Uncover your ‘hidden pay cheques’
Here is a frequent paradox we come across when we speak to prospective clients. On one hand, few dispute the value – and even tell us they are investing more in – benefits for their employees. On the other hand this well intentioned and hard fought investment isn’t being realised to the full extent by employees.
Recent data from Income Data Services shows that as the cost of living rises at more than twice the rate of salary increases, many workers are now in effect accepting pay cuts.
With perceptions that take home pay is failing to go as far as it did in the past, reward and recognition programmes are an ever more valuable part of employee remuneration.
It seems a shame then that the paradox between the scale of benefit scheme provision and levels take up continues at a time when you would be expecting every employee to make each pound in the pay packet go further.
The issue here is simply one of education. It is often the case that employees just don’t see the value or cost effective aspects of their benefits packages, particularly with voluntary benefits packages. They are simply hidden from view.
Of course, frequent and targeted communications play a role in educating employees but smarter organisations can bring alive the unrealised value of working with a specific organisation beyond their salary and their employee benefits packages through a Total Reward Strategy – effectively a way of unlocking the intangible but valuable aspects of working for an organisation.
In the current environment it is critical for any employer when talking about remuneration to go beyond the wage slip and remind people of the full range of benefits whether these are financial – such as share schemes – or non financial such as investment in learning and development or health and wellbeing. The full extent of the benefits is in effect a hidden pay cheque that a lot of employees too readily forget. There are other ways to reward people in difficult times which will benefit everyone – you need to know what these are and talk about them.
Organisations need to create a Total Reward culture using education and communication. An online or printed Total Reward Statement can be the pinnacle of a Total Reward communication programme but it should never be delivered in isolation. Some organisations issue TRS thinking they have delivered a Total Reward Strategy when in fact it runs the risk of confusing people or devaluing the intention of the statement.
Voluntary benefits, especially lifestyle discounts can be communicated in a TRS showing the employee what they have saved through a straight discount, cash back or tax and NI savings of salary sacrifice benefits like pensions and childcare vouchers. The way it works is simple. A TRS outlines the total benefits package for each individual including any savings they are making through voluntary benefits schemes. With this approach more people will see the range and value of schemes on offer such as discount shopping vouchers which can significantly reduce weekly shopping bills and day-to-day expenses.
Employees who use these schemes can fully maximise the hidden pay cheque – a valuable addition to employee finances when money is getting tighter.
So if you are in one of the many organisations out there facing the prospect of delivering a real terms pay cut to your employees remember that happy employees who are free of financial stress perform better. So if you want to deliver better performance and engagement in your organisation in the next year make it your job create a Total Reward strategy and culture to unlock the hidden pay cheques in your organisation.
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