Unlocking Employee Engagement and Retention with Strategic Benefits
Unlocking Employee Engagement and Retention with Strategic Benefits
Written by: Paula Antalffy 4-5 minute read
In today’s tight labour market, the pressure to attract and retain talent who are truly dedicated to your business and goals is a critical challenge. One of the tactics used by many businesses in this high-pressure hiring landscape is offering a plethora of rewards and benefits to employees - outside of competitive compensation.
But are these efforts working?
According to the latest "Benefits Design Research 2024" report by the Reward & Employee Benefits Association (REBA), the answer is yes! Employee benefits play an increasingly vital role in supporting broader HR objectives such as recruitment, retention, and employee engagement.
The report, which surveyed 234 organisations representing approximately 1.5 million employees, reveals that nearly 90% of those who measure the impact of their benefits programs report positive outcomes across various metrics, including wellbeing, absenteeism, and diversity, equity, and inclusion (DEI).
Understanding the benefits landscape
The significance of benefits is underscored by the economic pressures and demographic shifts facing organisations. Despite cost challenges, many employers are adjusting their benefits to adapt to changing organisational needs. For instance, over 56% of respondents have committed to strategic projects focusing on benefits communication, while significant investments are also being made in mental wellbeing, financial wellbeing, technology, pensions, and health benefits.
As employees fiercely compete for the top talent, who truly will make a big difference to organisation success, benefits specialists are setting up to support wider HR objectives. These holistic benefits offered not only aid recruitment and retaining but also directly enhance employee engagement and reskill the workforce to drive business success.
The tight labour market exacerbates the need for comprehensive benefits programs. With employers competing fiercely for talent, benefits specialists must step up to support wider strategic HR objectives. The report highlights that benefits not only aid in recruitment and retention but also enhance employee engagement and reskill the workforce to drive business success.
To put it more simply:
today, benefits are a MUST!
About the Research
The research leverages REBA's extensive network, encompassing 4,400 senior reward and benefits practitioners and over 20,000 HR contacts. Conducted through an online survey in January and February 2024, the study gathered insights from a diverse cross-section of employers in the UK, ensuring robust and reliable data that highlights future trends and decision-making patterns in employee rewards and benefits.
Key Findings
The REBA report unveils several critical insights about the current state and future trends of employee benefits programs.
Here are some of the key findings:
Positive Impact of Benefits Programs: Nearly 90% of organisations that measure the impact of their benefits programs report positive outcomes. These benefits include improvements in recruitment, retention, engagement, wellbeing, absenteeism, and diversity, equity, and inclusion (DEI).
Increased Focus on Mental and Financial Wellbeing: Over half (56%) of respondents have initiated strategic projects focused on enhancing benefits communication. These initiatives look to tackle the common issues of employees simply not knowing about or not knowing how to ACCESS benefits. There is also a general shift towards improving employee mental and financial well being through benefits - with lots of investments planned in these areas over the next two years.
Technology and Benefits: Employers are increasingly investing in technology to support benefit programs. More than half of the respondents are planning to upgrade or introduce new employee benefits technology to improve efficiency and engagement.
Core Benefits Remain Strong: The majority of respondents reported that their core benefits offerings, such as pensions, health, and protection, are in good shape. However, they also recognise the need to improve communication and technology related to benefits. This highlights a key gap in the market for businesses looking to create technology-enabled workplace wellness solutions (Learn more about this in part 4!).
Adaptation to Economic Pressures: Despite significant economic pressures, including insurance price inflation and increased national minimum wage rates, only 2% of respondents plan to reduce benefits spending. In contrast, almost 20% anticipate increasing their investment in benefits.
Barriers to Implementing Changes: The report highlights that the key hurdles for changing and upgrading benefits includes issues around budget approval and an inability to demonstrate true return on investment. Over 80% of respondents cite budget approval as a significant barrier for implementing holisting benefits, while about half struggle with demonstrating the business impact of benefits to gain stakeholder consensus.
Commitment to Strategic Transformation: Many employers are committed to large-scale strategic transformation projects when it comes to their team benefits. These include enhancements in financial wellbeing initiatives, mental wellbeing initiatives, health benefits, and benefits technology. This reflects a proactive approach to ever-evolving employee needs.
Part 1: Areas of Change
The first part of Reba’s report, identities several key areas where changes are occurring within employee benefits programs. These areas are crucial for adapting to the evolving needs of the workforce and ensuring benefits align with broader organisational goals. What’s more, today’s tech talent shortage means that employees need to do more than ever to attract and retain top talent.
Health and Wellbeing: Employers are increasingly prioritising health and wellbeing initiatives. This includes mental health support, fitness programs, and comprehensive health insurance plans. For management the focus in these areas often begins with recognising that a holistic approach, which includes a wide array of employee well-being initiatives will have the best impact on wider productivity and engagement.
Financial Wellbeing: There is a growing emphasis on financial wellbeing programs, aimed at helping employees manage their finances better. This includes financial literacy programs, debt management support, and enhanced pension schemes. Employers are investing in these areas to alleviate financial stress and improve overall employee satisfaction.
Benefits Communication: Being able to effectively communicate benefit programs on team members is a critical area of change. Employers are working hard to make sure their employees are aware of what resources are available to them, and also understand the positive impact of these initiatives. This includes management working hard to use clearer messaging and leverage technology to help ensure better reach and understanding.
Technological Integration: Technology is playing a significant role in the evolution of benefits programs. From benefits management platforms to mobile apps that provide instant access to benefits information, employers are investing in tech solutions to streamline behind-the-scenes admin around benefits and enhance overall employee experience.
Diversity, Equity, and Inclusion (DE&I): Today management is working hard to ensure that that DE&I initiatives are being integrated into benefits programs. This is to ensure that the benefits offered are inclusive and equitable. This includes offering benefits that cater to a diverse workforce, such as family-friendly policies, support for different health needs and initiatives that promote a wider culture of inclusion.
Data-Driven Decision Making: Employers are increasingly using data analytics to inform and assess their benefits strategies. By measuring the impact of benefits programs on various HR metrics and setting out key well-being KPIs, management can make more informed decisions around strategic policy changes around benefits and tailor their offerings to better meet employee needs.
These areas of change reflect a dynamic approach to employee benefits, aiming to create more effective, engaging, and supportive programs that contribute to overall business success. As organisations continue to navigate economic pressures and demographic shifts, these changes will be essential for maintaining a competitive edge in today’s tight labour market.
Part 2: Spending Shifts
In order to achieve and focus on the areas of change highlighted in part 1, businesses need to put their money where their mouth is, and begin adjusting their employee benefit spending to meet the needs of the ever evolving workforce. What’s more, businesses need to consider how economic challenges may affect several key areas, where spending shifts are needed.
Here are a few key areas where Reba’s report outlines crucial changes in spending:
Increased Investment in Wellbeing Programs: Employers are directing more resources towards health and wellbeing programs, including mental health support, fitness initiatives, and comprehensive health insurance plans. This trend reflects a wider shift in management attitudes towards employee wellbeing and how it is directly linked in productivity and engagement.
Focus on Financial Wellbeing: Financial wellbeing is another area seeing increased investment. Programs aimed at helping employees manage their finances, such as financial literacy initiatives, debt management support, and enhanced pension schemes, are becoming more prevalent as employers seek to reduce financial stress among their workforce.
Again, this shift reflects the landscape which surrounds businesses. As people face continuous economic uncertainty, due to recession and the cost-of-living crisis, employees place more importance on making smarter and better informed financial decisions.
Enhanced Communication Efforts: Effective communication of benefits programs is critical, and organisations are allocating more funds to improve how they convey the value of benefits to employees. This includes finding ways to leverage technology for better communication and making benefits more easily accessible to employees in their day to day life.
Technological Advancements: Investment in benefits technology is rising, with many organisations adopting new platforms and tools to streamline benefits administration and improve the employee experience. This includes benefits management systems and mobile apps that provide easy access to benefits information.
Innovative solutions for highly personalisable, but easy to adopt systems, such as myday, are making employee benefits management and tracking more simple. (Learn more in part 4!)
Diversity, Equity, and Inclusion (DEI) Initiatives: In recent years lots of focus has been put on DE&I policy making in the workplace. As employers strive to create a more inclusive and equitable workplace - they are looking more at how they can offer benefits which cater to their diverse workforce. This includes implementing policies which support family needs, different health requirements and a wider policy direction which promotes a culture of inclusion.
Data-Driven Decision Making: Organisations are increasingly using data analytics to inform their benefits strategies. By measuring the impact of their programs on various HR metrics, employers can make more informed decisions and tailor their benefits offerings to better meet the needs of their employees.
These spending shifts indicate a strategic approach to employee benefits, focusing on areas that enhance employee wellbeing, financial stability, and inclusivity while leveraging technology and data to drive better outcomes.
Part 3: Measured Impacts
The "Benefits Design Research 2024" report examines the tangible effects of employee benefits programs on various organisational outcomes. This chapter highlights how benefits impact several critical areas, supported by key statistics:
Recruitment and Retention: Comprehensive benefits packages play a crucial role in attracting and retaining top talent. According to the report, 87% of organisations that measure the impact of their benefits programs report positive outcomes in recruitment and retention efforts.
Employee Engagement and Wellbeing: Benefits programs significantly enhance employee engagement and wellbeing. The report finds that 74% of organisations observe increased employee engagement, while 79% note improvements in overall employee wellbeing.
Absenteeism: Effective benefits programs contribute to reductions in absenteeism. The report reveals that 72% of employers see a decrease in absenteeism rates due to health and wellbeing initiatives included in their benefits offerings.
Diversity, Equity, and Inclusion (DEI): Benefits that cater to a diverse workforce promote inclusivity and equity within organisations. The report indicates that 56% of respondents are introducing new DE&I benefits in 2024-2025.
Return on Investment (ROI): Measuring the ROI of benefits programs is crucial. While it can often be difficult to show direct correlation between benefits and increased profits, Reba’s report highlights that 90% of their respondents see a positive impact of mergers and acquisition activity, based on key benefits offerings.
Part 4: Benefits Trends Put Into Action
For businesses looking to stay ahead of the curve, when it comes to having a more holistic approach to benefits, putting the finding of Reba’s report into action is crucial.
So what does this look like?
Take stock of your current benefits: Conduct a thorough analysis of your existing benefits, to better understand what areas of your current policy are working for your business. Consider how each of your existing benefits serve wider goals you have set for your company. For example, if one of your current business goals is to create a more diverse workplace, consider how your existing benefits, and the ways in which they are communicated might be helping or hindering this goal.
Ensure that this stage of your benefits analysis includes direct input from employees - surveys are a great option! By giving employees an anonymous channel to feedback about their thoughts on benefits, you can get more honest and illuminating insights.
Leverage data and analytics: In addition to your own individual assessment of your benefits, it is also important to gather data which backs up where your benefits are helping people and where they might be missing the mark. This will allow you to engage key stakeholders more effectively by having hard evidence of ROI, positive impact on team performance or areas where your business is currently lacking and needs investment.
Enhance communication strategies: One of the biggest challenges highlighted in Reba’s report is the insufficient communication around benefits. This is a huge hindrance for businesses, as it means even money well spent, may be going to waste, on benefits employees don’t know about or don’t know how to access. Leveraging technology to help with these comms, such as a workplace wellbeing app, can help businesses make sure their team knows exactly what benefits are offered to them and how they can be accessed.
Get a handle of your spend and forecasting costs: Benefits managers have faced unique pressure in the past 12-18 months with regards to cut backs in their budgets. While this was a surprise for many reward professionals (and is primarily due to the wider recession landscape) it’s important to consider how these pressures might continue to exist in the future.
Consider how you are able to create a realistic forecast for costs of benefits in the rest of 2024 and into 2025. Think about how unique business cases for each of your policies might help sway key stakeholders and board members to invest in new benefits.
Invest in technology: While the decision to invest in a new wellness platform, or benefits app can have some upfront cost, both in terms of the software subscription and employee training on how to use the app - in the long term, these platforms can offer a plethora of benefits are make policy management a breeze.
Consider a platform like myday, which is an innovative solution for managing all aspects of employee wellbeing, using one single app. The platform takes a multi-pronged approach to employee wellbeing, considering how to make benefits more accessible, more intuitive and more measurable all at once.
You can learn a bit more about myday below.
Say hello to myday!
Myday looks to tackle the challenges of workplace wellbeing all at once. From making benefits more easy accessible and intuitive to users, to allowing easier monitoring of their effectiveness and employee satisfaction - myday offers a highly customisable, easy-to-begin experience.
Here are a few of the ways the app can help you transform your benefits policies:
Policy direction made simple: myday provides businesses with a framework for creating effective benefits. Use the platform's plethora of pre-existing daily wellness challenges, in-app benefits, and resource library to prove a holistic approach to wellbeing for your team.
No more hidden benefits: Make access to benefits simple, with myday’s all-in-one wellbeing platform. Once your team members have access to myday, they never have to wonder where they can find the latest company benefits. No more worrying about how best to communicate the latest company benefits!
Easy to track impact: The app’s Insight tab allows each team member to track their own progress in completing daily wellness challenges, as well as other health metrics, such as step count, screen time and more. This tab is also where management can share surveys with employees to get pulse checks of team sentiment, feedback on changes and more.
KPIs and goal reporting: For management, myday provides a dashboard of insights, which they can use to directly track KPIs and benefit impact. These reports can also be shared with key stakeholders, CXOs and board members.
Building a diverse community: myday’s community features can help employees create inter- and intra-company support groups. These communities are created to help team members bond over shared experiences and support each other as a flexible or hybrid team. These custom groups can be created around shared life experiences or key pillars of identity - such as LGBTQ+, parents with young children, a women’s group, or anything else. These communities help businesses step forward in their DE&I targets by creating truly inclusive places for members of their team to truly feel heard and represented.
Want to learn more about myday and how we can help elevate your wellness strategy to the next level? Book a call with our team today!
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