Once upon a time, a pension and health insurance was sufficient bait to catch a big fish. Things have changed now: there are more anglers with tastier bait and the fish are more discerning.
As recently as ten years ago, a good pension scheme and life/health insurance cover alone might have been regarded as a standard and attractive employee benefits package but that’s a pretty low bar now. Increased urbanisation, economic growth and the requirement for work forces with specific skill sets in specific locations around the globe has shaped the landscape of the working economy and with it employee benefits.
A change in the tides…
Legislation has played an integral part in shaping what one now considers to be an attractive benefit vs a basic part of a salary package. For example auto enrollment in countries such as the UK and Australia has meant that while previously a good pension scheme would have turned heads, it’s now less of a differentiating factor – every company must now offer a pension scheme.
And again, largely as a response to the recognised importance of retaining female employees across different countries, legislation has led to an improvement in the working lives of parents, initially in relation to maternity leave and childcare vouchers but increasingly also embracing paternity leave.
There’s been considerable discussion on the changes in the working economy and how stereotypical and historical norms are being broken. Working patterns are being characterised by individuals choosing to work on a freelance basis, rather than necessarily progressing their careers through the corporate world, working part time or preferring to have multiple jobs. Employees are also more mobile, building portfolio careers – changing employers every few years.
And then some workers in the traditional/ corporate work space are just itching to leave. Millennials, who account for around 50% of the workforce at the moment, are a generation seeking to be successful quickly and need clear career progression – they’re ambitious and extremely mobile. Employers who want to tap into this pool of talent need to understand what makes them tick and offer specifically appealing and relevant benefit structures to an employee base unlikely to want to tie themselves into long term commitments.
So what can fishers do to attract, engage and retain the best?
As competition for talent across industries becomes even fiercer, employers have to try even harder to ‘up’ their game with the right bait if they want the best catches.
Source: Deloitte Millennial Survey 2016
Attracting talent is one thing, but engaging and retaining them is a different game. It’s often said that a stress-free and happy environment is key to a productive workforce. We see employers tempting employees with gym memberships, free yoga classes and luxury spa days. Technology and highly innovative organisations have gone further with onsite game-rooms and bowling alleys. More than ever before, employee benefits have now become a badge of the company’s creativity and brand image.
Technology, unsurprisingly, is also playing its part in changing employee benefits. Simple, user friendly and interactive Apps are coming to market which cater to modern well-being trends, allowing employees to rate their mood, record personal stressors , communicating data ‘real time’ with employers.
As a result, what used to be a few words in an employee handbook has become a long menu of ever- increasingly innovative and in some cases ‘niche’ benefits, especially in the high-tech sectors (for instance Facebook offers the opportunity for female employees to freeze their eggs; Netflix offers unlimited leave) where the employee benefits programs are regarded as a strong reflection of the organisation’s brand positioning in the marketplace.
Whilst non-financial employee benefits will get heads turning, I question whether they are enough to sustain long term relationships. We want to love what we do but let’s remember that every individual wants to be financially stable. As working lives become longer and responsibility to fund ones retirement falls back squarely on employer’s shoulders perhaps it is not surprising that we should observe a circle back to the very familiar pension schemes and health insurance.
A research survey of 1197 UK employees conducted by Willis PMI Group (2016) found contributory pension schemes ranked one of the top three most valued employee benefits among 54% of respondents. A further 40% of respondents (3% rise from 2015) ranked health insurance in their top three most valued benefits and 32% ranked health screening (7% rise from 2015) in their top choices.
Innovation is certainly paving a new way in the world of employee engagement and benefit. Technology offers the opportunity for customisable employee benefits: a future in which employers can offer a seemingly limitless menu of self-select options, perhaps a way that will be enticing enough for our tech-savvy millennials who want benefits to deliver solutions to individual needs.
The question one has to ask is: how will employers continue to afford to improve and expand their employee benefits and when will they stop to take a rain-check on their R.O.I?