What are the drivers of an employee benefits strategy?

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Smartsalary conducted a survey based study on what drives employee benefits in an organisation and how the HR community views benefits from an attraction-retention-engagement lens.
The survey was rolled out to about 2000 HR managers across Australia via LinkedIn.

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What are the drivers of an employee benefits strategy?

  1. 1. What drives employee benefits strategy in Australian organisations?- Study through survey of Australian HR managers
  2. 2. Executive Summary 100% of HR managers surveyed say that employee benefits 1 drive retention Leave and flexibility are considered most important type of 2 employee benefits followed by financial benefits such as salary packaging 3 Cost to the organisation is a key factor in deciding which employee benefit to provide to their workforce Understanding of salary packaging and novated leasing is 4 high among the HR managers surveyed 5 73% of organisations surveyed already have salary packaging or novated leasing in place 78% of organisations that do not already have salary 6 packaging or novated leasing are considering to implement in 2013!
  3. 3. DRIVERS OF EMPLOYEE BENEFITS We asked what the main drivers of an employee benefits strategy were: of HR managers surveyed either agree or strongly agree that employee benefits drive retention
  4. 4. What do you see are the main drivers of anemployee benefits program? Engaging Staff 5% 63% 32%Retaining existing staff 36% 64% Attracting new staff 5% 59% 35% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Disagree Agree Strongly Agree
  5. 5. Types of Employee benefits ranked in order ofimportance to HR managers surveyed 1 Leave and flexibility 2 3 benefits Financial benefits such as salary packaging Wellness programs such as gym memberships 4 Access to consumer retail discounts 5 Leisure and lifestyle memberships
  6. 6. Cost to the organisation is a top considerationwhile deciding what benefits to give employees 1 Cost to the organisation 2 Potential participation of employees 3 Ease of implementation 4 Savings offered to employees 5 Compliance and risk
  7. 7. Awareness and understanding of salary packaging and novatedleasing is high among HR managers across Australia I understand salary packaging and novated leasing very well, 57% Somewhat understand the benefits, 38% I dont know anything about salary packaging or novated leasing, 5% 0% 10% 20% 30% 40% 50% 60% 7
  8. 8. 73% of HR managers surveyed have salary packaging ornovated leasing as an employee benefit in their organisationalready Does salary packaging or novated leasing form part of your organisations employee benefits program? Yes No 0% 10% 20% 30% 40% 50% 60% 70% 80% 8
  9. 9. 78% of HR managers who do not offer salary packaging ornovated leasing are considering offering it in 2013 Would you consider exploring the option of including salary packaging and novated leasing as part of your organisation’s employee benefits program in 2013? Yes No 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 9
  10. 10. Only 19% of organisations that do salary package do it internallycompletely Do you outsource or do the benefits administration internally? Combination 37% Outsourced 44% Internally 19% In the combination category, most do salary packaging internal and novated leasing outsourced 10
  11. 11. The main advantages of why organisations want tosalary package – particularly cars Top advantages of providing salary packaging and novated leasing Tax benefits and therefore more competitive salaries Meets employee expectations and is consistent with competitor offering Employees expect it nowadays Cost neutral to the company. Employees get to purchase a vehicle they would not normally be able to afford. Provides freedom of choice and flexibility for employees and reduced vehicle costs to employers More to offer to employees, leads to greater tie-in or retention Tax benefits; ability to spread cost
  12. 12. Top challenges to providing salary packaging: HRmanagers believe there’s not enough benefit for employees 80% 70% 60% 50% 40% 68% 30% 50% 20% 43% 39% 10% 18% 0% Employees arent It is expensive to It is difficult to The process is Theres not enough interested implement and understand how complex to benefit for administer salary implement and employees packaging/novated administer leasing works One of the respondents’ comments was - “Planning, thought and variety overcome these challenges”.
  13. 13. 71% of HR managers would consider a service that guarantees thelowest price for new cars as an employee benefit outside of salarysacrifice Car buying service Yes 71% No 29% 0% 10% 20% 30% 40% 50% 60% 70% 80%

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