The phrase ‘employee benefits’ has grown to have all kinds of meanings – from life insurance to perks like free tea and coffee in the office. But which benefits are candidates talking to recruiters about?
A quick Google of the term ‘employee benefits’ brings up over a billion search results. That may not be a precise science, but it does give an idea of the scale of the industry – and how broad that phrase can be.
But one of the problems of this high level of coverage can be a lack of focus on why it’s supposed to be there – i.e. benefiting employees.
To that end, recruiters have a unique insight into exactly what employees and candidates are looking for from firms in 2020 and beyond.
And how those demands are changing.
Transparency from the off
In its ‘What Workers Want Report 2018’, the recruitment and HR firm Hays looked at what made a successful applicant journey. It found that almost half (49%) of employees had left a job within the first 12 months as a result of mismatched expectations set during the interview process (1).
“Applicants expect to be able to find out almost everything about an employer before they join,” says Nigel Heap, Managing Director at Hays UK & Ireland, in the foreword of the report.
“One out of two people won’t consider applying if they can’t find information about one or more of the following: an organisation’s investment in staff training, career plans, commitment to diversity and inclusion, Employee Value Proposition (EVP) and employee testimonials, as examples (2).”
In other words, clarity of EVP – the salary and benefits that an employer offers – is vital from the earliest stage of employer-employee contact.
Flexibility across the board
The number of flexible working options in the UK continues to rise. Flexible working experts Timewise say the proportion of quality jobs advertised with flexible working options now stands at 11.1% – up from 6.2% four years ago (3).
Recruiters tell the same story.
“The biggest shift in candidate expectations has been in flexible working policies,” says Georgia Morgan-Wynne, Manager – Commerce & Industry Division at the legal, compliance and risk recruiters Taylor Root.
“We’ve noticed businesses that aren’t able to offer flexible working from home or flexibility on, say, core hours are much harder to attract talent to. Businesses where you are able to work from home definitely have a higher attraction rate.
“The norm is that flexible working is in place, at least to some degree.”
That sense of increased flexibility is also true of candidate attitudes towards employee benefits.
Research from the payroll and HR service provider SD Worx states that 43% of UK workers want a flexible reward package and the ability to control their employee benefits.
Additionally, 69% of UK employees would be more likely to apply for a new job if the prospective employer offered a flexible reward package (4).
Chris Adcock, Director of Strategic Growth Business at REED Global, said: “If I could give any advice, I’d say if you can let the employee choose – and as long as the benefit is to the same value – there’s a great opportunity to successfully engage the workforce.”
Jeremy Campbell, Chief Commercial Officer at SD Worx UK & Ireland added: “Doing so will not only keep current employees happy, it will also help companies find and recruit the best talent (5).”
There is increasing understanding that working culture and practices are directly linked to an individual’s wellbeing. Research from Business in the Community shows that 85% of line managers acknowledge that employee wellbeing is their responsibility (6).
But there is work to be done to turn this into practical action.
In the CIPD’s Reward Management report – 2018, Dipa Mistry Kandola, Head of Flexible Benefits Service at LCP, says: “While ‘well-being’ is the latest buzz term, the reality from our results finds that few are doing or planning much in this space […] The government and UK policy-makers are taking steps towards bettering the UK’s overall financial and mental wellbeing.
“For now, the onus is very much on the employer to educate and engage their people with financial wellbeing to ensure people can meet the cost of living, saving and retirement.”
Wellbeing is a broad topic for employers to look to improve. But’s it’s vital that they do.
“Candidates now seldom view compensation and benefits as solely monetary – and expect health insurance, choice and core pensions as par for the course,” says Krystian Napora, Head of Reward, Mobility, HRIS and Analytics at the HR recruitment specialists Frazer Jones.
“Health and wellbeing has become an important expectation in the candidate market, particularly around flexible working, potential job share opportunities and companies investing in the individual’s mental and physical wellbeing.”
Chris Adcock adds: “Work-life balance and good mental health have never been more important to candidates.
There’s no getting around the fact that younger candidates are more interested in what I would call lifestyle benefits. There’s an immediacy to the gratification.
“Perks that seem small on paper – whether that’s soft drinks in the fridge, or yoga on Monday mornings – can actually go a long way to attracting and retaining the best talent as they help demonstrate the culture of the workplace.
“But although the more traditional benefits – pensions, health insurance – might not be seen as a deal-breaker taking a job, they could well be a deal-breaker if they’re not there.
"Their absence is the decision-maker, rather than their presence.”
A cultural shift
For recruiters, one thing that continues to dominate conversations with candidates is the issue of workplace culture.
“Not only is workplace culture a significant conversation, it’s often what will determine if someone applies for a position or dismisses it outright,” says Napora.
“One of the main reasons we see candidates registering is due to culture not hitting the mark. There are some things that money can’t buy, and a strong, collaborative culture is most certainly one.”
He adds: “Candidates get excited about benefit offerings that stray from the norm and portray a positive and progressive culture.
"We were recently engaged on a senior reward search and the offering seemed a little run of the mill.
"However, the client offered a luxury product to every employee once a year, regardless of the employee’s grade or salary.
“That really got the market intrigued on how the EVP linked in with reward, benefits, performance and culture.”
Georgia Morgan-Wynne agrees that conversations around culture are increasing all the time between recruiters and candidates. “In my sector [legal and compliance] I’ll often be asked about the salary and the bonus first of all. Then the next question will be ‘is there flexibility to work from home?’
“Benefits such as sick pay insurance or income protection are a given. In the more junior end of the market, they’ll also want to know about the office space – what’s the culture and the environment like?”
What we’ve learned about what employees want
‘Employee benefits’ is a wide-ranging term. As such, employers face a tough task in attempting to provide support and benefits for each individual.
But that is the task in hand. Strong candidates know their worth and employers must work hard to attract top talent – and, to apply the same logic, retain the best talent.
1) Openness between employer and employee about the exact details of the benefits arrangement from the very start of the relationship.
2) Flexibility is a vital component of any benefits offering. That might mean flexibility of location of working hours, or location. But it also extends into how the benefits are implemented. A menu-based approach to employee benefits allows for firms to tailor benefits to suit its workforce’s specific needs.
3) Wellbeing is an issue that employers must provide practical, tangible action towards. Line managers should seek to understand the needs and preoccupations of employees. But there is also enormous benefit in simply providing the resources for employees to seek advice elsewhere. Telephone or face-to-face support networks, for example, offered on EAPs like Unum LifeWorks.
4) The culture of a company is more important than ever to candidates. Thinking creatively about benefits is an attractive bonus. Financial backing, however, be it salary or monetary support in times of need, is still the number one concern of many.
1,2 Hays. (2018). What Workers Want Report 2018, p1
3 Timewise. (2018). The Timewise Flexible Jobs Index 2018
4,5 SD Worx. (2018). Mind the reward gap!
6 Business in the Community. (2018). Mental Health at Work 2018 Report, p56