Bene ts 2012
The four issues driving reward and recognition
strategy in the next twelve months
What you need to know and what you can do
Employee Bene ts 2012
THIS INDUSTRY RESEARCH ALLOWS US TO SPOT AND
ACT ON THE TRENDS WHICH ARE SHAPING REWARD
Every May, research from Employee Bene ts magazine provides us with an insight into the
key issues driving the delivery of bene ts and reward in organisations.
It is an important study because, thanks to the way the questions are repeated, it allows us to
look at industry trends over time, spotting the sticky issues which continue to challenge us and
catching an early glimpse of the new ones on the horizon.
As is the case with any research, it is only when you look beyond the headline gures and pick
out the trends that you get a picture of the themes that matter. And even then what really
matters is asking the question “so what does that mean for me?” and nding practical answers
to apply in our organisations.
Finding time out to do thinking can be hard. That’s why we have produced this white paper
which brings our analysis of the key themes emerging from the 2012 Employee Bene ts
research and how we think this needs to shape delivery of reward and bene ts programmes
over the next year.
The four themes that matter
Few of us need to look at the Employee Bene ts 2012 Research to know that the continuing
and urgent challenge facing nearly all of us is to deliver ‘more-for-less’ in a cost-conscious
climate. A dicey economy, budget constraints within our organisations and the pressure on
employees from in ation and stagnant wages provide the context for this challenge.
What matters in this environment, where our contribution to the performance of our
organisations is critical, is getting strategy & tactics correct, and making the right changes to
what we do.
Looking at the Employee Bene ts research we believe there are four common issues we must
deal with in the next twelve months if we are to deliver a valuable contribution with reward
and bene ts. These are:
Improving planning and delivery: Doing a better job of ensuring that bene ts, reward and
recognition are aligned to and deliver against organisational goals
employees with relevant bene ts and rewards
support employee wellbeing
Finding fresh ways of engaging
Playing a central role in the way our organisations
Making smart changes to what we do so we can
better measure our contribution to organisational performance
This white paper delivers our analysis of why these issues matter and what you can do to act
1. Improving planning and delivery
Planning and delivering reward and bene ts focused on organisational goals is
critical to success
The rst major challenge we face in making a di erence to our organisations in today’s ‘morefor-less’ environment’ is getting the right foundations for our reward and bene ts programmes.
Here our analysis of the EB research shows there are two fundamental issues we need to focus
on in the next twelve months if we are to succeed.
The rst of these is in planning. With the EB survey nding that in nearly a quarter of
organisations (24%) there is no link between reward and bene ts strategy and business
strategy and that in nearly one in ve (19%) there is no link with HR strategy, we think one of
the stand out themes for us to get to grips with is to make sure that the reward and bene ts we
deliver are grounded rmly in what our organisations want to achieve.
And while 14% of professionals say they plan to strengthen the alignment of what they do
to the objectives of their organisation in the next twelve months we think this needs to be
signi cantly higher if we are to credibly contribute to performance.
The second area of focus is in the area of execution and delivering the change which ensure
bene ts and reward support our organisations. Looking at the EB gures it is clear that we
have the opportunity to do more to deliver what we say we will do. Evidence of this comes
from the gures which show the limited headway that a substantial number of organisations
have made in the past year, not only in implementing planned changes to bene ts – 31% said
they would make changes and only 17% actually did – but in delivering new programmes which
support motivation – 31% versus 14% respectively. Doing what we say we will do is critical not
just for delivering the change we promise but in ensuring we are trusted advisers who can be
relied upon to shape and support performance in our organisations.
Whether or not you are in an organisation which needs to sharpen the strategic alignment of
reward and bene ts to the business or one which needs to focus on better implementation
there is still likely to be the opportunity of improving in both of these areas.
The key to successfully improving performance is in having a mindset which is both bold and
realistic. Bold in the way we talk about the di erence we make with reward and bene ts,
basing everything we do around our contribution to people and business performance.
Realistic in that what we promise, we make sure we can deliver and measure. By getting these
foundations right – and focusing on improving - the programmes we build and deliver have a
better chance of success.
Key action points:
Consult colleagues - up and across the business, and HR line managers about what you can change
quality to customers
by enhancing sevice
It’s not just an issue of communication. Fresh, personalised benefits propositions
are the key to improving perceptions of the benefits
Anyone looking at past EB research won’t be surprised at the priority given to the issue
of improving the way bene ts are perceived by employees in our organisation through
communication going into 2013; communicating more about them and improving perceptions
of the o er are the two issues we say are most important for us in the next year.
They are also the issues we say are priorities every year. And because of this we think it is
important to think hard about a new response to improving perceptions of what we o er
because whether what we o er is perceived and valued is critical to making a di erence to
performance in our organisations through reward and bene ts.
Taking the EB gures at face value it seems clear that as well as thinking hard about what we can
do to improve perceptions, we are working hard to make changes in a way which may help this
cause: 66% think about what employees will value when we introduce new bene ts, 44% of us
have added a new element to the bene ts mix in the last year and 67% plan to communicate more
about what we are doing.
Yet something clearly is working.
Our thinking is that we are consistently failing to get the engagement in reward and bene ts at the
levels we aspire to because of the way we plan and package the proposition in three key areas:
The rst of these is in getting a deeper understanding of past performance in talking about
our bene ts proposition. If our bene ts are not perceived as valuable it is unlikely that simply
upping the amount of communication we do will provide the x to the issue. We think to
improve perceptions of the proposition we need to ask what we have done in the past in both
the bene ts proposition and the communications and examine what is working and what isn’t
working before we can start to put our nger on how we need to reshape what we are doing
in the next year.
The second area of focus is in how we plan when we introduce a new bene t. The key here is in
asking whether we are doing this because we know employees will value it or simply because
we think it. In other words, have we actually researched and tested the proposition? Are we sure
there is an opportunity to embed better insight into employee needs into our planning?
The third is in the way we package the proposition itself. In the current environment where
consumers are used to increased personalisation in everything they consume, employees who see
generic bene ts propositions from employers will be le cold, uninspired and unlikely to engage.
We need to work harder to treat employees like consumers so what we o er and the way we o er
it stands out in their minds and is more tailored to their individual needs.
Perhaps the most telling question you can ask yourself in all of this is what it is stopping your
employees from valuing the bene ts and reward on o er? Is it really a case that you haven’t
told them enough times or is it because what is on o er is not what they need?
We believe that re ecting and then creating new propositions based on what your employees
really need is what is really key to improving the value they place on the reward and bene ts
you o er.
Key action points:
does not have to mean high complexity and high cost
for your employees
and test your ideas. Consider how many of your employees engage in
social media channels
employee groups throughout the year
management structure. This is the most e ective communication channel
in the business, o en under used
Challenge your reward and benefits communications suppliers to come up
with new plans to drive higher levels of participation
Reward and bene ts have a key role to play in a proactive approach to employee
wellbeing. Now is the time to grasp the agenda
One of the big current debates in the media around employment and the workplace is the part
employers need to play in supporting health and wellbeing of employees.
This emerging and important agenda is also one of the key themes emerging in this year’s
Employee Bene ts research where, in the list of jobs for the next 12 months, the objective
of reviewing health and wellbeing bene ts (26%) sits right next to that of reducing sickness
absence (20%) as a priority.
The fact that a similar number of organisations are prioritising these two key elements is telling
of a trend which is seeing employers thinking more smartly about employee wellbeing.
This thinking is evolving in three areas which matter to the delivery of rewards and bene ts:
The rst of these is the move among employers to a broader de nition of wellbeing which
looks not just at physical health but mental and nancial well-being, which can both weigh
heavily on the performance of individuals. This recognises that in the current environment,
stress can come as much from the worry of not being able to make a mortgage payment as it
does in ful lling a demanding role or meeting pressure to perform.
The second is in the proactivity in which organisations are tackling wellbeing. The lead factor
many employers have to measure this is sickness absence. High levels among individuals,
teams or organisations are o en a symptom of deeper or long seated malaise. The new focus
on wellbeing implicitly means a change to proactive measures which create an environment
where individuals feel their wellbeing is valued as much as their contribution to the
The third area is sta performance. Research shows that happy, healthy people spend more
time on task and are more productive than those who are not. That is good for employees and
good for the organisation.
Your organisation may not be focusing on wellbeing right now. Nonetheless, this agenda
provides a signi cant opportunity for those of us who control how bene ts and reward are
used in organisations to make a profound di erence to our employees, by thinking creatively
about what we can do to deliver an environment which supports employees to make better
choices about their wellbeing.
Key action points:
being in your organisation and establish potential gaps and opportunities
Ensure managers fully appreciate what support is available to employees
4. Proving and increasing return on investment
We can only support business performance if we understand what works
– and what doesn’t
One way of describing the nature of the current conversation about return on investment
from reward and bene ts is that it is, for the large part, conspicuous in its absence.
While the 2012 EB research shows over three quarters of professionals – 77% - rate their
strategic priority as driving employee engagement, only 14% are focused on improving the
return on the money spent.
We believe the lack of emphasis on this measurement is a critical issue to deal with. This
is because in delivering reward and bene ts, ROI should really be the only way we decide
whether we should continue, review or stop what we are doing. It is also important because
ROI is the key metric which others in our organisation use to measure our performance – and if
it isn’t already, it should be.
With just under one in three organisations surveyed by EB planning to review their bene ts
package in the next twelve months (29%) and slightly more (32%) planning to review suppliers
to get a better deal – numbers broadly consistent from 2011 – there is a golden opportunity to
put ROI at the heart of new arrangements we make.
In achieving this there are likely to be signi cant barriers: a lack of hard measurement of what
bene ts and reward currently achieve for the business, a broad roster of providers, an ad hoc
mix of bene ts, a lack of visibility of costs and even a lack of knowledge of the full costs of
providing the bene ts.
All of these prevent us from providing a clear cut case for the value of what we deliver in return
for the investment we make. But we shouldn’t shy away from starting to make sense of all of
this. In a climate where e ciency counts, you can only deliver value for money if you understand
which resources and activities are working hardest for you. Cutting costs and changing suppliers
may bring results in the short term but you also risk cutting the wrong costs or the suppliers who
o er the best value if you don’t understand the nature of their contribution.
Focusing on ROI helps bring order and a clear line of sight between the organisational
objectives, the investment and the outcomes we deliver from bene ts and reward.
The challenge is to bring ROI into the heart of how we think, plan and evaluate our work so we
can make the right decisions, maximise our contribution and emphatically prove the value of
what we do.
Key action points:
full cost of what you are currently delivering
they are making
Embed this measurement in any new reward and benefits programmes
CONCLUSION: FROM THINKING TO ACTION
The environment may be challenging but there is a unique opportunity for
bene ts, reward and recognition to play an important role in improving
Looking across the four challenges we have identi ed for the next year there is a signi cant
opportunity to use bene ts and reward to improve employee performance in our
Although budgets may be shrinking or static, we think this is a goal which is both realistic and
If there is one factor which will be critical in achieving this goal, it is focus. A focus on bringing
the big picture of what our organisations are trying to achieve into our work, a focus on
understanding how better to personalise reward for employees, a focus on how we can
do more to in uence performance and a focus on what we can do to better measure the
contribution of reward and bene ts.
There is no doubt that some of this will be challenging, but it only takes a small number of small
improvements to make a big di erence to the impact of what we do in our organisations. And
in the current challenging economic environment, every contribution counts.