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Nick Burns


Chief Executive Officer, Benefits Consulting Division, UK

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Employee benefits in 2021: the need for a stronger employee value proposition

Perspectives have shifted and employee benefits must adapt in the year ahead.

With 62% of UK employees working remotely at the height of the Covid-19 pandemic, the challenge for employers to keep their workforce engaged has never been so apparent.

As organisations seek to hone in more on the ‘why’ over the ‘what’ and ‘how’ to prioritise employee and organisational wellbeing in their benefits strategies, clear and consistent communication will be essential. 

As teams spend months at a time without face-to-face interaction, simultaneously grappling with the disruptive daily uncertainties presented by a global health crisis, providing employees with the means to feel a clear sense of purpose in their work becomes particularly essential.

Employers are being challenged to respond to the shifting people agenda, and to shape benefit strategies that are fit for purpose in the 2021 workplace.

Connecting purpose to ‘experience’ is the new people agenda

The ‘why’ at the heart of an organisation will of course vary between employers, depending on the type of business in question and the industry in which it operates. From a benefits perspective, however, data indicates that improving internal communications in order to better emphasise a company’s ‘purpose’ will be of increasing importance across all professional sectors.

In fact, 52% of organisations surveyed in the Gallagher 2020 Benefits Strategy and Benchmarking Survey cited the intention to invest in improvements to their benefit communications as a common goal for UK employers.

Over the next 12-24 months, organisations will increase their focus and investment on assessing internal communication and stakeholder analysis strategies, making greater use of surveys, internal audits and data analysis techniques to gather information to paint a clearer picture for the workforce of how they are performing in all areas, and where opportunities exist to improve or grow.

For the first time, more than half of the employers participating in the 2020 survey say that they now actively seek feedback from their employees on benefits and wellbeing, up 26% on 2019. How employees feel about their work is increasingly being woven into internal measurement frameworks to test operational effectiveness, adaptability and productivity, thereby helping to shape a narrative that responds to workforce concerns to emphasise that there is more to a job than simply monetary targets.

Demand for a ‘different’ experience

At an organisational level, it is becoming clear that the UK workforce is looking for a stronger employee value proposition (EVP) to differentiate their workplace experience, and to reaffirm their employer’s commitment to engaging and retaining talent.

As one example, 33% of employers surveyed this year in the Gallagher report confirmed they are intending to make changes to their reward and benefit packages, particularly within the realm of healthcare and flexible working arrangements, taking a more holistic approach to sustaining employee wellbeing and helping their workforce to feel valued and engaged in their day-to-day work.

Employees that feel their wellbeing is being taken into account on a financial, career, mental health, emotional, environmental and cultural level are more likely to engage more readily with their employer’s objectives, feeling a greater sense of personal value and a deeper connection with the organisation’s core purpose.

Employers must do more to prioritise ESG-aligned benefits, or risk falling behind

An interest in wider societal purpose has also gripped organisations and individuals alike in recent months, with many consequently developing a deeper commitment to driving positive social change. Covid-19 has presented an opportunity to re-evaluate, and the prospect of creating a better world for future generations.

Environmental, social and corporate governance (ESG) strategies are likely to be a key area for promoting further environmental and societal wellbeing, as organisations become emboldened by government plans to maintain some of the positive outcomes of the pandemic, such as decreased pollution and to promoting public health.

Only two in five UK organisations surveyed in Gallagher’s 2020 report, however, declared that they have implemented an ESG strategy, and only a third of these apply it to their pension fund investment approach at this stage, despite the fact that trends indicate that across Europe, ESG funds are forecast to outnumber conventional funds by 2025.

As global lockdowns have brought down pollution levels and renewed people’s interest in protecting the environment, organisations that do not utilise this momentum to actively drive their commitment to tackling climate change and other environmental issues may lose their edge in the talent market.

Improvements are needed in employee benefit communications infrastructure

While organisations have positively identified the need to build their narratives and enhance their ‘storytelling’ techniques to emphasise purpose, many have emphasised the critical gap in existing communications infrastructure within their organisations, meaning as strong as a company’s drive to connect purpose to action may be, messaging may not be effectively reaching and motivating the workforce.

Indeed, 65% of organisations we spoke to this year acknowledged the lack of a pre-defined budget specific to communicating employee benefits, while as many as 34% of HR and benefits practitioners confirmed they struggle to communicate effectively about their organisation’s benefits offering.

Consequently, 50% of organisations intend to invest in digital communication channel improvements in the coming year to improve engagement and lift productivity, a change that will be of particular significance as remote working becomes increasingly commonplace.

The challenge ahead

Looking forward, as organisations seek to hone in more on the ‘why’ over the ‘what’ and ‘how’ to prioritise employee and organisational wellbeing in their benefits strategies, clear and consistent communication will be essential in order to bring the various operational strands together, and to bring the purpose narrative to life in a meaningful way.

Doing so will be critical in keeping employees engaged and assured of their intrinsic value to an organisation if employers are to enter the post Covid-19 era fully prepared for the challenges and opportunities ahead.

Interested in this topic? Read The future of employee benefits: flexible, personalised, digital.

Author Profile Picture
Nick Burns

Chief Executive Officer, Benefits Consulting Division, UK

Read more from Nick Burns

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