Adrian Peacock, Managing Director of Alexander Forbes Offshore, gives a mini masterclass in employee benefits.
If you’re sitting back assuming your employee benefits are sussed, or you don’t yet provide any, it may be worthwhile taking a closer look at the reality of the situation. “Employee benefits” is a term that gets thrown around, and indeed it is one of the most important concepts on which modern businesses should focus. And yet, their true value and, therefore, raison d’être might get lost in the hurly-burly of work-life.
Organisations which agonise over every aspect of their very existence, and budget, can sleepwalk through employee benefits. Some employees are no better. I regularly see intelligent and highly capable individuals who bend over backwards to meet their clients’ needs but ask them their own plan and they look sheepishly blank.
Here, then, is a mini masterclass in employee benefits in six easy steps, each of which is important to comprehend and to act upon.
1. The goal
The purpose of employee benefits is to safeguard your business by looking after arguably your most precious and expensive resource – your employees.
The objectives are to:
That’s the plan. “Simples!” Or is it? Incidentally, it’s worth checking whether your current employee benefit provider practises what they preach. I wouldn’t do business with anyone who did not subscribe to the value of their own services, would you?
2. The planning
When it comes to implementing an employee benefit plan, the most effective tool isn’t necessarily money but time. Time to: devise, communicate and review. There is no value in providing benefits if they do not help you achieve your goal.
I often ask Jersey employees what benefits they receive, and most will shrug their shoulders and say, “I’m not sure” or “the usual stuff”. Too often, I encounter businesses haemorrhaging costs on benefits that may have little or no impact on employee engagement. Game over. Time to start afresh.
3. The offering
Start by keeping it relevant – highly relevant. That way, benefits speak for themselves. Choosing what your employees value is the key. Way back – think Downton Abbey – housing and half-day holidays to the seaside were prized.
What’s happened since is a history of social economics: the core of life insurance, pension and income protection, and holiday trading was supplemented in the 1980s with flexible benefits where employees select benefits to match their health, family and career wants and needs. Voluntary benefits add another dimension: the employer provides the framework; the employee personally pays. Win-win.
4. Meaningful consultation
The value of a given benefit may not be immediately obvious to employees. Mention pension planning to employees under 30, and typically their eyes glaze over. Thinking beyond immediate gratification is not modern society’s strong point.
Similarly, the utility of personal health insurance or critical illness to those in rude health is not obvious. Placing your benefit scheme on your intranet is great but more can and should be done. Present it.
Educating your employees both in raising awareness and financial services is not only helpful but essential. Explain what a benefit is, why it matters and, where it’s optional, whether they should and how they can change it.
At the very least, shout about it by enclosing a total reward statement with their annual payslip. State each benefit in monetary terms, where possible – this fuller picture is a valuable engagement tool and helps provide the right message; feedback we receive from employees endorses this view.
5. Employee engagement
Better still, consider dropping the paternalistic approach of telling employees what’s on offer. Nurture a collaborative atmosphere and create opportunities where employees genuinely feel their suggestions result in action. Involve them in the design and delivery of your benefits. Consider flexible benefits: asking an employee to shop for themselves automatically engages them.
If it can be done at a regulatory level, it can also be done in your workplace. Compulsory annuity purchase constraints, for example, have given way to more flexible retirement options – even if the employee is still in service.
6. And finally, keep it under review
The needs of businesses and employees are never static. Regularly monitor and adjust your employee benefit offering as both your business and employees change. Discard the old and grasp the new. The latest benefit phenomenon is “eldercare” – provision for one’s dotage. Who knows whether that will make it over the water to Jersey?
You can never see the future but you can plan for it – that’s the point. For more information on corporate employee benefits and flexible benefits, contact Alexander Forbes Offshore at email@example.com or call 01534 837837.