Employee benefits have traditionally been the domain of the HR team, but pay freezes and increasing financial pressures in recent years have pushed them up the Financial Director's agenda. When the HR and finance departments do communicate, the value of employee benefits as part of a staff recruitment and retention strategy, becomes obvious.
It makes sense that a happy, healthy workforce is a productive one. But, just offering great benefits such as private medical insurance, gym membership or Income Protection without employees being aware of it doesn't promote wellbeing and financial security at work. You need to communicate them effectively to staff to see a real return on investment.
This communication must be two-fold. It means both telling staff what employee benefits are actually available to them, and explaining what they mean. For example, 30% of us are likely to be on long-term sick leave during our working lives. However, Income Protection isn't generally well understood by the average employee and, as a result, may not be valued. But if explained, Income Protection is usually very attractive to staff because it offers a financial back-up plan if they go on long-term sick leave and are unable to work.
Yet many businesses are falling at this hurdle. Recent research from Cass Business School, part of City University, showed that 64% of businesses that offer a wide range of benefits fail to tell staff about them, and so aren't getting a return on their (not insignificant) investment.
We commissioned this research, 'Money Talks: Communicating Employee Benefits', to see whether there was a positive impact on the bottom line of communicating with staff about benefits. It showed that offering the benefits, but failing to tell staff about them, was no better than not offering them in the first place.
The 'communications chasm' between what employers offer and what employees think they are entitled to, drives up sickness absence rates and staff turnover, costing a typical business with 1,000 employees £470,000 more than a business with similar benefits that has good communications practices in place. And the 'chasm' exists for managers as well as non-managers.
There's a belief that if employees are aware of benefits, they are likely to take more time off sick. Cass' research shows this couldn't be further from reality. Communicating about a wide range of employee benefits actually builds employee engagement and a more loyal workforce that takes less time off sick.
In an earlier blogpost, I discussed how employee benefits had failed to keep pace with the demographic changes within the workforce. Today's workforce is older and includes more women, and disabled, but employee benefits don't reflect the needs of these groups.
With this in mind, I think the time is ripe to take a fresh look at the benefits on offer - and how you tell staff about them. A good benefits package, communicated well, can help to manage - and reduce - bottom line costs, and can help to build a more loyal and productive workforce.