Pay versus benefits  

The importance of a strong reward and benefits strategy is fast becoming a key area for many businesses in attracting and retaining top talent. Employers are recognising that retention is essential when it comes to cost saving because recruitment is often expensive. Additionally, the cost-of-living crisis has had a huge impact on many employees, so if businesses can provide a strong reward and benefits packages but aren’t necessarily able to offer high salaries in their market, they can still attract the top talent. 

The value of benefits

Many companies are restricted by budget and can’t afford to increase salary or manage the associated-on costs of these, such as employer National Insurance contributions and pensions. They are looking to cut costs and save money in the long term and retain that important talent. These employers then start to look for alternatives, but what can this look like? 

One way would be to introduce a rewarding and engaging employee benefits package that has something for all – a true diversity, equity and inclusion benefit package.

According to research by corporate gift organisation Adler, two-thirds (66%) of employees in the UK believe that the employee benefits offered to them are equal to or more important than their basic salary. Employee benefits statistics show that benefits increase loyalty:

• 75% of employees reported they’re more likely to stay with their employer because of their benefit programme (Willis Towers Watson)
• 80% of employees would choose additional benefits over a pay raise (Harvard Business Review)
• 69% of employees report that they might choose one job over another if it offered better benefits (One Medical).

The statistics also show that employees who have and use a rewarding and engaging employee benefits package are less likely to switch employer because they might not get the same benefits at another company.

Unfortunately, not all companies have the resources to improve employee satisfaction, however businesses of all sizes can introduce employee benefits which go a long way to not only increase loyalty but create a working environment that employees enjoy working in.

Popular provisions

An enjoyable working environment aided by an employee benefits offering could not only improve retention but could also make your company a more attractive for new recruits.

There have been several statistics that show employee benefits like the cycle to work schemes are popular. There has also been a move toward the emergence of flexible benefits and giving employees choice over which ones they want to make use of. Some of these benefits could be: 

• flexible working
• discounts in shops and cinemas
• inclusive health and medical perks such as virtual GP, wellbeing vouchers, or gym memberships
• employee “green” car schemes
• meal vouchers, such as Taste Card
• generous pension schemes
• Employee Assistance Programmes 
• health assessments 
• salary sacrifice arrangement, such as cycle to work
• Christmas clubs
• Any day payday, such as early pay which allows employees to draw down on earned income
• birthday off work
• travel loans

Financial support

One benefit rising in popularity is Earned Wage Access or, as I call it, ‘Any Day Pay Day’, which allows rapid draw-down of wages, rather than traditional methods. By having a robust reward and benefits strategy that supports employees to be financially resilient, this not only complements traditional pay schedules, but it can also work in tandem with more immediate forms of pay withdrawal. Also, it gives business insight of the financial situation of their employees and if any extra support is needed.

Part of any reward and benefit strategy should include steps to support employees with financial wellbeing and literacy. This can help employers by reducing stress on workforces, and it can help maximise the reward and benefit strategy by putting it front and centre of employees’ minds, encouraging uptake and engagement. Making life easier for them will hopefully have the effect of improving their work experience, retaining talent for longer and creating a positive effect when recruiting.

Other considerations

By implementing a reward and benefit strategy can have a wider impact on the company culture as well, creating a sense of ‘giving back’ to employees beyond just salary or bonuses.

If you decide to introduce a benefit package you need to understand how different benefits appeal to your employees. You’ll need to consider your existing employee profile and take account of how this may change in line with your business objectives.  

Care must be taken when creating a benefits package that is too focused on one type of employee or age demographic. This can contribute towards a lack of inclusion in your overall offering. 

Benefits can be exciting to employees but costly to businesses. Finding a balance between high investment benefits, such as pensions and private healthcare, and high value / lower cost benefits, such as training and development, career conversations, instant discounts and flexible working conditions will create a benefits package that meets objectives without creating financial pressure on the business.  

However, a company can have the most amazing rewards and benefits package, but if employees can’t easily use or access it or know they are available to them then this strategy can be negated. Reward and benefit platforms need to be straightforward to use and understand. Having an app is also a benefit, enabling employees to obtain those instant discounts when they are shopping. The platform should not have employees having to jump through hoops and a number of clicks to access the benefits. Ease of access to rewards and benefits has the potential to be a strong tool when attracting talent.

Weekly newsletters, payslips, team meetings and pay portals may provide useful spaces to communicate messaging about rewards and benefits that employees may have missed. Also a good idea would be to highlight key benefits, such as pensions when it is pension awareness week, or a dental benefit and how teeth can be affected during the menopause.

Once the benefits package is in place, it’s important to monitor the value they deliver to employees and whether employees understand the benefits available to them. Producing an annual total reward statement highlights the benefits to employees as it shows them what they have had and what they are missing out on. 

For industries with skills shortages or limited pools of highly skilled candidates, a reward and benefits strategy that has been developed with all employees in mind can make a significant difference in attracting and retaining talent. Developing a strategy with input from employees is a highly effective way of creating something that is useful to staff, which will likely improve uptake and promote the prevalence of rewards and benefits throughout a company, going beyond onboarding to become part of day to day pay and rewards information.