According to Gallagher's Benefits Strategy & Benchmarking Survey, 45 percent of HR practitioners are planning changes to current benefit offerings amid a highly competitive labor market. The survey shows an increasing number of organizations are fully aware of the measurable impact that benefits have on employee engagement and productivity.
Among HR practitioners planning changes, 72 percent are seeking to enhance benefits, thereby improving their employer brand and becoming more competitive in recruitment. The second most popular planned change is improving flexibility in benefits, with 47 percent attempting to bolster flexible options to extend individual choice.
"While cost is always central to business performance, we are seeing a shift in the market as employers are having to compete for talent in a very diverse workforce," said Leslie Lemenager, President of Gallagher's International Employee Benefits Consulting and Brokerage. "The fact that 47 percent of organizations are aiming to enhance flexibility in benefits provisions — despite cost management being their biggest challenge — points to a strong recognition that there is a need to go above and beyond to attract and retain talent."
Employers don’t know where they stand. Part of the difficulty organizations have in forging a distinct employer brand stems from not knowing where they stand: understanding position against the market was the third-most commonly cited challenge to benefit offerings. Consequently, most organizations do not recognize their competitive position as employers. More than half of respondents (52 percent) report that it is difficult to adequately benchmark their benefits offering against the market — a problem that data and insights can help address.
Adding flexible benefits. Flexible working has been gaining traction as an important part of benefit packages, thanks to its measurable impact on employees' physical and emotional wellbeing, as well as motivation. Employers have been largely receptive to flexible working: 91 percent offer part-time work or shorter hours, and 69 percent allow workers to personalize their hours within certain parameters.
However, organizations are restrained in their approaches to other types of flexible working, despite an increasingly diverse workforce needing more than a single, one-size-fits-all policy. For instance, only one in five organizations allow employees to customize their individual benefit packages, and customization is available for only a few benefits, such as contribution levels to retirement savings plans. Indeed, most employers struggle to offer benefits with breadth as diverse as their employees: benefits that appeal to a diverse workforce — comprising individuals with different preferences — is the second-most commonly cited obstacle to sufficient benefits provision, with two-thirds (66 percent) of HR professionals identifying it as a major challenge.
As a result, organizations should strive for a holistic approach to benefits flexibility, which can elevate their employer brand and improve recruitment. However, a surprisingly high 52 percent of organizations do not allow employees to work from home (i.e., teleworking or telecommuting). Furthermore, other benefits that suit a diverse workforce are uncommon: only 43 percent offer a condensed working week; just 24 percent offer agile working; and a scant 14 percent offer term-time only working. If organizations wish to set themselves apart, flexible benefits and flexible work are excellent places to begin.
Ineffective communication is barrier to success. Despite the need to communicate the availability and value of benefits to employees, most respondents do not consider benefits communications a priority. Whilst there is significant investment in delivery methods, communications channels dedicated to benefits are less common. In fact, more than one-third of organizations (36 percent) identified communications as a barrier to effective benefits, making it the fourth-most commonly cited challenge.
The survey found 84 percent of organizations do not use total reward statements to communicate the value of their benefits package. Such communication tools provide a single, succinct and practical source of information that improves employee appreciation for the real value of benefits and elevates the employer brand.
Of those using total reward statements, 77 percent send these communications digitally; such organizations recognize that whilst it may be tempting to cut corners with communication costs, digital interfaces provide an easy, cost-effective, and sustainable solution to improve how they discuss organizational wellbeing.