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Reward communications need to improve, warns CIPD

The majority of employers in the UK could be pouring the money they spend on reward down the drain by leaving employees in the dark about the true value of the total package. That’s according to new research published by the Chartered Institute of Personnel and Development.

The CIPD/Benefex reward management survey found that more than a third of companies plan to increase their spend on employee benefits this year, but only 18% provide total reward statements and eight in ten offer no financial education to help employees understand the value of their pensions and other financial benefits.

What’s more, the survey revealed that the majority of organisations have not adopted a transparent approach to communicating information about pay scales, the provision of benefits and allowances, grading systems, job evaluation, performance-related pay schemes and how pay decisions are made for different individuals or groups of employees.

Charles Cotton, rewards adviser at the CIPD, said: “In order to attract and retain the brightest and greatest talent, the best employers offer attractive benefits packages to enhance base salaries. However, if employees don’t understand or value what they are getting, these employers are not likely to reap the competitive advantage they are seeking and other organisations will have no incentive to match them.”

Key survey results


  • Around nine in ten organisations contribute to an employee pension scheme.
  • Four in ten organisations plan to make changes to their pension schemes this year, but nearly eight in ten offer no financial education to their employees and only 3.8% plan to introduce it this year.


The most common universally provided benefits are:

  • Paid leave in excess of statutory entitlement (25 days, excluding public holidays) - 65.2%.
  • Training and career development - 65.2%.
  • Childcare vouchers - 62.7%.

The most common benefits restricted to certain grades or levels of seniority include:

  • Car allowance - 61.8%.
  • Company car - 53.8%.
  • Private medical insurance - 40.2%.

Flexible benefits

The most common benefits offered as part of a flexible benefits package include:

  • Dental insurance - 45.5%.
  • Cycle-to-work scheme loan - 43.6%.
  • Childcare vouchers - 41.8%.
  • Health screening - 38.2%.

A final word

“If rewards are used to motivate employees, or to encourage higher performance, then being reticent about reward communication does not make sense. Employers shouldn’t take it for granted that potential candidates and existing staff appreciate or understand the value of the pension scheme or perks such as subsidised meals, life assurance and critical illness insurance. Many employees will not look beyond their base salary and how far they can make it stretch from month to month.

“As we embark upon the biggest shake up to pensions since the state pension was created, employers will have a duty to communicate with employees about these changes and how they could benefit from saving for their retirement. What’s more, if employers apply that duty of care to their entire reward strategy, by improving employee understanding and awareness around the value of the entire breadth of benefits they offer, employers are likely to reap the benefits in terms of recruitment, retention, engagement and productivity.” - Charles Cotton, rewards adviser, CIPD.

“In the current economic climate employers will need to think outside of the box to create effective opportunities for engaging and communicating with their employees. With more businesses than ever looking at the implementation of retention and attraction strategies, it is key for employers to re-enforce the value that they place on their employees. It is therefore paramount to regularly communicate the full range of rewards and benefits available over and above basic pay and holiday entitlement. Total reward statements can be used as a simple, but cost effective engagement tool in support of these strategies.

“With auto-enrolment looming ever closer it can provide employers with an opportunity to create a significant level of increased engagement maximise the tools available and turn the complex into the compelling.” - Matt Waller, CEO, Benefex.

Want to know more?

Title: Annual Reward Management Survey 2012, Chartered Institute of Personnel and Development, in partnership with Benefex, May 2012.

Survey details: This is the eleventh Annual Reward Management Survey and is based on responses received from 455 organisations, across all industrial sectors. The research was carried out between February and March 2012.

Availability: The 57-page report is available to download in PDF format at www.cipd.co.uk/research.

The Chartered Institute of Personnel and Development (CIPD) is the “world’s largest Chartered HR and development professional body, setting global standards for best practice in HR”. It has over 135,000 members across 120 countries. For more details visit www.cipd.co.uk.

Benefex specialises in the “creation, delivery and support of strategic employee benefit solutions providing everything you need under one roof”. For more information visit www.benefex.co.uk.

Date 15/05/2012

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