Benefit from on-line rewards

Employers need better and faster ways to attract, motivate
and retain staff. Sue Weekes looks at the difference going on-line can make
and, with the help of benefits expert Nick Throp from William M Mercer, reviews
some of the best sites

 

Who do you know who has moved to a new job for a better
pension scheme and gym membership? They are component parts of an increasingly
important package of benefits that can make the difference between retaining
and losing a valuable employee. As the war for talent rages, HR managers know
it is no longer a case of merely offering staples such as a car, health
insurance and a pension and, similarly, it is no longer a case of detailing them
in the staff handbook and then forgetting about them. HR managers have to be
both creative and flexible in the type of benefits they offer and then vigilant
in communicating what they are and their value to employees – which is where
the Internet comes in.

The past 12 months has seen introduction of a wave of web
sites that make it easier to reward staff and, equally important, easier to
administer the reward or benefit. As well as reducing administration and saving
time for the HR professional, they empower the employee enabling them to
recognise the value of their personal benefits.

“The war for talent and the expectations of e-aware people
that this kind of thing should be available on-line has brought about the rise
in such sites,” says Nick Throp, e-communications team leader at management
consultant William M Mercer. “There are some cultural reasons, too, reflecting
the change between the employer being the provider of everything to being the
facilitator – the Web is an ideal medium for this.”

 

Market confusion

Yet the on-line benefit sites market can be a confusing one
for both the HR manager and the employee. For a start, there are two main
groups of sites: those which help the HR manager manage an employee’s benefits
package from the desktop, and those which enable them to go on-line and choose
or purchase an appropriate reward and automate the necessary administration to
go with it. In truth, there’s little mystery or magic surrounding any of them
and, like any set of new tools, they are there to help you do your job better
when chosen and implemented correctly. “This type of initiative has to be done
within the context of the company’s overall HR and IT strategy,” says Throp.

Ask the average employee the value of their pension and
you’d probably be met with resounding silence. The Internet can put an end to
such ignorance, allowing HR professionals and employees to go on-line at any
time and find out the precise value of their benefits package at the click of a
mouse. It will also let them interact to see, for example, the effect of
increasing pension contributions, or maybe trade one benefit for another. It is
still early days but there are already sites and systems out there doing this.

“Before, it could have taken weeks to put a value on each benefit,”
says Robert Paterson, founder and managing director of Eurobenefits.com. “But
we have a single database that allocates the correct amount to each individual
and gives them a statement at the press of a button.”

Eurobenefits, which claims to offer the first digital
flexible benefits system, reckons that a company could spend up to £500 a year
on the administration of each employee’s benefits package. But via some clever
behind-the-scenes legwork (such as taking payroll details and writing a two-way
link to it and data dumps from service providers such as insurance and pension
companies), it claims to be able to cut this to £100 per employee.

Other features on the site include the facility to let
individuals trade benefits. “We found that if you are 18 you are more likely to
be into a car and gym membership than a pension,” explains Paterson. And if an
employee has more than one pension, the system can calculate their collective
worth on one statement. “An employee might have four different pensions but
unless they can see what they are worth on a consolidated statement, they’re
meaningless,” he adds.

While staff access the Eurobenefits service via the
Internet, setting up involves close working with the company to tailor the site
to your company’s needs. However it may be that an integrated system like this
is more than you require. If, for example, pensions are the only benefit
offered by your company, a specialist pensions administration site, such as
thePensionzone (www.thepensionzone.co.uk) may be more appropriate. Similarly,
if stock options feature heavily in your benefit set and generate a lot of
interest among employees, a dedicated shares assessment system such as MyShares
(www.myshares.co.uk) is worth looking at.

 

Employee interest

“We have built one module of which there could be many,”
says Tim Sargisson, marketing director of Swipe, the company behind
thePensionzone. “We could, for instance, also develop a state pension benefits
module.” Sargisson sees their own site sitting quite happily in a suite of
benefit sites along with the likes of Myshares.

The fact that companies have to be more creative in the kind
of rewards and incentives offered to employees has spawned a range of service
providers, many of whom are recognising the benefits of being on-line.

“We reckon that traditionally it takes three piece of paper
to reward someone: one to generate the reward, one to do the tax and one to do
the management administration, with each piece of paper, say, costing £1,” says
Stephen Humphreys, managing director of Projectlink, parent of The Incentive
Shop, whose rewards span chocolates and magazine subscriptions to day passes at
a health farm and whose customers include BT.

 “We have been paper-
and telephone-based for five years and we are trying to persuade people off the
telephone.”

When an HR manager buys a reward from the Incentiveshop
site, a tax and National Insurance report is generated so a large part of the
administration is taken care of. While Humphrey does not feel that going
on-line will revolutionise the way people look at reward schemes, he does
believe that it streamlines and automates the process to the point that it
becomes another classic HR function that could be easily outsourced to relieve
the HR manager of routine work.

 

Empowered by systems

As well as the practical benefits that Internet-based
services offer to HR, being available online can add value for the employee on
the receiving end. The corporate concierge service offered by Enviego,
traditionally operated by telephone, is designed for the “time-starved”
employee to help them redress their work-life balance. It will act as middleman
in finding an individual everything from theatre tickets to a plumber.

 “You can provide
better canteen facilities and put crêches in but you can’t give people back
their time,” explains marketing manager Kathleen Gillin, who adds that
concierge services are big business in the US with Microsoft and Ernst Young
providing one for their workforces. “We’re not a dotcom company but obviously
enabling people to place orders for this kind of service 24 hours a day, seven
days a week is a huge benefit,” she adds.

While we are likely to see a growing migration of
traditional reward companies to the Internet, HR managers are likely to be even
more empowered by systems built to optimise the Internet’s strengths. Warp, the
Web Award Redemption Programme, has been created by marketing services company
Maritz and combines e-commerce and new media to offer a global incentive
scheme.

 Individuals can
access their company’s section of the Warp site and choose from a range of
awards, tailored to the lifestyle of the participants. The price on each
product builds in local taxes, duty and delivery charges so the person buying
can see exactly how much each award is worth. Globalisation means award
programmes that cross international borders and address employees in their own
language are likely to become a permanent fixture on the rewards landscape over
the next decade.

Clearly, the more wired a company is, the easier it is for
them to take advantage of online benefit services. And while computer access
may not be necessary for every employee in every company, the war for talent
means that some kind of online mechanism that allows everyone to regularly
assess the value of their benefits should be on the agenda. After all, you
wouldn’t want to lose your best on-the-road sales person because he simply
wasn’t aware that the combined value of his four pensions meant he could retire
at 45, would you?

But lifetime membership to an on-line concierge system and
unlimited points to spend on a Web reward site should not be seen as a shortcut
to keeping star performers, as Nick Throp neatly sums up: “They should not be
isolated initiatives but linked into core messages about the organisation’s
values and its culture.”

 

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