Incentives, perks and discounts can do a lot for employee morale ... as long as staff know they are on offer. Lynnette Hoffman reports
Incentives, perks and discounts can do a lot for employee morale ... as long as staff know they are on offer. Lynnette Hoffman reports
When it comes to employee benefits, there has always been a disparity between what staff are offered, and what they actually want. It’s a busy world out there, and new research shows employees are attracted to the sorts of benefits that help them manage and cope in it.
Discounted health insurance, home loans and financial advice topped a list of non-super benefits employees most desired, according to a 2005 survey by Mercer. The research found that employees value flexible benefits that help them outside the workplace, but by and large employers are focusing their energies, and their dollars, on other, less sought after benefits such as company cars and assistance with education expenses, which were ranked much lower by staff. The study also found that outside super, employees had little idea which benefits, including the ones they rated most highly, were offered by the company.
What’s the point?
Mercer’s research found that while many employers still view benefits as a way to attract new staff, there’s a growing trend toward the view that benefits are actually more about keeping existing employees happy and upbeat and creating a positive working atmosphere. Companies such as Vodafone and Dun & Bradstreet (D&B), a marketing and credit company, are ringing the changes.
“Employee benefits have been more about staying competitive than attracting or retaining employees,”says D&B’s director of organisational development Padam Chirmuley. Indeed, despite a relatively small budgets benefit, the company has actively focused on providing a number of wealth-management benefits. Along with an employee assistance program and salary packaging, which some 80 per cent of companies now offer, D&B has teamed with Westpac to offer discounted home loans, credit cards with lower fees and interest rates, and personal loans with no establishment fees and competitive rates.
D&B has also partnered with AMP to offer more than 50 investment choices, access to financial planning advice, a range of special offers and educational workshops and online information in an effort to help staff manage their personal finances. Corporate health insurance packages are offered through MBF, together with regular information sessions, and health information and deals throughout the year.
“The point is simply trying to maximise the employee experience,” Chirmuley says. “We don’t use benefits as an attraction. It’s much more about making sure employees don’t miss out.”
Vodafone also places its emphasis on improving the quality of life of its staff, fostering “a holistic approach to work and lifestyle”. As well as providing retail discounts and perks such as free massages, health and wellness checks and personal care packages, the company offers incentives to join the MBF health fund. Access to several wealth management programs is also available. A free initial consultation and discounted professional advice from Mercer Services covers practicalities such as how to help keep mortgage, superannuation, savings and insurance under control.
Employees are also awarded 350 shares in the company, a move specifically designed to foster a sense of ownership and a feeling that “we’re all in this together”, says Wendy Lenton, Vodafone director of people and brand.
“The theory is that if you care for your people, your people will care for you, but if people feel unappreciated or unhappy at work, the anxiety manifests into ill health, low motivation, low productivity and absenteeism,” she says.
But that’s not the only goal Vodafone has for its benefits program. “We’re trying to attract a certain kind of person in the first place. You’ve got to fit in with the culture,” Lenton says. “What Vodafone does is uses benefits to differentiate the employment offer. Every touch point needs to align with our values and culture, and one of our goals is to make the ranking of the top 10 best places to work.”
You’re offering the benefits, but no one’s taking them up
One of the biggest issues human resource managers face is employees’ failure to utilise the benefits offered. But that may be because they don’t know what is on offer. A major part of the problem is lack of communication. The majority of employers in Mercer’s research say they don’t actively promote their employee benefit program at all. And few use any sort of formal evaluation method to get a better understanding of what benefits employees actually value: 70 per cent of employers rely on anecdotal feedback through informal discussions, while 65 per cent also get their feedback about what staff are looking for from recruitment and exit interviews.
Just two out of five employers use surveys or focus groups, the research found, and even fewer monitor usage rates or measure the impact their benefits have on productivity, employee turnover and absence statistics. Only one in five employers says it actively markets its benefits program to all employees (though some say they do make sure new employees are aware of the benefits on offer, but don’t make the same sort of effort for existing employees).
Even those employers who do make a substantial effort say communicating the benefits can be a frustrating process. Despite using everything from the company’s intranet to internal newsletters and emails from providers themselves, many of D&B’s employees still don’t realise what’s being offered, Chirmuley says. The instantaneous attraction of email means it’s also easy to delete and ignore. “People are taking most of these things in dribs and drabs,” he says. “There’s a smattering of interest across all the areas.”
Feedback for educational seminars and workshops that are included in induction has been positive, with staff saying the information has been useful and productive, but take-ups for other offerings, such as health insurance, have not been high, most likely because staff are generally fit and under 30, he says.
At Vodafone, Lenton says the HR team has increased usage by making things as easy as possible for staff. So while many companies offer options where staff can donate a percentage of their payroll to charity, at Vodafone employees can simply send an email or a make a phone call and it will be all set up for them, she says. “It makes a little more work for payroll, but it makes it really easy for staff to do and that’s why our programs work.”
Getting the message out
“The key challenge is trying to get the message out there and look for innovative ways to communicate with employers and leverage off suppliers,” Chirmuley says. D&B now incorporates MBF and AMP into their induction processes so all new employees are aware of the benefits they can access through those companies. They are hoping to do the same with Westpac, but success isn’t easily achieved. When the company arranged for a financial planner to come to its Melbourne office for fortnightly consultations, the first of which was free, the relatively young, call-centre-based workforce just wasn’t interested.
“Financial planning was not really that important to them… so the financial planner was just sitting around for two hours and it was not really worth his while,” he says.
Vodafone says communication has been less of a problem, and that there has been high involvement in many of its programs, in part because it is offering the sorts of things its employees want, and partly because it is using more effective means of communication. Rather than sending an onslaught of emails, for instance, the company limits it to a daily, quick-read newsletter called The Daily Dose.
Another way Vodafone spreads the word about new initiatives is through a monthly no-PowerPoints-allowed meeting dubbed “The Fatt”, where any announcements or new programs or policies are introduced to the entire staff. It’s all interactive and creative, with little quizzes and handouts, in a casual atmosphere so people pay attention and remember.
Getting out more than you put in
Both D&B and Vodafone say the benefits they’re providing are worth the effort. D&B’s benefits program is operating at zero financial cost, Chirmuley says, so even if take-up is not as high as he might like, it’s still worthwhile to provide the options for the employees that do want them, he says. The company makes it work by leveraging off the suppliers, and so far it is content with the results, although “we can always be doing better”, Chirmuley says.
Though not completely free, Lenton says Vodafone’s benefits program also reaps far more rewards than it costs. “We use a low-cost model and we don’t dress it up,” Lenton says.
“The biggest benefit is discretionary effort. The more engaged our employees are, the higher performing the company will be, and our tenure and traction have both been very good.” Part of the company’s success in this area has been its focus on regularly reviewing all of its programs, she says. Last year parental leave was increased from six weeks to three months, for example, and the benefits have been huge, with a 96 per cent return rate.
