The truth about employee benefits
How do the best companies use benefits to drive growth and performance? What can benefits do for you?
‘People are your most important asset’ is cliche for a reason - when you’re growing a business, the team you build can make or break your success. Suppliers will tell you that benefits are the magic solution to attracting and keeping the best people, but here’s the truth - nobody joins or stays with a company just because of their benefits. Still, benefits can be a powerful tool central to your overall people strategy.
Suppliers will tell you that benefits are the magic solution to attracting and keeping the best people, but here’s the truth - nobody joins or stays with a company just because of their benefits
When designing their rewards and incentives programmes, companies tend to focus almost exclusively on salary and bonus with benefits as an afterthought. So why do benefits go unloved, what are they actually good for, and what's best for your team? Let's dive in.
If benefits are so useful, why do they go unloved?
Short answer - because most benefits programmes stink. Here are some of the reasons why:
- They’re one-size-fits-all. In other words, they don’t cater to your team’s diverse range of needs and tastes. Most benefits packages offer the same things to every person in the company regardless of their personal circumstances. So while Michael, your grad hire, is happy with the yoga class, this doesn’t help your senior finance manager Kate who’s worried about childcare that doesn’t break the bank.
- It’s hard to get people to pay attention. If your benefits don’t work for your team, it’s no surprise they won’t engage with them. On top of that, most traditional core benefits such as health insurance or pension are complex products that you don’t engage with regularly, so explaining to everyone (and every new hire) what they mean and how they help is time-consuming.
- They create a load of extra admin. Each new benefit you add can create a whole new list of things to do: researching what benefits your team wants, speaking with providers, setting them up, getting everyone onboard, organizing payroll adjustments, sorting out tax. That’s another job unto itself.
- They’re expensive. If you’re providing a package that no one uses, you don’t need an economist to tell you that it’s not the best use of budget. If you’re building a custom benefits package for a small team, you can pay much more than you need to. Tax breaks, while clearly advantageous, are complex to navigate which means you’re probably not taking advantage of them.
It’s no surprise then that according to a recent survey by insurance provider Unum, only 1 in 3 employees actually understand and use their company benefits. When UK businesses spend between 5% and 9% of payroll on benefits - billions of pounds every year - it’s time everyone tried a different way.
What can benefits do for you?
Most companies just aren’t taking advantage of benefits as a flexible - and powerful - tool to grow your business. Here are four main ways the best companies use benefits successfully.
1. Shape culture, community, and behaviours
If you create a workplace that your team looks forward to every day, they’re more likely to stick with you in the long run. Research has found that employees have on average 50% higher job satisfaction when they have good relationships with each other at work. So why not encourage your team to bond over weekly lunches, fitness activities, or personal interests?
Tied with shaping culture, benefits are an amazing way to express your values and encourage the behaviours you want to see. If, for example, a core value is Diversity, you could implement flexible working policies to meet the varying needs of a diverse workforce. Or, if one of your values is Continuous Learning, then a budget for professional and personal development will make it easier for your team to get the skills required to contribute even more to your business.
2. Boost productivity and efficiency
We all know that life can get in the way of work sometimes. There’s nothing more gruelling than finishing a full day of work and then having to deal with mundane chores. By making things easier for your team, they can focus on doing their best work for you. Here are just a few of the ways you can use benefits to boost output:
- Simplify daily life: We all have to deal with life admin - and usually a long list of it. The average brit carries over 109 life admin tasks every year - whether it's making appointments, dealing with our finances, booking travel, fixing a technology issue, or shopping for a gift. And the list goes on and on. Time and energy your people don’t need to spend on personal work is time and energy they can dedicate to work work.
- Help people balance caring responsibilities: For the parents in your team, childcare can be a major stress - and a distraction from work. Supporting them could mean a contribution towards childcare costs, a workplace nursery, or extra help during school holidays. Similarly, if they’re a carer for another relative, back-up emergency elder care can be a lifesaver.
- Look after their health and wellbeing: Health and productivity go hand-in-hand, and using benefits to help your team look after themselves can give you much more back in return. This can look very different for each person in your team. Some people might love to keep fit at the gym, so they’d love a subsidized gym membership. For anyone who struggles with mental health, a free or subsidised access to a service like Headspace or in-person counselling can help them unleash their true potential.
3. Build your employer brand
Having a strong employer brand can really make a big difference in the calibre of the candidates you attract, and ultimately hire. Even though benefits aren't the only reason someone would want to join your business, they can be a powerful way to stand out. You can use them to show that you really care about your team, and paint a picture of what life is like there. To really grab a candidate's attention, it’s the exciting aspects of what you offer (i.e. not just healthcare and pensions) that will make the difference.
4. Be good (because it feels good)
People commit a pretty big chunk of their lives to their work - in the UK it’s an average of 3,515 full days over a lifetime. That’s a lot of meetings that could’ve been emails. So when they experience major life events - namely having kids or experiencing a bereavement - you have the power to make things easier for them by letting life come first.
When someone has a child, paid parental leave to bond with their new bundle of joy is the minimum expectation. Companies like Salesforce go the extra mile by offering a ‘take-out’ budget for early parents adapting to a new routine.
If someone suffers a bereavement, allowing them the compassionate leave they need will help them out in the long term too. After all, recognising when some things are more important than work is part of being a great business.
So what’s best for your team?
With all these options laid out, it’s worth having a think about your team’s unique needs (or asking them what they are!). What are the blockers that stop them from working at their best? The best benefits strategy is the one that’s as unique as your team and tailor made for them. With the right choice you’ll get out far more than what you put in - and build your dream team.