Communicating the true value of benefits packages
One of the top reasons for offering benefits packages to employees is to improve staff engagement and retention, yet most companies still fail to do this successfully, according to Randstad.
Historically and culturally, pay decisions and benefits packages were seen as a private matter and although things have progressed and employee motivation has changed, businesses still have little or no transparency when it comes to successfully promoting those benefits, Randstad says.
Yet according to research from the Chartered Institute of Professional Development (CIPD), if a benefits package is targeted to the right audience and is communicated properly and effectively, it can have a positive effect on staff satisfaction.
Randstad says that not properly communicating benefits to employees is having a huge financial effect on the UK business according to the Cass Business School, who revealed it was costing the economy £2.7 billion a year through increased staff turnover and absence.
A CIPD spokesman said they were unable to say why more employees weren’t given an explanation, “This finding is odd given that previous surveys have found a relationship between employee satisfaction with the decision and receiving an explanation for that decision.”
Just over half of employees (51%) in the CIPD’s latest Employee Outlook report had received an explanation from their employer in 2014 whether that was for an increase, pay freeze or decrease. Explanations were more common in the public sector at 67% compared to 47% in the private sector. Employees were also more likely to receive an explanation if they worked for a larger firm.
Regardless of how good their benefits packages and and pay are, however, over half of employers asked by the CIPD said they “very much preferred to keep pay information as confidential as possible”, often only releasing information when required to do so by legislation.
Communication is proving to be a problem regardless of the seniority of the staff member with HR professionals citing a number reasons for not giving proper explanations.
They said staff did not understand what behaviour and performance was required for reward and didn’t appreciate the value of the total reward offering. Some also didn’t believe incentives were motivational and didn’t engage employees. Others said budget restraints meant they were unable to increase pay, indicating perhaps that this didn’t need an explanation because it was down to outside influences.
Randstad says that HR professionals cited ten top risks when it came to attempting communications with employees which included: employees not seeing the reward as fair, difficulty in explaining to them what their desired performance and behaviour should be and line managers failing to understand the importance of reward.
Organisations were also not offering their employees much in the way of financial advice, according to the CIPD research. Three quarters of the survey respondents had no opportunity for advice although half did say they had access to debt advice or counselling.
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Randstad is a HR service provider with a presence in 147 locations around the world. www.randstad.co.uk
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