94% say better employee benefits will improve retention, research finds
Benefits and rewards provision in the UK is set for a significant overhaul in the next five years as employers embrace new technologies in an effort to reverse ailing employee engagement and retention rates and overcome worsening skills shortages.
Research launched today by Capita Employee Benefits finds that the vast majority (94%) of benefits leaders acknowledge that their organisation needs to better use benefits as a strategic lever to improve employee retention, and digital is regarded as key to this; 92% state that digitisation within benefits is crucial to building staff loyalty and driving better retention. Interestingly, benefits provision is no longer viewed as only helping to engage existing staff; 93% of practitioners believe that benefits should also be deployed as a strategic lever to attract new talent.
Businesses are looking to improve engagement with benefits by delivering an enhanced employee experience, and they are putting their faith in emerging technologies in order to do this. 85% of benefits leaders predict that AI and machine learning will deliver improved employee engagement; 78% feel that IoT and wearable technology will have a positive impact; and 70% believe that virtual reality will drive engagement levels.
However, whilst benefits leaders are set to focus and invest heavily in technology to tackle engagement and retention challenges over the next five years, the research reveals that their experience of digital to date has been far from successful. Only 29% are very satisfied with levels of employee engagement around technology-based benefits and as few as 16% are very satisfied with their overall progress in digital.
The research reveals that only half (51%) of organisations are currently tracking and measuring employee engagement with benefits and 45% of benefits leaders admit to taking an ad hoc approach when it comes to considering user journey in their decision-making around benefits.
Gareth Pickles, managing director of Capita Pensions and Benefits, said, “Digital has the potential to deliver a faster, more seamless and personalised experience in benefits which gives employees a greater sense of control and choice and the opportunity to take a more proactive approach. But organisations need to take a strategic approach to digital adoption, rather than pursuing siloed, one-off implementations which invariably lead to failure and frustration. Digital should never be an end in itself, it is simply a means to enhance the employee experience. Benefits leaders need to ensure they have the skills and partners in place to get things right first time and ensure new technology integrates with, and supports, the organisation’s overall digital transformation vision.”
97% of benefits leaders say they are already facing or anticipate challenges in digitising the provision of benefits. 38% report that integration issues and a lack of interoperability between systems is a challenge, and the same percentage say that finding suitable technology partners is difficult.
Importantly, the research shows that employees are broadly supportive of efforts to digitise benefits provision, with 75% of UK workers acknowledging that technology is critical to ensuring they have the most personalised benefits package possible. However, employees stress that digital services need to be fast, seamless, personalised and engaging in order to be engaging. They also have concerns about ‘over-digitisation’; 52% still want human input and management when it comes to helping them to select their optimal benefits package.
Pickles concluded, “Instead of just approaching benefits as a tick-box exercise, forward thinking organisations are actively looking to maximise the value they get from their efforts and investments, in terms of improved employee engagement, wellbeing, retention and performance. They’re making benefits a major weapon in overcoming the skills shortages that have become such a barrier to growth in many industries.”
Photo courtesy of Shutterstock.com