Employee benefits provision

Can it impact on talent retention, motivation and productivity levels?

he range and scope of employee benefits are growing rapidly, but for benefits to

T make a positive impact on an individual, the individual first needs to be aware of and
understand the benefits their employer currently offers.
However, to communicate the advantages, scope and potential impact of employee benefits
successfully, organizations themselves need to understand their people, what they want
from individual products and their motivation to acquire them.
Successfully communicating the advantages, scope and potential impact of benefits presents
a real opportunity for employers when trying to retain talented employees. Research
undertaken by the Chartered Institute for Personnel and Development shows that the better
benefits are communicated, the more staff appreciate their employer and, even when
employees do not take up benefits offers, engagement with the organization is increased.
Research recently undertaken by Chartis Insurance UK Limited reviews company and
employee views about the provision and communication of voluntary employee benefits
(VEBs) to understand how these offerings can create engagement with a workforce.

Disconnection between employers and employees

The reasons behind an organization’s decision to offer VEBs are varied. The wide-ranging
reasons why organizations offer benefits can be linked closely to the culture of an
organization; for example, to support other HR policies and initiatives, such as employee
well-being and fitness within the workplace. However, regardless of the reasons why
benefits are offered, it is fair to say that the selection of which benefits to offer is complicated
and time-consuming and that, to be done effectively, cannot be rushed or undertaken
without consultation throughout the business.
This position is complicated by the fact that many HR and reward professionals do not have
an up-to-date picture of their employees’ interest in VEBs. HR’s perception of employee
interest does not match employees’ actual usage of benefits. The disconnection between
employers’ perception of employee interest and employees’ actual take-up of benefits
underlines the opportunity HR professionals have to communicate better; both their reasons
behind benefits offerings and the advantages of benefits take-up for individuals.
This position is further supported by figures suggesting that although 80 percent of
employees report they find the concept of VEBs appealing, 38 percent said they had no
interest in taking out the VEBs offered by their employer in the near future. This signals that
although employees welcome the provision of benefits, what is on offer is not compelling,
engaging or relevant. Or, more importantly, is not being communicated clearly enough to
prompt action and take-up on the part of employees.

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 Engaging with employees
There is a mismatch between HR and employee perceptions of the degree to which
employees are involved in the process of selecting benefits. 86 percent of employers claim
to consult with employees, as well as union representatives (80 percent) and employee
feedback committees (87 percent). However, only 23 percent of employees claim to be
consulted in benefits selection, although 82 percent of employees agree that all staff should
be consulted.
These findings underline the opportunities open to HR and reward professionals to ensure
consultation takes place and employees are involved. While HR may think they are already
doing this, the fact that employees so significantly contradict this position shows positive
action needs to be taken.

The challenge of communication

Employers use a wide range of channels to communicate the information employees need
about company benefits schemes. However, there seem to be some inconsistencies
between which channels employers and employees consider to be the most effective at
communicating benefits. Both employers and employees tend to agree that the use of
company Intranet, company benefits booklets and communications in pay slips increases
awareness. But communications through the employers’ most favored channel – employee
induction – is seen as one of the least effective by employees.
The Chartis research uncovered a tendency for employers to rely on the channels that are
most effective at reaching employees quickly and easily. When prompted on the efficacy of
communicating messages, HR managers in the qualitative stage stated the channels most
effective at reaching employees were not necessarily the best at getting the message
across. When the time and cost constraints of marketing company benefits are taken into
consideration it is clear employers veer towards an information push approach.
However, the quantitative findings also indicate that an information push approach using
channels that reach the maximum number of employees will not maximize awareness and
understanding of the benefits on offer. As a result the importance companies place on
boosting talent retention and motivation through benefits is not fully realized; clearly a
different approach is necessary if employers want to improve benefits take-up and increase
employee engagement with the benefits on offer.

Steps to effective benefits communication

There are a series of steps organizations can take to ensure benefits communication is
working to the best advantage of employees and therefore engaging with people in a
positive way. The following are based on Chartis’ experience of working with a range of
public and private sector clients over the last 50 years:
1. Review your benefits portfolio. Investing time to review your benefits offering is an
essential first step; it is no good investing in and communicating benefits that are out of
date or not relevant to your workforce.

‘‘ . . . the better benefits are communicated, the more staff

appreciate their employer and, even when employees don’t
take up benefits offers, engagement with the organization is
increased. ’’

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VOL. 18 NO. 3 2010 HUMAN RESOURCE MANAGEMENT INTERNATIONAL DIGEST PAGE 11
 ‘‘ When the time and cost constraints of marketing company
benefits are taken into consideration it is clear employers
veer towards an information push approach. ’’

2. Define what you want to say. Once you are confident your benefits portfolio matches the
needs of employees, clarify exactly what you want to say about them and to whom.
Communications need to be focused on the actual benefits as well as their financial and
non-financial value.
3. Ask your provider for assistance. Benefits providers will often offer marketing and
communications material to support your in-house benefits communications. They may
also be willing to develop material that is tailored to your business.
4. Seek help from line managers. Line managers have a unique role to play in
communicating benefits; the direct relationship they have with employees, gives them
the opportunity to speak more openly and build on their already established relationship.
5. Consider a variety of communication channels. In selecting communication channels
organizations should be open to considering and experimenting with a range of
communication methods to find the solution that works best for their people, their
organization and the benefits on offer.
6. Maintain regular communication. This is essential; without it employees will be unaware of
the range of benefits on offer. By communicating proactively, organizations can begin to
build employee engagement and trust, which in turn can impact on talent retention,
motivation and productivity levels.
7. Step back and review what you are doing. This is a key step in the process of offering the
‘‘right’’ benefits and communicating them in the ‘‘right’’ way. This opportunity to refresh
key messages about available benefits will ensure they remain targeted and applicable to
your changing workforce and their evolving needs.

Comment
This is a review of ‘‘Creating engagement through employee benefits’’ by Terry Pegg (2009).
Keywords: This article investigates how benefits can impact on talent retention, motivation and
Benefits, productivity levels, and how organizations are choosing to inform their people about the type
Communications, of benefits on offer. The article is clear and concise, and employs an interesting and
Incentive schemes, readable style. It is of value to employers, HR managers and reward professionals who wish
Employee behaviour to improve their own benefits communications.

Reference
Pegg, T. (2009), ‘‘Creating engagement through employee benefits’’, Strategic HR Review, Vol. 8 No. 2,
pp. 5-12, ISSN 1475 4398.

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