Employers may not feel entirely comfortable investing in attracting and retaining staff at the moment. The level of political uncertainty caused by Brexit paired with concerns for the UK’s economic position is perhaps more conducive to battening down the hatches and waiting out the storm.
Yet the biggest risk for businesses and their growth beyond 2019 is the increasing skills shortage they are facing.[1] To mitigate this issue, which economists expect to get worse in the years to come, it is important that employees feel valued to ensure their continued motivation, productivity and loyalty to the business. A simple way of doing this is by reviewing non-remunerative aspects of their reward package, such as employee benefits.
Meeting employee needs head-on
Employee benefits can help to form an integral part of motivational strategy in the modern workplace. 75 years ago, Abraham Maslow developed the Hierarchy of Needs and Maslow’s model has remained valid for today’s understanding of human motivation, management training, and personal development. Indeed, his ideas concerning the responsibility of employers to provide a workplace environment which encourages and empowers employees to fulfil their own unique potential are as relevant as ever.
The theory that only a high salary will attract and retain employees is a notion that belongs to the past, as employee benefits are now considered an integral part of workplace motivational strategy. One of the main things that can motivate staff is an understanding of how their benefits package works and the real value it has for them outside of the workplace. Employers might offer all sorts of benefits, such as the ability to claim childcare vouchers or a subsidised gym membership, but these will only be of value to certain employees. Therefore, a good benefits package should offer a range of benefits that employees at different stages of their life want and need, or will help to provide them with a better service than they would otherwise get. Not all employers offer benefits, and instead rely upon the fact that their staff will receive a certain level of support from the State.
Enhancing basic levels of support
For example, almost everyone has access to healthcare through the NHS and Statutory Sick Pay (SSP) in the event that they should find themselves unable to work due to illness. However, these only offer a basic level of support, and might leave people unable to meet their financial needs: a claimant of SSP can expect to receive up to £92 per week[2] while the Employee Support Allowance is a maximum of £73 a week for those in the Work-Related Activity group.[3] These amounts would prove extremely difficult to live on, particularly if the claimant was their family’s primary breadwinner. Research from Canada Life Group Insurance found that more than half would be unable to survive on ESA alone.[4]
In contrast, Group Income Protection (GIP) provides cover that can help employees and their families to feel more secure, which is a basic human need as evidenced by Maslow’s Hierarchy of Needs. GIP can also provide practical support. Many policies include support services such as Employee Assistance Programmes (EAPs) which help employees address their emotional and psychological needs, and are what employees say makes them feel like their employer cares about them, too.[5] Value-added services such as this, which offer access to counselling and advice on a wide range of issues, can not only help to speed up a return to work, but in some cases address any problems before they become a cause for absence in the first place. These benefits offer immediate help to employees when they need it, whereas benefits such as workplace pensions cannot be accessed until retirement.
Understanding value outside of pay packages
It is of utmost importance that businesses not only understand the value in offering these benefits but communicate them clearly to their employees to ensure they have a positive impact on staff motivation and productivity. Total reward statements in flexible benefits schemes are a good way to do this, as are benefits calculators. Advisers can prove particularly useful here in helping clients to communicate the value of benefits to their workforce, through presentations and workplace financial education programmes.
It is very easy to fall into the trap of wooing new employees with generous benefits packages and then letting information about them fizzle out. This challenge is shared by insurers, advisers and employers as different employees are likely to access and expect information in different ways. However, some providers now have formal communications programmes in place to make sure the full breadth of benefits packages are being used to their maximum potential.
Highlighting the value of employee benefits helps to convey a simple message: we are looking after you. Staff who use benefits during major changes in their life circumstances are likely to feel happier and more supported, while even those who never need to use them will gain a sense of security from their employer looking out for their wellbeing. This can translate to a more productive, healthy and motivated workforce without breaking the bank.
[1] British Chamber of Commerce, Quarterly Economic Survey January 2018
[2] UK Government, Statutory Sick Pay
[3] UK Government, Employment and Support Allowance
[4] Canada Life Group Insurance Research, June 2016
[5] Canada Life Group Insurance Research, August 2018