An employee benefits programme is a menu of “benefits” you offer to your employees. While organisations usually have some benefits in place for their employees, it’s important to regularly assess the programme to ensure it aligns with the overall reward strategy and delivers value for money. Here are some tips to ensure your benefits programme still meets your objectives.
Regularly review your benefits
Most benefit programmes have grown up as much through historical accident, as design. The first job is to do a full review of your benefits:
- What do you offer?
- To whom?
- For how long?
Identify your reasons
We recommend you review each benefit in your programme against each of these five reasons for having a benefit:
- Market – often relevant at a particular level of seniority, like share plans
- Moral/reputational – typically insured benefits like life assurance
- Tax efficient – where the benefit has a more favourable tax treatment than the equivalent cash
- Provision – where the organisation can provide the benefit much more cheaply than the individual employee, such as long term disability insurance; it may be that the perceived value is much higher than the cost.
- Company value – where the benefit may be of direct value to the organisation, as well as the individual, such as medical insurance.
Helping employees to understand and appreciate benefits
Employees typically undervalue the cost and value of benefits; sometimes they don’t even know they have some of them. So, ask for their opinion and act on the answers.
Benefits as part of a whole reward programme
Benefits are part of total reward, so look at the messages they send and look for conflicts with other reward and HR programmes.
Changing or removing benefits
If you want to change benefits, consider your current employees and new employees yet to join as separate groups.
Consider making changes as part of the annual pay review.
Take a medium to long term view in changing benefits. Most organisations will have a minority of employees on the old plan after five years.
Support with developing your benefit programme
It can be difficult to untangle and assess the range of current and legacy benefits you may be offering or have offered to employees. Removing and replacing benefits also needs to be handled with care and professionalism.
Let Rewards Consulting support you with this. Book a call today.