Benefits Industry – Where are we heading?

This week Employee Benefits magazine published their 2011 Benefits Book outlining the latest industry research. Whilst benchmarking research is a vital tool for monitoring trends in the industry, in this case the same research results are repeated year on year, with the same concerns raised and the same priorities outlined.

Staff engagement and appreciation are always named as key priorities for employers (in 2010 they were listed as the second and third issues respectively). Surely it is now time to make recommendations that help employers find a viable solution.

Understandably it will be more difficult for some organisations to engage staff through benefits appreciation than others. There is no ‘one-size-fits-all’ solution. Organisations need to maximise elements of the benefits package most relevant to their individual situation. This could be through using new communications tools to reduce costs, or ensuring investment is being made in the right benefits programmes.

I recommend turning this research on its head and looking at what employers have done to address these issues over the past year. This would give us clarity on what works. If a solution still hasn’t been identified then we need to concentrate on finding one, not measuring the fact that we haven’t.

This year’s research shows there are numerous efforts at cost cutting – a clear driver for businesses in a poor economic climate – but cost cutting needs to be a strategic driver which incorporates engagement. Employers are obviously trying to cut costs but my question is; are they rechanneling those savings in the right direction?

I was particularly struck by the fact that businesses are focusing on cutting costs but not necessarily aligning benefits needs/requirements with the strategic needs of the business. Operational strategies and tactical decisions are being taken in silos causing confusion between the interlocking, typically smaller operational strategies and overarching business strategies. Without this unity there is a risk that employers will direct investment and allocate cut backs to the wrong initiatives, when in fact they could be focussing on items that would achieve “desired future state” such as increased appreciation. The only way to realise desired future state is to truly grasp what is defined as a business benefits return on investment (financial and non-financial) within a specific organisation and direct resources (time, effort, budget) to full the gaps and achieve the success measures identified by your benefits strategy.

Priorities for employee engagement and motivation are centred on costs, but ignore the concerns around the effect this has on day to day employee motivation, morale and ensuring that employee messaging is always underpinned by UNDERSTANDING the part that they play in the success of the business AND what they can receive in return…..

If we don’t begin to move beyond a focus on cost reduction and concentrate on the methods (essentially a back to basics approach) used to realign benefit strategies with corporate goals and aspirations we jeopardise the value the board places on benefits.