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Kate Phelon

Sift Media

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Employee benefits: Are your people in the know?


CommunicationAlthough most companies offer some sort of benefits package, you might be surprised how few staff are aware of what they actually are. Joanne Christie looks at some of the different ways to get the message across.

“Did you know that we could get free dental and optical cover just by filling in a form,” I overheard a woman asking four of five colleagues in an office recently. “No,” they replied in unison. “I wonder why no one has ever told us,” pondered one. Undoubtedly, someone had told them at some point – probably in an email or memo, or perhaps during induction – but they didn’t remember. Unfortunately, this kind of conversation is all too common in modern offices – a survey by AIG UK Benefits found that while 86% of employers believe they communicate effectively with employees about the benefits they offer, 36% of employees disagreed and 45% found the products available difficult to understand.

“Companies spend about 15% of the value of their payroll in providing benefits to employees but they only spend 0.1% of the same amount in communicating what the benefits are.”

Tobin Coles, Jelf Group

Most HR professionals would say they have schemes in place to make sure workers are informed about benefits, but with a third of the 500 employees interviewed by AIG not using any of the voluntary employee benefits at their workplace, it seems the message isn’t necessarily getting through.

Tobin Coles, head of flexible benefits at employee benefits consultancy Jelf Group, says many companies simply fail to invest significant resources into communication. “We ran a survey and it turned out that companies spend about 15% of the value of their payroll in providing benefits to employees but they only spend 0.1% of the same amount in communicating what the benefits are,” he explains.

According to Croner’s Employee Benefits Report 2007-2008, staff handbooks remain the most widely used method of informing staff about benefits, with 73% of employers using them, while over half the companies surveyed reported using the intranet and 20% said they use reward statements.

Email and memos are popular ways to update staff, but it takes more than a group shout-out to communicate effectively. When faced with a bulging inbox or post tray, it’s human nature to tackle things which are personally addressed to us, putting aside anything that appears to have been sent to a large group. Ann Benner, who teaches management and human resources at Cornwall College, warns that relying on mass communication as a HR tool can be ineffective.

“Emails have become a way of saying ‘I’ve told everybody’ but technology often gets overused. We get bombarded so much with electronic information and often if someone sees they’ve got 20 emails, they’ll just not read some,” she explains. “Sometimes it is better to have staff meetings, or use face to face or print communications instead.”

Many companies now offer independent financial advice to help staff with benefits, and particularly with regard to pensions, this can be a very useful way of assisting employees to make decisions, says Charles Cotton, rewards adviser at the Chartered Institute of Personnel and Development. He adds that many employers underestimate the value of personal communication.

“The research shows that face to face communication seems to be most effective. Humans are set up to deal with verbal communication – we’ve been using it for hundreds of thousands of years while written communication has only been knocking around for four or five thousand years and all these new technological forms of communication have only come about in the last 30 or 40 years.”

“Email and memos are popular ways to update staff, but it takes more than a group shout-out to communicate effectively.”

Joanne Christie

Some organisations are also benefiting from a more targeted approach, such as the recent marketing campaign used by Newcastle City Council to encourage its male employees to sign up for its childcare voucher scheme. As HR adviser Jill Hunton explains, they played on the popularity of football in the local area.

“A lot of men here don’t realise that they can be in the scheme so we thought we would target them and we chose a football poster and put it around every council depot, on notice boards and in the staff room,” she explains. “The number of people in the scheme has increased every month since.”

The council also printed 1195 on the back of the shirts people wore in the posters, to illustrate the number of pounds an employee could save each year by enrolling in the scheme. Putting an exact figure on things is vital if employees are to recognise the value of the benefits they’re offered, says Jelf’s Tobin Coles.

“What you need to do is communicate to each individual what their benefit package is and what it is worth to them and their families,” he says. “You have to be very clear about the value. To a large extent companies offer benefits to retain and recruit employees. If you don’t communicate and all an employee thinks they are worth is their basic salary, it is very easy for another company to poach them away.”

The CIPD’s Cotton says companies might be better off rethinking their benefits package if it isn’t understood by employees. “An organisation could be spending a lot of money on something that isn’t actually having any impact on the business. You may be better off just giving people more money rather than giving them benefits.”

As any savvy recruiter will know, it’s one thing to attract people to a company and quite another to keep them there. Benefits can play an important role in retaining staff, but only if they’re being understood and taken up.

Joanne Christie is a freelance journalist.

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Kate Phelon

Content manager

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