Employee benefits get personal as the workplace evolves
Forward-thinking employers are now going beyond one-size-fits-all benefits packages to offer highly personalised benefits, tailored to the individual needs and situation of staff members. These employers get a personalized benefit too: more motivated employees and lower staff turnover.
The trend towards hyper-personalised benefits has been driven by a greater desire from employers to understand their staff, bolstered by legislative changes that have forced firms to be more efficient in handling employee data such as the introduction of PAYE Real Time Information which forced them to send monthly data to tax authorities for the first time.
Even when offering a wide range of benefits, previously “everyone saw the same menu”, regardless of their age, gender or position in the company, says Debi O’Donovan, director of the Reward & Employee Benefits Association.
“But companies quickly realised that you can’t put people in a box,” she adds.
Benefit packages need to be redesigned to catch up with the changes to work that have occurred in recent decades, says Matt Macri-Waller, CEO of employee experience provider Benefex, such as the rise in flexible and remote-working. As such, benefits are becoming more lifestyle-orientated in response to the professional and personal situation of staff members, but also to reflect company culture and values.
Hyper-personalisation comes down to the things that individual employees want
“Hyper-personalisation comes down to the things that individual employees want, when they need them and accessed in the way they want,” he says.
For employers, there are multiple benefits to offering more personalised packages from boosting morale to attracting talent and staff retention. For Julian Smith, managing director of online retailer Bathroom Takeaway, these benefits are a way to both reward and acknowledge the individuality of his 73 staff.
“It’s about understanding what their lives and ambitions are and that they don’t need to go somewhere else to achieve those things. Our turnover of staff is incredibly low,” says Mr Smith.
Employee benefits include taking high-performing staff out of the office for days of activities and events, consumer discounts brought in through providers such as Perkbox, and access to physiotherapists and chiropractors through Simplyhealth, reflecting the company’s commitment to employee wellbeing. Even the firm’s approach to more traditional benefits is built to suit its staff: the business brought in pensions two years ahead of the autoenrollment date set by the government, and contributes 5% - far above the minimum 1% required of employers. It has just introduced a performance-related pay scheme, which will pay out in June and December - the two pinch points of the year for staff in terms of personal finance.
Lisa Forde, director of online stationery companies Dotty About Paper and Tree of Hearts, offers her 12 members of staff a range of benefits, from complimentary stationery to flexible working patterns and childcare vouchers.
It helps with their productivity and focus, and it helps with morale
“Different employees at different stages of life need different things. It’s about trying to accommodate that. It helps with their productivity and focus, and it helps with morale,” says Ms Forde.
Smaller firms may not be able to offer the highest wages or the biggest range of benefits, but creating extremely personalised packages can attract and motivate staff, she says. Indeed, while capacity may be the challenge for smaller businesses handling personalised benefits, for example there may be problems finding staff cover to facilitate flexible working or short-notice absence, it is potentially easier for owners and managers to understand their staff and build a suitable offer.
Technology is a must for large companies trying to scale hyper-personalised benefits to overcome the challenge of understanding potentially thousands of staff, says Mr Macri-Waller. Such software can analyse and cross-reference large amounts of employee data, for example, to provide real-time insights into staff needs and wants.
Issues can arise when employee data is held within different software and systems and regarding how that sensitive information is handled, especially when it is shared with independent benefit providers brought in to administer the packages.
As well as understanding how employee demands may differ across the company, large employers, in particular, need to successfully communicate what tailored benefits are available. “Unless your staff appreciate what you give as benefits it’s a waste of money,” says Ms O’Donovan.
A recent Reward & Employee Benefits Association survey suggests investment in hyper-personalised benefits will continue: 76.5% of respondents said there will be an increased focus on employee benefits by 2025. Elderly employees may be focused on pepping up their pension plans as state retirement provision becomes ever-more distant; younger employees may need help with record student debts or help to buy into an inflated housing market. Personalising benefits for this multi-generational workforce could be the next challenge.