Benefits that count

In a perfect world, money would be the easiest and best way of compensating employees. “If companies were bottomless pits, money would always be the best reward,” Paul O’Malley, Regional Business Leader at Mercer, says. But the reality is that it can’t all be about the cash – there just isn’t enough to go around anymore. When it comes to real, high-value retention strategies, HR has to look outside the box. A typical compensation package obviously needs to include a comparable salary and also health benefits (see previous feature), but organisations also need to press learning and development and career advancement buttons in their employee value propositions. Rewards and other benefits also offer high-value attraction and retention returns.

Always an issue

These sorts of considerations aren’t just an issue during a talent crunch or economic recovery. As Mark Whately, Director of Benefits, Southest Asia, Towers Watson, says they are the differentiators that help staff to choose between similar cash offers. “Whilst cash is easy to compare and usually ranks highly, employees do consider other benefits in evaluating employee value propositions,” he says. “The challenge for employers is to communicate their benefits programs effectively so that employees are aware of the benefits they receive as well as what those benefits are worth.”

Non-financial rewards certainly have their place – and more and more employers are using them to get that extra bit of mileage out of hard-working staff. Karl Romanoff, a San Francisco-based HR consultant, says these can be used just like gold stars in primary school.

“I really like the idea of a manager having at his or her disposal a stack of sports or theatre tickets, restaurant vouchers, or gift cards to nice stores, and handing them out on the spot when a person does something wonderful,” he says. “I have seen this work extremely well and have used it myself to great effect.”

Whately says flexible benefits schemes – whereby individual employees can choose from a range of possible extras – are also generating great interest from employers in Singapore. This can create significant win-win opportunities for both employers and their staff, particularly when the programme is communicated effectively. “For the company, flexible benefits ensure that the benefits dollar is targeted efficiently,” he says. “When coupled with a well-designed and user-friendly benefits portal, it ensures high levels of employee engagement.”

Romanoff agrees. “Companies should create flexible benefits and rewards systems that allow employees to make choices,” he points out. “Some employees may prefer to get personal training and self-improvement opportunities rather than a cash reward.”

Communicating the benefits

Rewards and benefits that go beyond the standard salary package are certainly useful in attracting and retaining key staff – but only if those workers know and understand the system you have in place. That’s why any focus on these ancillary compensation tools need to be combined with effective communication.

“Regular and effective communication of the benefits plan can go a long way in improving the yield on an employer’s benefit dollar,” Whately says, suggesting a number of ways HR can keep staff in the loop. “Employee awareness sessions, e-mail bulletins and plain-English booklets may be considered. Some employers use total reward statements (showing the dollar-value of each item) to make employees aware of the value of their benefits programs.”

Of course, the best communication is two-way. Having effective avenues for employees to give feedback on reward and benefit systems will give HR the important opportunity to fine-tune those programmes. “Understanding the demographics of your workforce, and seeking feedback from employees as to what benefits they value, is an important first step towards ensuring your benefits program is the best fit for your workforce,” Whately says.

O’Malley suggests employers use focus groups to ensure that HR fully understands what motivates key staff. These need to be more than simple one-off events however. “Just because your employees like something this year doesn’t mean that it will be appropriate or rewarding five years from now,” O’Malley says. “Just like any other area of the company, make annual reviews on how you reward your employees.”

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