BENEFITS HOLD THE KEY TO EMPLOYEE ENGAGEMENT

Written by Steve Watson, Head of Delivery – Defined Contribution

For many, the subject of employee engagement can feel like an esoteric idea, dreamt up at a business school to help management consultants extract more fees. This may sound cynical but it is still a commonly held view of business ideas that seem intangible and theoretical.

However, logic tells us that engaged employees should be more productive than disengaged employees and this “gut feel” has over the years been backed up by research. According to one study, engaged employees are 50% more productive than disengaged employees (Reporting findings of First, Break All the Rules, by Marcus Buckingham and Curt Coffman, 2005).

But as employers go in pursuit of engaging their employees, the reality of the current economic landscape kicks in. Employee numbers are down, with many employees earning less in real terms than a few years ago. At the same time, employers need to achieve increased productivity and efficiency as well as retain talent and motivate. But how do you go about achieving all of this, when chances are, company budgets remain tight?

The good news is that academics will tell you, quite rightly, that pay is purely a hygiene factor – in itself it cannot motivate. So the stage is set for employee benefits to take on the key role of employee engagement and here is how.

Firstly, having the right benefits package is clearly critical.

Employers can make sure they achieve this by asking their employees what benefits they would like to see included. It sounds simple, yet many companies fail to do this. Our experience shows that the introduction of discounts from local suppliers, for example, can be hugely positive. At a time when all employees are looking to get more from their earnings, saving money on regular expenditure in favourite places – from hair salons to restaurants, can be very popular. What is more, these benefits can often cost a company far less than having a national retail discount scheme at a time when cutting the cost of the benefits offered, though not the value, is still likely to be at the top of many companies' agendas.

Benefits that either include some of a company’s own products or services or at the very least support the company’s culture and brand are also likely to be most effective.

Once benefits are in place, it is important to check the success of any changes that have been introduced. This can easily be done via a staff survey.

Next, communication is vital. Effective communication leads to understanding; understanding leads to engagement; engagement leads to having effective benefits. Over the last 12 months, we have seen a growing trend with clients becoming more interested in creating tailored, fully branded, communications within an overall strategy.

As to the form the actual communication should take, increasingly we find that employers are turning to electronic communications and using their intranet site to promote the value of their benefits. That is not to say that more traditional forms of communication have fallen out of favour. 
To be effective, the communication strategy should include a full mix of activity from face-to-face presentations through to posters, handouts and electronic communications.

One-off communications will not be effective either, so it is also important that employers remember to regularly re-communicate the value of the benefits that they offer (including new additions) to their existing employees.

Employers need to remember to put all of the above into practice – neither having the right package without effective communication or good communication without relevant benefits will engage.

The results of research undertaken earlier this year by Employee Benefits magazine confirms all of the above. 71% of employers stated that over the next 12 months improving employee engagement was going to be a top priority with 65% of all employers specifically looking to increase employee appreciation and perception of their benefits package. They planned to do this either through better communication and/or the redesign of their existing benefits to provide the value that employees actually want.

Looking ahead
With hints of a recovery starting to show through, it is critical that companies continue to apply the lessons learned in the tougher economic climate and remember the valuable role employee benefits can play in engaging their employees. The result will be better motivated staff, who are more likely to remain with the company, even as job opportunities increase and we once again witness increased levels of job mobility. This in turn will also reduce the amount employers have to spend on recruitment (and the other costs associated with taking on new staff) and ensure that valuable talent is retained.