If money doesn’t buy loyal employees, what does?

Rewarding staff isn’t just about money, it’s winning trust and loyalty with a relevant package of benefits to make their lives better

When my great-grandfather Ernest Drabble, a textile manufacturer in Derbyshire, dropped dead from a heart attack while walking in the Peak District in 1928, his staff went into mourning. In fact 250 of them went to the funeral. The Derbyshire Times opined: “[Drabble] was an ideal employer, and introduced many reforms and amenities which were greatly appreciated by the firm’s employees.”

A staunch Liberal, Drabble was also farsighted – for his day. Staff got breakfast and lunch, and his wife was said to distribute food and coal or even to pay for medical care for workers who were off sick. As a result his people didn’t just shed a tear for him when he died, they also stayed. In 1928, fully a hundred of the firm’s 300 staff had been with the company for more than 20 years.

Times have changed, but business is still seeking to quantify the value of benefits within a broader package of pay and compensation. It also still wants to get the best from its people, just as my great-grandfather did.

Employees' most desired benefits

Rewarding your staff

Reading-based Jive Software recently occupied one of the top spots – pipped to the post by Facebook – in a list of the top 25 companies to work for in the UK, measured by pay and benefits. The survey, by the jobs and recruiting website Glassdoor, was based on employee insights.

For Jive, a specialist in business social networking platforms, benefits are an essential HR tool. “We use the benefits offering as just one of many levers to attract and retain the best talent,” says Christian Reed, Jive’s senior total rewards manager.

As well as core benefits covering healthcare, income protection, life insurance and pensions, Jive focuses on wellness, including giving staff a monthly wellness allowance, and offers a plethora of other benefits, including paternity leave, childcare vouchers and even adoption assistance. These are attuned locally so that in the UK, for instance, staff can get flu jabs and on-site massages.

“We take a holistic approach,” says Mr Reed. “We want to be competitive from the perspective of compensation, our benefits offering, career development opportunities and the awesome culture that we offer at Jive. We believe that those different components add to attracting and retaining the best talent.”

And his UK Jivers, as they’re known, clearly agree. So what’s his advice? “Number one, solicit feedback from your employee base,” he says, “and be specific to the locality where you are looking to augment your benefits, so you can make sure you’re spending your benefits pound where it’s going to have the most employee impact.”

What a benefits package does is it buys a conversation that will help me understand my employees even better

Developing employee loyalty

And delivering impact will deliver you loyalty, according to Zoe Spicer, an HR consultant and lecturer at Ashridge Business School. “What we used to call a work-life balance isn’t a work-life balance any more,” she explains. “Most employers expect their employees to be absolutely engaged with their work 24/7 and, if that’s the case, it’s about helping them arrange their busy lives around longer and longer hours.”

This means offering benefits such as emergency child and elderly care or access to 24/7 private doctors – or risk losing out. “There is a lot of evidence that you really do not get the right people through the door if you are not doing this,” she says. “Also, if you are not doing these things for your employees then they’re spending precious minutes or hours in their working life administering such things themselves. It increases their productivity if you can make life as easy for them as you can.”

But it does much more than boost productivity. “The support generates loyalty and retention, and quite frankly makes the employee feel that you really care,” adds Ms Spicer.

Top 7 retention drivers

Understanding your employees

At the insurer Zurich, the UK’s head of HR Georgina Farrell puts the case for benefits in even more strident terms. “Money doesn’t buy me loyalty,” she says. “Money is cold. What a benefits package does is it buys a conversation that will help me understand my employees even better.”

In her case, that’s a dialogue with 7,200 employees across 16 UK locations, 87 per cent of whom take advantage of one or more of the core staff benefits. And clearly Zurich gets it right because employees typically stay for 15 to 18 years.

It’s about ensuring you’re protecting the wellbeing of your employees for them to be in the right frame of mind to deal with customers

“Benefits form a huge part of creating the culture of the organisation,” says Ms Farrell. “If you think about where we’re going in the future, and the blend between home and work, they add to more of a lifestyle choice that an individual might make around how they live personally, but also how they bring their whole life to work. It absolutely drives loyalty and morale.”

And accordingly benefits can be good for the bottom line in an even more direct way. Take two issues – the ageing workforce and growing cultural diversity. By offering benefits tailored to these groups, you can help attract and retain such individuals, so you can better reflect your market. “That helps us look at the UK from a customer-base perspective,” says Ms Farrell. “We can use that insight in an inclusive way to drive intelligence and build different propositions for different customers.” In other words, a more diverse workforce will spot newer, diversity-related business opportunities.

Then there’s the big sell – benefits help capture that ever-harder-to-find talent in the first place. “Ensuring that [the benefits proposition] is focused in the right way allows me to sell a story about what it’s like to work for Zurich. It’s not about coming in to do a job of underwriting; actually it’s about coming in to have an employment experience,” adds Ms Farrell.

Finally, she even regards the buildings her people work in as part of the benefits. “It’s about ensuring you’re protecting the wellbeing of your employees in order to be productive and for them to be in the right frame of mind to deal with customers,” she says.

Reasons why employers provide benefits

The impact of benefits

Mark Batey, an expert in organisational psychology from Manchester Business School and an adviser to Zurich, admits it’s hard to prove the efficacy of benefits per se. “There are so many other ingredients that go into the mix that teasing out individual effects of a benefits package is extremely difficult,” he concedes.

Looking at the example of, say, Facebook, Dr Batey points out: “We can’t infer causation from correlation. The question is: is it a positive working culture that means the company has better benefits? It’s often the case that the underlying factor is whether as an organisation you see yourself as primarily existing with the employees there to do a job for you, versus an organisation that sees itself existing for the benefit of its own employees.”

And that goes to the heart of your business culture and what Dr Batey calls a more collaborative, individuated approach to management. “It all needs to be joined up,” he says. “What we’re finding is organisations that get the whole package are much more likely to win the war for talent, to get the best people and to retain them.”

In his essential 1970 business bible, Up the Organisation: How to Stop the Corporation Stifling People and Strangling Profits, Robert Townsend had a few choice words on the subject of employee benefits. “True leadership must be for the benefit of the followers, not the enrichment of the leaders,” he wrote. “In combat, officers eat last.”

Also found in Morale Employee Engagement