsight identify and provide solutions to the challenges to be overcome in implementing an effective reward scheme and how best to make sure it is clearly understood and received by employees.
We asked HR professionals to tell us the reward challenges they are set to face during 2012 and beyond. Overwhelmingly, respondents stated budget constraint (36%) and the economy (33%) as the biggest challenges, with 33% attributing this to the 2012 pension reform and auto-enrolment costs.
Of the issues surrounding their benefits package, improving employee engagement and ensuring they offer a competitive reward programme tops the list. To substantiate this, research from YouGov & Employee Benefits magazine claim that employees with three or more benefits perform much better than those without: 13% of employees are more motivated, 24% are stronger advocates of the employer and 27% are more highly engaged.
These results give a clear indication that the provision of benefits plays a significant role in employees' happiness and commitment to the organisation, which in turn, has a direct effect on the performance of the business. Despite this, the vast majority of employees fail to appreciate the benefits package provided by their employer. This begs the question; what can you do to maximise the effectiveness of reward in these tough economic times?
Talk to your staff and discover what their views are of the current or proposed reward package. The results will help determine whether you need to review your benefits programme.
Look at benchmarking your benefits and ask how competitive is it? Does it do enough to attract and retain talent? This will help draw conclusions as to whether you should look at re-aligning your benefits.
With budgets under scrutiny, explore ways in which you can get them to work harder for you. Are you utilising salary sacrifice? You could use any savings made on employer National Insurance (NI) to improve or re-align the pension and benefits package. Is your adviser providing you with the best service and most suitable product on your group risk benefits? If not, look at re-broking and re-designing your risk benefits. For one medium sized client, we saved them more than 1/3rd on their Income protection and life assurance cover.
Communicate with your workforce and explain the benefits package and how it will work for them. Some employers fail to give enough credibility to great communication; and we don't mean simply handing out a benefits booklet. Great communication will bind your benefits package together and deliver enhanced Return on Investment (ROI) and improved employee appreciation and engagement. All employers should engage their employees in conversation; face-to-face, in groups or over the phone, supplementing this with electronic and/or written communication.
Educate/guide/advise employees on their pension and how to get the most value from their pension spend, especially in light of auto-enrolment and changes to pension regulations from October 2012. In general, people think pensions are boring, with financial advisers being perceived in the same way. This is why it is important to work with an adviser who understands how to make this subject interesting, engaging, and dare we say it, fun.
As a direct result of the exclusive communication process we use at Secondsight, 81% of employees increase the value they place on their benefits, 76% of employees get on target for the pension they want and when asked, 2/3rds of employees said if they were offered another job, their benefits package would now have an impact on their decision to stay.
As it is the results that matter, it is of utmost importance that you measure the success of your benefits package. Ask employees for feedback and comments. Ask your benefits adviser to measure the take up of the pension and benefits, contribution rates, funds invested in, plus any other options and compare these against any previous figures you may have. Compare staff feedback now to the opinions you requested at the beginning of the exercise. If communicated and implemented well, the results should be significantly better. Do not accept anything less.
RM2 recommends Secondsight as a multi-award winning employee benefits adviser. They recommend, communicate and administer pension and employee benefits packages.
To learn how you can maximise the effectiveness of your reward package, you can join Secondsight at the Annual HR Masterclass. This event takes place in London on Wednesday 23rd May. Find out more and register at www.second-sight.com/events.