Communicating the benefits
Benefits strategies are often misunderstood by employers and workers alike. But good communications could save UK firms £2bn in staff turnover costs. Nic Paton reports.
The modern-day office is awash with high-speed communications - e-mail, intranets, texting, video conferencing and the like. Yet, it is remarkable how often employers and workers still fail to understand each other. Compensation and benefits is no exception to this rule.
Employers are increasingly recognising the importance of the compensation and benefits package; not just in terms of salary, but also pensions and other formerly 'fringe' benefits, such as flexible working, childcare and extra holiday, in attracting and retaining staff. According to a study of 300 organisations by financial services group Momentum, they spend between 10 per cent and 30 per cent on top of their basic payroll on other benefits.
But fewer than one in five believe their workers place a high value on these benefits. Why? The answer, it appears, is communication. In Momentum's employee benefits survey, just 2 per cent of the companies polled felt their communications strategy on compensation and benefits was 'excellent', with the majority of 39 per cent simply rating it as 'satisfactory'.
A poorly-communicated package can lead to staff taking benefits for granted or, worse, not taking them up at all because they don't know what is on offer.
Ninety per cent of the small to medium-sized enterprises and large companies polled by Momentum used passive means of communication - paper or e-mail - to get the message across about their benefits, with many less using more active methods of communication, such as group or one-to-one presentations. Two-thirds used their intranet systems, e-mail or printed benefit statements.
"They know their benefits package helps them to recruit and retain staff, but very few are good at communicating about it," admits Momentum's marketing director, Sharon Mason-Hunter.
In companies that offer low levels of pension contribution (2 per cent or below), staff turnover was 38 per cent higher than in those which spent more on their pensions (10 per cent or above), she adds.
The lowest staff turnover was found among companies that provided an average level of pension contribution, but communicated the worth of this through different channels. Better communications, Momentum estimates, could save UK firms £2bn in staff turnover costs.
The company also says that using six or more mediums to communicate your benefits, both active and passive, could reduce staff turnover by 6.5 per cent. They are:
- Written information in a staff handbook or on a notice board
- On the company intranet or via e-mail
- One-to-one presentations by internal managers and external advisers
- Group presentations by internal managers and external advisers
- Printed benefits statements
- Online benefits statements.
"There is a direct link between how benefits are communicated and staff turnover. Every time you do not communicate well and lose a member of staff, it costs £10,000 on average to hire someone new, so it pays to communicate your benefits," Mason-Smith stresses. "Good communication can increase the take-up of benefits by as much as 50 per cent."
- Look at how you are communicating your benefits. Are you using the best and most efficient ways of getting your message across, and could you use different means, such as the company intranet?
- Draw up a communications strategy, ideally in consultation with your staff. How would they prefer to find out about the comps and bens on offer, and any changes?
- Monitor the take-up of benefits. Are some used more than others? If so, why?
- Examine why staff are leaving. Were comps and bens an issue? What could have made them stay, and can you put it in place to ensure others do not leave?
- Review your communications strategies regularly. Are they making workers feel valued, and therefore more likely to stay, or has the message become stale?
Case study: Pricewaterhousecoopers
