Benefits and Rewards for Employees – A Total Guide
Do you want to feel that you are managing reward and benefits effectively? Do you want to attract top talent, make employees feel like individuals, and have benefits and perks that make employees happy? Read on as we discover all you need to know about employee benefits and rewards.
What are the Differences Between Rewards and Benefits?
Rewards are given as a way to help employees feel happy, recognised and as part of the employee experience. A reward and recognition programme might be set up as a way to
- Improve company culture
- To sit alongside employee benefits
- To help employees feel their efforts are recognised
- To offer rewards that aren’t financial
Examples of rewards would be
- Gifts and treats
- Meals out with the team
- Surprise time off – finishing early
- Gift cards
- Cash rewards
- Spot rewards
Intangible are things like verbal and written praise, autonomy, work-life balance and professional training. Tangible are your trophies, lapel pins, certificates, gift cards, pay rises, boosted benefits and events.
Benefits are more about the way employees are compensated for their work. While the phrase ‘benefits and perks’ go together, perks can be rewards, but benefits can’t be rewards.
An example of an employee benefit is something such as
- Flexible working arrangements
- A bike to work scheme
- A pension contribution
- Company cars / allowances
- You can also have personalised, flexible benefits.
What are personalised flexible benefits?
Personalised flexible benefits are a new take on employee benefit models, where benefits are tailored to individual employees and their needs. This could be based on age, parental status or location – among other factors – to account for the differing needs of each employee. For smaller companies with smaller budgets, this may mean allowing staff to pick and choose from a limited range of benefits. However, for larger companies this can mean having entirely different options on offer, and packages for their employees based on what stage they’re at in life.
If you’re an employer and you’ve not previously heard of personalised flexible benefits, or have never felt it worth implementing them, this could be the time to rethink that decision for one simple reason: over 90% of your employees want them. If you don’t, then you may find yourself joining the ever-growing ranks of CEOs wondering why their staff turnover is so high.
What are the top employee benefits?
This is an ever-changing area of research, but the latest stats suggest the following:
Not every employee can physically get to their workplace every day, whether that’s due to a disability, injury or caring responsibilities for children or elderly relatives. By offering flexible or remote working to your employees, you can retain their services when otherwise they may have been forced to leave the workforce.
Flexible hours allow employees with responsibilities or a busy social life to come and go when they need to, and then catch up on lost hours when they have free time, for instance, after their children are in bed. Of particular note is the fact that in a 2017 MetLife report, 75% of respondents were interested in flexible working. As such, it’s highly likely that your employees are interested in flexible working, even if they haven’t told you so yet!
Not every employee functions best in a crowded or noisy office. Making remote working an option recognises this fact. While not necessarily viable every day due to the risk of loneliness, simply having the option can boost employee productivity. Importantly, this boost to employee productivity is tangible, with one Stamford University study showing up to a 30% improvement in productivity as a result of the option being available.
Working from home can also be vital for carers or those with long commutes, and can even allow you to retain those who need to relocate. Offering the chance to work from home can make all the difference when you are trying to reduce staff turnover.
Health benefits packages.
Typically, these are given with increased flexibility and a greater emphasis on voluntary benefit options across a variety of categories. 77 percent of employers now offer an average of five health plan options between HDHP and PPOs, and nearly two-thirds now offer both an HSA and FSA. In a study from Benefitfocus, Inc., an industry-leading cloud-based benefits administration technology company HR professionals identified preferred voluntary benefits, including:
- Mental health programs
- Help with financial planning and retirement
- Increased paid time off and sick time
- Educational support
- Pensions top-up
Even among younger workers, there’s serious anxiety about retirement age – most of those entering employment today expect their career to last until at least their 70th birthday. This anxiety is backed up by government statistics: a Department for Work and Pensions report shows more than 1 in 10 individuals past retirement age to be still employed. This has also translated into an 11.8% increase among the workforce who are saving for retirement according to a report by Scottish Widows. Given that your employees believe their normal pension alone cannot support them for the full duration of their lifespans, a pension top-up is likely to be a very appealing prospect.
Employers recognize the importance of supporting employee wellbeing to increase job satisfaction and engagement. According to a study from Buck, 68% have enhanced their employee value proposition, and 97% offer at least one voluntary benefit, up from 88% in 2020.
According to a 2022 study from Buck, the fastest growing voluntary benefits between our 2020 and 2022 surveys include: Hospital indemnity (+20%); personal loans (+19%); financial coaching/planning (+19%); caregiving (+12%); and critical illness (+11%).
In 2019, the New Economics Foundation – a UK based think tank – released a report that recommended the best way to increase productivity is to increase pay and the available holiday of employees. Given that the UK has one of the worst rates of productivity among international advanced nations, increased productivity is certainly desirable.
It is also widely acknowledged that by increasing the amount of leave available to your employees, they feel more relaxed at work, safe in the knowledge that if they require time off they can take a few days out. As such, it should come as no surprise that staff greatly appreciate the option of taking additional holiday as part of their benefits package.
Gym memberships and cycle to work schemes
While a somewhat traditional option, access to gym memberships or cycle to work schemes as part of a benefits programme is something that many employees still really appreciate. They feel like you, as their employer, genuinely care about their health and wellbeing. Helpfully, the government agrees that cycling to work is a good idea, and offers you tax exemptions on the creation of cycle to work schemes. While the government does not provide tax incentives for gym membership, they strongly recommend offering exercise-related benefits to employees, citing cuts in sick days and boosting productivity.
One surprisingly effective way to help your employees feel more valued is to offer them learning and development opportunities. This has the benefit of helping the employee feel like you are choosing to invest in them as an individual, allowing them to feel more secure, while also providing you with a more productive business asset in the long-term. Importantly, this training can also provide long-term benefits as these motivated employees often suggest improvements to streamline processes and systems based on their new knowledge.
There is, however, an important additional side to this desire for training. Research by Totaljobs has shown that 2 in every 3 UK workers has quit a job due to lack of development, so offering training and room for personal growth is clearly of vital importance to your employees. As an employer, offering free or subsidised education opportunities seems like an elegant solution to your problem. With the potential to gain a better-trained employee, who feels happier and more productive, what possible reason could you have to say no?
While maternity leave is often a given, what about fathers? Complications before, during or after the birth can be traumatic for fathers who often feel ‘surplus to requirements’, and any serious problems or medical conditions in either the mother or child can be a difficult start to what should be a joyous time in the new family’s lives. This can bring its own challenges to fathers, who can benefit from their own support.
The importance of employee benefits and rewards in every workplace
For the 15th year, the USA’s own MetLife’s 15th Annual Study of Employee Benefit Trends was released.
The study looks at 2504 employers with at least 2 employees, and 2652 employees aged 21+ who reside at companies with 2 employees or more and this gives a good indication of some of the importance of employee benefits and rewards in the workplace.
- 83% said they were important as they wanted to retain employees
- 80% said there was the interest in increasing productivity
- 51% felt that retention would be what would interest them in the next 3 – 5 years
A 2022 study by Buck showed nearly two-thirds (63%) of employers are seeking to foster increased job satisfaction, engagement, and the ability to attract and retain talent through voluntary benefits. This concurs with employee views: 68% agree or strongly agree that voluntary benefits are an essential part of a comprehensive benefits package.
For employees in the same study, it was revealed that 72% wanted customized benefits.
How Good Reward Management Will Transform Your Company
Let’s flip to rewards. How can good reward management transform your business?
While 47% of employees say new growth opportunities are a better way to reward them for their achievements, 47% also say they want spontaneous rewards. (Simply Thank You). Yet most companies don’t do enough.
A survey by Authentic Recognition found when looking at the level of rewards:
- 2% Received Daily recognition
- 11% Received Weekly recognition
- 20% Received Quarterly recognition
- 17% Received Annual recognition
- 29% Received No recognition of any kind.
When things may be a little tricky for employees, a great reward strategy that’s not prescriptive and lets them choose what they need fits perfectly with businesses that want to make autonomy their focus.
“ There will still be businesses who are questioning the ROI on rewards, but in this new world, I think the biggest question is what is the cost of NOT offering both tangible and intangible rewards? “ Colin Eglinton, CEO – onecode
Studies show that people who believe their work matters are four times more likely to be engaged, learn faster, and feel more fulfilled. Those people stay by your side. Companies with the best employee experience scores also have 2 x the return on sales and a Glassdoor rating that doesn’t make them feel nauseous.
If you’re looking for great ways to manage reward and benefits, now is the time to take a look at some of the amazing suppliers around in the space.
For a personal recommendation, speak to us today.