Perhaps twenty years ago an organisation could lure in a prospective employee with the offer of a good salary and little more. However, the employment market has changed dramatically and businesses now need to offer an attractive employee value proposition (EVP) to recruit and retain the talent they’re seeking. So how has the benefits market changed and what do HR teams need to know?
Today’s workforce is more demanding and has higher expectations of an employer than ever before. As the economy continues to improve, professionals will have more opportunities and without an impressive EVP offering, their heads could be easily turned. But providing a good salary alone isn’t the powerful recruitment tool it used to be. The modern professional wants a balance of financial reward, flexibility and relevant benefits tailored to them. A ‘one size fits all’ package isn’t enough anymore and businesses have to be more versatile with their benefit offerings.
The real rise in the use of benefits in place of financial compensation came about during the global recession. Many organisations found they couldn’t match the salaries on offer from their competitors and looked to source more creative methods for attracting and retaining top talent. This has since extended from traditional ‘core’ benefits such as pensions and holiday allowance to more flexible options like gym membership, childcare discounts and retail/leisure vouchers amongst others.
As the economy improves companies need to realise that benefits packages can be used as a retention method and simply providing one overriding incentive schemes for your entire organisation isn’t a sustainable solution. Without proper management of the employee benefits system, employers could even risk pushing their staff away. So, for example, a professional who has no children, or doesn’t plan to have any, will gain nothing from receiving child care vouchers as part of their benefits plan. They could even start to think they work for a business that doesn’t value or appreciate them as an individual if continually offered unsuitable benefits from their employer. Every employee is different and will be motivated by different incentives and organisations would do well to remember this and tailor their EVP accordingly.
Encouragingly, though, a study has found that almost 70% of organisations surveyed last year adopted flexible benefits strategies in an effort to improve employee engagement, up from 62% in 2012. This continued trend has led to demand for specialists who can design and implement tailored plans, and we expect to see this continue in the near future
Businesses are offering an extensive employee benefits ‘menu’ to their potential employees and further down the line this could even lead to professionals having complete freedom over their benefits package. Either way, the employee benefits arena will continue to change and HR teams will need to realise the value an attractive EVP can have.
How do you think the employee benefits sector will change? Let us know by commenting below.
Jamie Pirie is a director at Capita Specialist Resourcing
