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When most organisations spend a whopping 20-30% of their payroll on staff benefits, finance directors in particular could be forgiven for expecting that their reward heads have at least some handle of why they’re spending what they do, and what impact this spend is having.
But a longstanding scandal in employee benefits is that many simply do not. Recent YouGov/Isio data suggests UK employers ‘waste’ around £15bn a year on employee benefits that don’t resonate with their staff – not a statistic those that hold the purse-strings will want to hear.
At Virgin Group - the HQ of the Virgin brand – a company which has long been praised for the perks it offers (it was amongst the first to introduce unlimited holiday more than a decade ago), its gradual process of iterating its benefits had seen it add a plethora of industry-busting staff benefits. This has included everything from its ‘real rest’ (extended office closure) perk over the Christmas break, to uncapped bereavement leave, numerous health and wellbeing initiatives (ranging from private medical and dental care, fertility and reproductive health support), as well as offering a staff digital physiotherapy. Proactive health assessments could also be accessed from day one.
Nikki Humphrey
Chief People Officer, Virgin Group
But around this time last year, Nikki Humphrey, Virgin’s chief people officer, and the rest of her HR team decided that to time had come to pause, take stock, and assess exactly how hard its benefits provision was working. Notably, the HR team wanted to see whether there were perks that could be retired in favour of better ones that would be more inclusive.
“We’d probably reached a point where we’d added lots of new and exciting benefits over time, but we hadn’t taken a step back to see whether – as a whole – they were working for ‘all’ our people,” says Humphrey.
What followed was a thorough investigation of actual provision and take-up, and what followed, says Humphrey, was “stark.”
We’d probably reached a point where we’d added lots of new and exciting benefits over time, but we hadn’t taken a step back to see whether – as a whole – they were working for ‘all’ our people
She says: “When we analysed our own data, we found that 25% of our benefits were taken up by less than 5% of staff. Meanwhile, we had some specific benefits that we felt deserved to be more broadly offered, but were not reaching some people.” She continues: “For instance, we had very well developed parental leave policies, but when we analysed our demographics data, we found that 35% of our people identified as ‘carers’, but we had no formal policies in place for them. This compared to 24% of our people identifying as parents – where we had a number of parent-focused policies.”
According to Humphrey, a “mismatch” had been allowed to creep through. “We also found this to be the case in other benefits, for instance where we appeared to be favouring people with long-service, above those who had only just joined.”
A different approach
Insights thus-gained, the standard approach could have been HR doing its standard gap analysis, to see what was needed, with some later pushing out of new benefits to bridge that gap. But what followed was, according to Humphrey, something she’s never experienced before in her HR career – a decision being taken to actually share these findings with staff themselves, to hear their feedback on the results, and allow them to have some involvement in the development of what should come next.
