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We were delighted to be joined by Deb Sussex for our recent webinar to discuss current employee benefits trends and practices. Deb helps employers understand what they offer and why, so they can optimise their approach.

Together we discussed key challenges for 2024 and the importance of getting the foundations right to ensure your benefits offering remains relevant to employees.

Top Benefits Employees Value the Most

Paydata’s recent benefits survey highlighted that healthcare and pension were the most valued benefits in 2024. 21 per cent highlighted that healthcare plans in the form of private medical insurance or cash plans delivered the most value and 20 per cent chose pensions. This recognises the level of education, communications and encouragement organisations have dedicated to pensions to increase engagement by employees when considering their longer-term financial health.

Employee Benefits that Receive the Greatest Scrutiny

When asked about which benefits receive the most scrutiny, healthcare and pensions appeared on both sides of the spectrum – receiving positive and negative scrutiny. This reinforces the value placed on these rewards by employees that they evoke both positive and negative reactions. It also underlines the significant work still to be done to refine those benefits and the foundations that underpin them.

Hybrid/flexible working and annual leave arrangements were the subject of positive attention from employees. Car benefits, long service rewards, benefits portals and systems, poor communications strategies and disparity in benefits across grades were also the subject of negative scrutiny.

What Rewards do Employees Want?

The majority of respondents have reviewed their benefits and providers in the last 12 months. The primary reported reason for reviewing benefits is to make changes to aid recruitment and retention, as employers are keen to ensure their package is competitive in the wider market. Benefits benchmarking reports help employers understand the most popular benefits on offer in the market, helping to identify the benefits that candidates value most.

Respondents also cited benefits reviews as the opportunity to reduce costs and determine efficiencies in relation to suppliers and internal processes.

Current Challenges

49 per cent of respondents reported that costs, budgeting and affordability were key challenges they faced. This is particularly important given that the most valued benefits of healthcare plans and pensions are usually the most expensive on the balance sheet, so rising costs have to be factored in.

19 per cent said that differentiation, employee fit and alignment were key challenges. Designing a proposition which meets varying employee needs and expectations is an ongoing challenge for employers, resulting in a disparity of value being delivered across the organisation.

Around one in ten also reported a lack of understanding and engagement, which highlighted the importance of awareness and communication in delivering effective employee benefits. Our autumn HR workshops highlighted the importance of developing a robust communications plan and how many employers are adopting Total Reward Statements to reinforce the investment made in each employee and communicate the true value.

Get the Foundations Right

Every business needs to establish the right environment – are there processes and policies in place to support the objectives that you have in mind for your benefits package? The full cost of benefits also has to be factored in. This is not only the employer cost of offering each benefit, such as the contribution, but the full cost in terms of the required communications expertise, the brokerage arrangements, etc.

Every organisation should consider the foundations of the benefits on offer, but different prioritisation will be given to each depending on the culture of the organisation. The ability to tailor the package, whether there is an appropriate suite on offer, whether they are valued and used: all of these elements should be understood before any changes are made to the existing suite.

With strong foundations in place to begin with, this will ensure any changes to benefits arrangements are enhancements. This supports organisations from a cost perspective too, in order to make sure the budget is being put to best use. Robust facts and figures can help you request more budget if you need to. You can also re-allocate budget that is not delivering the value you want to other areas.

Repeat and Reinforce the Benefits Available

Employees have high levels of choice in the marketplace, encouraging them to be more demanding than ever. Choice and flexibility are key for many employees. Talk to employees about what they value and what they would like to see in the future. Carefully managing this step is important to review your foundations and identify what is working and if there are any small tweaks that can easily be made.

Reinforcing the choices on offer can be done through effective communications strategies. Search for opportunities to showcase your benefits. For example, linking initiatives for men’s health, wellbeing, charity events and other awareness days to relevant benefits on offer can remind people of what is already available to them. Taking a long-term view of how to remind employees about the benefits they might be interested in is crucial to maintaining long-term momentum behind the wider total reward package that they can access. A phased approach can drive the best outcomes for employees, as they are continually reminded of the benefits they can access.

Financial Wellbeing

Innovative Benefits for 2024

Organisations want to know if they can do something to help them stand out or whether there are benefits that they are falling behind on. The trends for 2024 are consistent with the key benefits we captured in 2023.

Women’s health continues to be really important, with menopause support being offered, alongside fertility treatment support. Accommodating family life and challenges such as dealing with personal loss through miscarriage or providing protection following domestic violence are increasingly offered by employers.

Time is very important. Holiday, buy and sell arrangements are easy wins; alongside how time is managed in the workplace, so hybrid working is highly valued. Employers are encouraging people to return to the office, especially with start-ups, but hybrid is increasingly expected by candidates. Organisations are trying to figure out how to balance employer and employee expectations in this area.

Health is also very important as a key benefit. Making sure healthplans are communicated well and offered in the right way is crucial. Whether this is fully employer-funded or subsidised, the sheer number of providers is vast, alongside the design and costs. Premiums have been increasing, so it is crucial to communicate the value being delivered to employees. From private medical insurance to access to virtual GPs, these have become increasingly desirable.

Values-led benefits and those dedicated to sustainability, such as electric vehicle schemes and volunteering days, are sought after by employees wanting to uphold their principles. Pay as you earn schemes to donate to charity are increasingly popular so that employees can feel they are giving back through their work.

Get in Touch

Given the importance placed on benefits by employees, employers should take stock of where they are at the moment. By identifying which benefits are truly delivering value to employees, and ensuring you are keeping pace with the market, can ensure that any changes are actually improvements. Call us today to talk about benchmarking your benefits against the market.

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