Communicating the benefits

strategies are often misunderstood by employers and workers alike. But good communications
could save UK firms £2bn in staff turnover costs. Nic Paton reports

The modern-day office is awash with high-speed communications – e-mail,
intranets, texting, video conferencing and the like. Yet, it is remarkable how
often employers and workers still fail to understand each other. Compensation
and benefits is no exception to this rule.

Employers are increasingly recognising the importance of the compensation
and benefits package; not just in terms of salary, but also pensions and other
formerly ‘fringe’ benefits, such as flexible working, childcare and extra
holiday, in attracting and retaining staff. According to a study of 300
organisations by financial services group Momentum, they spend between 10 per
cent and 30 per cent on top of their basic payroll on other benefits.

But fewer than one in five believe their workers place a high value on these
benefits. Why? The answer, it appears, is communication. In Momentum’s employee
benefits survey, just 2 per cent of the companies polled felt their
communications strategy on compensation and benefits was ‘excellent’, with the
majority of 39 per cent simply rating it as ‘satisfactory’.

A poorly-communicated package can lead to staff taking benefits for granted
or, worse, not taking them up at all because they don’t know what is on offer.

Ninety per cent of the small to medium-sized enterprises and large companies
polled by Momentum used passive means of communication – paper or e-mail – to
get the message across about their benefits, with many less using more active
methods of communication, such as group or one-to-one presentations. Two-thirds
used their intranet systems, e-mail or printed benefit statements.

"They know their benefits package helps them to recruit and retain
staff, but very few are good at communicating about it," admits Momentum’s
marketing director, Sharon Mason-Hunter.

In companies that offer low levels of pension contribution (2 per cent or
below), staff turnover was 38 per cent higher than in those which spent more on
their pensions (10 per cent or above), she adds.

The lowest staff turnover was found among companies that provided an average
level of pension contribution, but communicated the worth of this through
different channels. Better communications, Momentum estimates, could save UK
firms £2bn in staff turnover costs.

The company also says that using six or more mediums to communicate your
benefits, both active and passive, could reduce staff turnover by 6.5 per cent.
They are:

– Written information in a staff handbook or on a notice board

– On the company intranet or via e-mail

– One-to-one presentations by internal managers and external advisers

– Group presentations by internal managers and external advisers

– Printed benefits statements

– Online benefits statements.

"There is a direct link between how benefits are communicated and staff
turnover. Every time you do not communicate well and lose a member of staff, it
costs £10,000 on average to hire someone new, so it pays to communicate your
benefits," Mason-Smith stresses. "Good communication can increase the
take-up of benefits by as much as 50 per cent."

Five learning points for HR

– Look at how you are communicating your benefits. Are you using the best
and most efficient ways of getting your message across, and could you use
different means, such as the company intranet?

– Draw up a communications strategy, ideally in consultation with your
staff. How would they prefer to find out about the comps and bens on offer, and
any changes?

– Monitor the take-up of benefits. Are some used more than others? If so,

– Examine why staff are leaving. Were comps and bens an issue? What could
have made them stay, and can you put it in place to ensure others do not leave?

– Review your communications strategies regularly. Are they making workers
feel valued, and therefore more likely to stay, or has the message become

Case study: Pricewaterhousecoopers

Since 1997, PricewaterhouseCoopers
(PwC) has made a point of proactively communicating its innovative flexible
benefits package to its 20,000 staff.

The scheme, called ‘Choices’, allows employees to take part of
their remuneration package as flexible benefits, choosing from a central ‘menu’
of options. This includes perks such as a company car, extra holiday, childcare
vouchers, extra cash, private medical, dental and pet insurance, health
screening and extra pension provision.

For example, an employee in their mid-30s with two school-aged
children might choose extra holiday allowance, travel insurance and retail
vouchers. But a recent graduate looking to pay off their student debt quickly
might be more likely to go for the option of extra cash.

The scheme operates through the company intranet, but is also
explained to all new recruits, and is administered through an HR transaction
centre in the Midlands. Other communication methods include posters around the
office, voicemails and e-mails (when the annual renewal of benefits comes
around), and adverts on the intranet.

Take-up of the scheme is high, with new recruits often
surprised at how flexible it is. "People moving on from the organisation
say they have suddenly minded not having it," says Sasha Hardman, head of
reward and recognition.

In-house surveys have shown that employees now believe striking
a balance between work and career is a high priority, and the Choices scheme
plays a key role in helping staff to do this, says PwC.

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