REWARD MANAGEMENT
Survey finds reward communication relies too much on guesswork
Too few organisations carry out research to understand what their employees value in the reward package. As a result, the design and communication of reward programmes has a heavy reliance on guesswork rather than an informed strategy. That’s one of the main messages to emerge from a survey of HR managers and directors by Human Resources magazine in association with Vebnet.
The survey concludes that employers need to go the extra mile in communicating their employee benefits and tailor their plans to the individual needs of their workforce in order to make their benefits spend go further.
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Overwhelmingly, and worryingly, the main concern for HR professionals dealing with benefits is that “employees do not appreciate the benefits package,” the survey reveals. As many as 63.5% of respondents felt this is a major issue in their organisation’s benefits and reward offering today, and over a third (35.7%) put it as the number one concern.
Richard Morgan, director of consultancy services at Vebnet said: "The evidence shows how the effectiveness and appreciation of benefits is hugely reliant on personalisation.” But he added: “The research shows there are pockets of employers doing the right things, but there is also a disturbing polarisation between good and bad practice, with a sizeable number of organisations failing to leverage their reward spend through effective communication."
In fact, the research showed that only 38.4% of HR professionals said there was a clear consistent brand for all reward and benefits communications in their organisation. What’s more, almost half (47%) do not conduct any research into employees views and concerns regarding their reward and benefits packages, while one in five say employees do not know where and how to access information about their rewards and benefits.
When asked what they thought employees' main concerns were about their benefits provision, more HR respondents believed employees would “rather have cash than benefits” (with 43.5% saying it was their number one issue). Only 11% thought having flexibility of reward to meet the needs of employees was their top concern.
Other key results
Just 13.5% of companies say they intend to introduce a flexible benefits plan; 62% say they do not currently operate a flex plan.
Only 22.3% of respondents actually offered staff a total rewards statement.
Base salary effectiveness is by far the top priority when it comes to reward issues. Effectiveness/competitiveness of performance related pay, cost control and cost reduction are the next priorities.
38.5% of companies offer employees a “self-service” system for managing their own benefits – typically through a company intranet.
A final word
“More than a third of our respondents say they do not have a clear, consistent brand for reward and benefits communication, while 30% believe their communication does not reinforce the organisation’s culture, values and people objectives. No wonder a third say their number one benefits issue is that employees do not understand/appreciate their benefits package.” - Siân Harrington, editor of HR magazine.
“Within the survey, there’s incongruity between HR professionals recognising the importance of offering total reward competitiveness, coinciding with the organisation failing to master the necessary communication processes to ensure people understand the packages on offer. Many companies pride themselves on their great benefits and consider the overall package as essential in recruitment, retention and engagement. Yet, as the survey shows, HR people admit employees don’t understand what’s being offered, so these benefits are losing their value. There’s also evidence few companies are providing total reward statements, or online reward statements. Equally too few seem to be conducting employee research to find out how staff feel about rewards and benefits.” - Richard Morgan, director of consultancy services at Vebnet.
Want to know more?
Title: HR Reward Survey 2009, Human Resources magazine in association with Vebnet.
Survey details: Conducted during October and November 2008, the survey is based on responses from 175 HR directors/managers.
Survey sample: The majority of respondents were HR managers (49.3%), while a fifth were HR directors. As many as 86% of respondents were in the private sector; 14% were from the public sector, with the majority of these (a third), being local councils.
Availability: To download the 11-page survey, free of charge in PDF format, visit www.vebnet.com/hrsurvey.htm.
Vebnet is a “market-leading provider of technology and services for flexible benefits and total reward statements”. To find out more visit www.vebnet.com.
Human Resources is the “leading high quality magazine for senior HR decision makers and a must have for all the latest industry news, analysis and appointments.” To find out more visit www.hrmagazine.co.uk.