HR benefit programmes finding a lack of traction at UK businesses

Benefits remain a crucial part of the package employers use to attract and retain talent. New research finds that topics such as salary and remuneration are making strides up corporate agenda's. HR departments are, however, running into difficulties regarding the development and deployment of plans, from lack of resources to lack of will from management, even while the implementation side tends to go relatively smoothly.

Changing expectations from millennials about company values and the beginning of the baby boomers' retirement boom mean that attracting and retaining talent is likely to become more difficult in the years to come. While employee pay remains a key means of attracting and engaging employees, benefits are more and more often required for employees to join a company and to stick around. In a new report from LCP, titled ‘Thinking smarter: Insight into employee benefits from HR decision makers’, the consultancy firm explores what 100 HR professionals are currently thinking about changes within the benefits ecosystem.

Strategy drivers

The survey highlights that leveraging benefits as part of a wider business and HR strategy remains relevant to the business agenda. At 54% of organisations surveyed, benefits are moving up the business agenda, at 26% it is already high on the business agenda and at 17% it remains static on the agenda, while for 3% of organisations it has moved down.

According to the respondents, the main drivers for benefits to feature highly on the agenda are that organisations need to be seen as supporting people (48%), the organisations needs to be market competitive (43%), and the organisations needs to become a more attractive employer by increasing benefits choice and flexibility (41%).

The survey also asks respondents about the importance of various conditions surrounding HR benefit packages as well as the satisfaction of the organisation’s performance in bringing about alignment. 90% of respondents said that it is important that employee benefit packages align with the overall business strategy, while 46% of respondents are satisfied with their businesses performance in the area. Measuring the contribution to the business made by employee benefits packages and initiatives was cited as important by 76% of respondents, of which 21% said that they are satisfied. Future proofing employee benefit packages was cited as important by 80% of respondents, with 41% satisfied with their organisations’ efforts in the area. Across all three categories combined, 16% of respondents were satisfied.

According to respondents, HR professionals face a number of issues performing their respective roles around the development and offering of benefit packages to staff. Top of the list, as cited by 67% of respondents, is that they lack a budget to fund development work for making changes, while 64% of respondents say they lack budget for the funding of required contribution levels to the benefits.

Additional problems faced by HR are cited as lack of management/manpower within the HR/benefits team, IT/infrastructure constraints, lack of senior management buy-in for change, and making a strong business case for benefits. Other problems cited by respondents, included a lack of appetite for change at the organisation, diversity of the workforce, lack of clear responsibility for benefits, and trying to find/source new benefits.

Respondents were further asked to describe their company’s current and long-term priorities around benefits. According to the surveyed HR experts, the top current priority (cited by 47%) is dealing with pension changes and knock-on effects from benefits, while 41% expect it to be long-term priority. Employee wellbeing and mental health comes in as the second to top current high priority, as cited by 40% of respondents, while 46% of respondents expect it to become a long term trend.

Longer term trends, with lower levels of current concern, include enhancing the user experience, as cited by 54% of respondents, and exploring new technology for delivery of benefits, as cited by 47% of respondents – 29% of respondents do not, however, believe that this will become a priority at all.

Strong implementation

Furthermore, the survey asked respondents to rank how satisfied they are with their project processes regarding employee benefits packages. 22% say that they are dissatisfied with the scoping/planning stages of their most important employee benefits projects of the past two years. 68% are satisfied (or better) with post-launch follow up of the rollout of a package, while 72% of respondents are satisfied (or better) with the execution of the launch. 74% say they are satisfied (or better) with stakeholder engagement.

This highlights that while strategy surrounding employee benefits tends to be problematic for HR departments, the actual implementation phase of benefit programmes appears to be going relatively well at the organisations surveyed.

About the report’s findings the authors remark, “HR decision makers are keen to align benefits to the business needs, whilst at the same time ensuring that measurements of success are agreed with all key stakeholders at the outset. Most respondents are also looking to use technology to future proof their benefits package better understanding the needs of their employees.”

Another recent report on the HR landscape, by accounting and consulting firm EY, found that HR technology is becoming increasingly important as an enabler for benefit programmes, as well as for human capital objectives in general.