People are one of the most valuable assets a company can have, particularly skilled and experienced professionals. The efforts of such individuals add value to the organisation on a daily basis, and make everybody's job - right through the organisation - much easier. As such, it is vitally important that businesses are able to retain their key staff members. Employee attrition hurts teams and organisations as a whole - not merely in terms of recruitment and training costs for their replacement, but also through lost productivity and reduced performance.
The question is, as an employer, what can you do to keep your top talent on board? Very often, there comes a point where it is impossible to retain workers in their current role - they either need to be promoted, or move to progress with their career. But the longer employers are able to keep their talent happy, adding value to the organisation, the better. They need to think about what makes professionals tick - how they can encourage them to remain loyal to their employers and engaged in their current role.
The value of flexible benefits
Pay is always likely to be an important determinant as to whether an employee stays with an organisation. But it is not necessarily the main reason. In many cases, the availability of tailored incentives and flexible benefits is likely to be equally, if not more important. Where employers run flexible benefits schemes, professionals can choose the incentives that most suit them. They may be given an allowance to use by their employer, or asked how they wish to be paid a proportion of their remuneration package.
Research conducted by the Chartered Institute of Payroll Professionals indicated that 85 per cent of workers rate flexible employee benefits as either "very important" or "important". The most common benefit offered was found to be pension contributions (77 per cent) followed by childcare vouchers (73 per cent). Some 49 per cent of organisations surveyed offered payroll giving, which allows employees to give to charity on a tax-free basis.
The Chartered Institute of Personnel and Development (CIPD) says flexible benefits schemes "aim to foster employee choice". According to the HR body, they are "formalised systems that allow employees to vary their pay and benefits package in order to satisfy their personal requirements". "Under true flexible benefits schemes, the dividing line between pay and benefits becomes less rigid than in standard reward packages," the CIPD explained. "In most schemes, employees are able either to retain their existing salary while varying the mix or levels of various benefits they receive, or to adjust their salary up or down by taking fewer or more benefits respectively."
UK employers offer flexible benefits
Research conducted by Mercer suggests UK employers are recognising the value of flexible benefits from a talent retention perspective. A study conducted across 12 European countries indicated that British firms are leading the way for employee choice in this area. Some 48 per cent of UK companies were found to provide options for employer-paid perks, other than or in addition to fully employee-paid voluntary benefits.
The vast majority of UK employers took the view that it is necessary to offer flexible benefits, with 80 per cent saying the main objective of their choice plan is to stay competitive. More than half (55 per cent) claimed that these schemes also help from an employee engagement perspective - meaning they have the potential to improve levels of motivation, and in turn, productivity.
Workers value having a choice
Commenting on the findings, Mercer UK's head of flexible benefits Kim Honess said it is becoming increasingly common to see employers offering a choice of benefits to their staff members. She said organisations are aiming to mark themselves out as an employer of choice - something which can give them an advantage in the recruitment market. "But choice in benefits is also an effective way to enhance employee satisfaction and commitment to the company by recognising differing needs," Ms Honess noted.
She claimed that employees perceive value in having a choice of flexible benefits, since they have the opportunity to tailor their own remuneration package according to their own needs, wishes or requirements. "With 55 per cent of UK respondents stating that employee engagement was their main objective, it is easy to see why flexible benefits are progressively seen as the means to boost this," Ms Honess added.
Do flexible benefits offer a return on investment?
Even the economic downturn failed to impact on most organisations' flexible benefits offerings, the Mercer study revealed. Some 62 per cent of the companies surveyed across Europe said the recession and its aftermath had not caused them to change their strategy in this area. In 13 per cent of cases, employers actually began to offer a wider range of choice - potentially to appease workers amid pay freezes and with redundancies taking place.
Of those who have introduced a flexible benefits programme, just 18 per cent believe it has incurred additional cost. Some 36 per cent of employers offered the view that they have been able to save money, while 46 said their scheme had been cost neutral. As such, this represents a win-win scenario for the majority of employers, given the potential of benefits packages to improve employee morale and discourage attrition.