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The benefits of benefits


Businesses are having to work harder to attract and retain key talent and they’re doing this through the curation of benefits packages…

Words by Kieran Howells | Design by Theo Griffin

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In the current candidate driven recruitment climate, employers are having to curate a far more attractive workplace package to entice top talent. For many businesses, this emphasis on work-life experience has prompted a complete rethink of the way in which workers are considered in the office. Whereas traditionally businesses may have simply inflated wages for those who were considered valued talent, employment analysis has revealed that this technique simply doesn’t aide in retention.

A recent study by Office Vibe found that 80% of employees would prefer new or additional benefits over a payrise; when the talent pool is narrowed to consider just Millennials, that number goes up to 90%. Why? Because what the aforementioned restructure of talent retention ascertained is that more than ever, workers gauge the sustainability of their position based on their happiness and experience in the workplace, rather than simply on whether they’re accruing more money.

However, perhaps companies don’t have a grasp on what their employees are looking for, as 39% of professionals feel unappreciated in their business with 775 workers reporting that they would work harder if they felt better recognised, according to The Balance Careers. It’s no surprise that the firm’s data also found that 51% of the UK workforce will seek to change jobs within the next 12 months. Considering that Oxford Economics believes that replacing an employee costs an average of £25,000 per person, that’s a massive cost for business.

Benefits stats

Yet whilst employees undoubtedly seek out jobs with good benefits, do they actually aide in retention rates? Emma Sims, Group Rewards & Benefits Manager at online fashion retailer Boohoo, says that they do, because brand incentivises their implementation. “It’s very important to us that employees understand their impact on the business so everything we do drives the performance of the business, drives the share price and therefore has a direct impact on their pockets. They have to be with a company for a given period of time, in order to benefit from that, but that’s our retention tool as well. But it does change people’s attitudes towards things,” she adds.

Understanding the relationship between incentive schemes and retention isn’t a new concept for many bosses; DCR Strategies research found that 90% of business leaders believe that an engagement strategy could improve their business, yet only 25% of them actually have a strategy in place, despite the fact that just a five per cent increase in employee retention can generate a 25% to 85% increase in profitability, depending on sector and size. This may be because businesses simply aren’t sure how to go about implementing an effective strategy.

Sims adds that at Boohoo, the selection of benefits wasn’t a short road. “We’ve got seven brands under our umbrella and what we’re trying to do at the moment is harmonise our rewards strategy across the group and look at the demographics we have to make sure the benefits we have are the right ones,” she tells HR Grapevine.

 
 

The heart of employee retention is an excellent experience between an employee and their manager, with a high level of engagement

The ‘human’ element
Whilst the traditional view of employee benefits may be personal days, yoga classes, gym memberships and maybe even the odd breakout room pool table, many leaders are failing to realise the importance of the ‘human’ element, which plays a massive part in retention. As Donna Miller, European HR Director for Enterprise Holdings states, workers don’t just want a free lunch, they want the validation from their leaders for their hard work. When this is achieved, it pays off massively.

“The heart of employee retention is an excellent experience between an employee and their manager, with a high level of engagement,” Miller states. “Employees need to feel that their manager is their advocate, even if they don’t interact with them on a daily basis. This means the employee sees that the manager is thinking about development opportunities at all times,” she concludes.

The heart of employee retention is an excellent experience between an employee and their manager, with a high level of engagement

This view is shared by Andrew Stephenson, Group People Director at online car retailer Lookers, who believes that the benefits his company offers has to be representative of a positive culture to attract new talent. “Benefits are vital to our employee proposition. Around three years ago we increased ours to provide competitive advantage particularly when attracting people from outside our industry. We increased holidays that rise to seven weeks with length of service, improved our maternity leave to twelve months paid and added critical illness cover for all,” says Stephenson.

“In that time, we have improved engagement, lowered attrition and succeeded in widening our talent pool. There is no doubt benefits provide a key pillar of our improvements.”

As Stephenson highlights, ensuring that benefits revolve around employee experience has a dramatic impact on output. Businesses that couple a strong benefits package with higher-than-average levels of engagement achieve on average 27% higher profits, 50% higher sales, 50% higher customer loyalty levels and 38% above average productivity.

 

What are the most effective methods to retain staff?
Google founders Larry Page and Sergey Brin have been vocal about the comprehensive benefits package that they offer their employees (or Googlers, as they call them). The pair told Business Insider that they believe benefits should, "save employees considerable time and improve their health and productivity.” However, Google HR Director Laszlo Block stated in his book Work Rules! that he found most employees actually request relatively inexpensive perks, which mainly focus on wellness. “Most people assume Google spends a fortune doing special things for our employees. Aside from our cafes and shuttles, we don't," he wrote. Amongst Google’s top-ranking benefits include: culture clubs, take your child to work days, employee resource groups, random lunches and talks by business leaders.

There is no doubt benefits provide a key pillar of our improvements

Yet as Boohoo’s Sims points out, there’s no blanket benefits package that appeals to all employees. Sector, location, work environment and diversity all have their part to play in necessitating a unique approach. However, some perks are statistically more likely to attract and retain staff than others. For example, employers that focus on work-life balance benefits such as reward days, flexible working patterns and remote working opportunities are 10% more likely to retain staff over those that don’t, according to data analysed by employee engagement platform TINYpulse.

There is no doubt benefits provide a key pillar of our improvements


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