Total reward – a cost effective step to better benefits communication
Many organisations are already planning for 2010 and considering how they can achieve maximum impact when it comes to delivering new business, supporting existing clients and ensuring their people are engaged, motivated and ready to start the New Year with a bang.
To help you begin 2010 on the best possible footing Mark Carman, sales and marketing director at Motivano, takes a look at employee benefits and reveals how, by leveraging some simple, cost effective steps, you can make next year’s benefits communication deliver the best for your business.
Communication is undoubtedly the deciding factor between the success and failure of your employee benefits and the key to realising maximum value from them. Not only does clear and effective communication encourage a high level of benefits take-up, but it also creates an appreciation, awareness and understanding of the benefits on offer.
When it comes to cost effective benefits communication one of the most under-utilised tools is the total reward statement. These offer employees instant access to information that shows the total value of their employee benefits and remuneration package. The statements can also enable employees to review a list of benefits that allows them to understand and appreciate the exact value of their combined salary and benefits for the current year. Some companies also use them to highlight the predicted value of benefits for the year ahead.
The best total reward systems take account of the less financial benefits, such as training and development spend. In addition to increasing understanding and awareness of employee benefits, employers can use total reward to further build engagement by using this tool to explain to employees why they might want to take out a benefit such as pension or health insurance, rather than cash, for example.
According to Employee Benefits Research 2009 only 27% of organisations use total reward statements to communicate benefits to staff. This is despite over half reporting a key priority for the next 12 months is communication to increase staff perception of the value of benefits (54%) and communication to increase staff appreciation of the benefits package (50%).
Improving the perceived value of benefits, as well as improving staff engagement levels (reported as an issue shaping UK benefits strategies by 62% of respondents) are themes that run throughout the Employee Benefits study and are supported by Accor Services’ survey of employees. According to their 2008 study only one fifth of employees fully understand the value of their employee benefits and one third does not. The significant number of employees who reportedly don’t understand the value of the benefits available to them certainly seems to make the case for total reward much stronger.
So, what are the key issues you should consider when introducing total reward to your organisation?
- Take the opportunity to review your benefits offering. Use the opportunity presented by the consideration or introduction of total reward to talk with your employees about the type of support and benefits they would like to see. Do you cater for all segments of the workforce? Can you do more to cater for and engage particular groups and individuals?
- Introduce total reward gradually. You can start by initially listing employee’s pay and benefits, attaching a monetary value to as many of the items listed as possible. Once the concept of total reward has started to be accepted within the business you can begin to introduce the less tangible elements of individuals’ jobs to the statements. For example on-site car parking, learning and development, conference and events attended, subsidised catering services and employee assistance programmes.
- Plan your communication carefully. Often the most successful approach is to communicate ‘little and often’ when it comes to helping people get the most from total reward. Alongside the statement itself, think about how you can get maximum value from the benefits you offer by launching a specific campaign for childcare vouchers or your employee assistance service, for example.
- Invest resources to measure the impact of total reward. Surveys and focus groups among your employees can help you to benchmark and review the benefits available to them and the value they place on them. The data you gather here will help ensure you’re offering the right package and that total reward is making a positive difference to your people and the organisation as a whole.
Helping your people to understand the total value of the remuneration and employment package you offer them can not only help to increase engagement levels but it can also contribute to increased levels of retention, reductions in absenteeism and overall productivity improvements. Whilst there is no ‘one size fits all’ solution for total reward, the principle behind it – as well as the potential business impact – remains the same for every organisation.
