The changing global employee benefits landscape14.06.22
In conversation with our Global Benefit Leaders group, including Reckitt, Tesco, and Wise, about the hot topics on the global benefits leader’s agenda.
Our recent round-table discussion with our Global Benefit Leaders group provided some interesting observations. Led by Paul Andrews, our global benefits consulting director and James Hardwick, global delivery director (and tech expert), the conversation covered a broad range of topics from emerging trends to fragmentation.
Our benefits experts
Among the attendees were HR and Reward professionals from various industries including tech, pharma, retail and medical services.
Pain point #1 Fragmentation and a shift from traditional benefits
Benefex started the discussion by citing some statistics from its yet-to-be-released research into rewards with a particular focus on choice. The figures came from 4,000 interviews with employees of companies in the UK, US, India and Singapore about how attitudes have changed since the global pandemic and the impact on benefits.
Overall, 88% wanted more relevant benefits, 44% said their expectations of benefits had increased and, interestingly, the top five most desired improvements included choice and flexibility, increased wellbeing, protection, relevant and personalised benefits, and making benefits work for people.
This shift away from the typical benefits offering is evident across the board. Employees are demanding more; attrition rates are high; relevance is a key driver in satisfaction, and different countries have differing needs. Thankfully, data and employee feedback via surveys is more prevalent and, it seems, companies are listening.
Pain point #2 Regional, geographical and cultural wants and needs
One of the primary causes of benefits conundrums stems from the inconsistencies across countries and even regions. For example, one attendee commented that in their experience, employee benefits for South Africa and Dubai lack flexibility while employees in the UK and US tend to have more choice.
For those companies branching into Central and Eastern Europe, there is a very young, tech-savvy workforce and the attrition rate is enormous (rather than 14-15% turnover, it is more like 20-22%). Here, traditional benefits such as pension, life insurance, accident cover and even family perks are not popular; wellbeing, sports, leisure and, for one attendee, a shuttle bus to work are top priorities instead. This highlighted the fact that providing the right benefits regardless of cost can remind employees of the value they are getting from their organisation, and the focus is most definitely on personalisation.
As companies are rewriting their global strategies, we are seeing more of this across different geographies.
Pain point #3 Location influences benefit preferences
One of the things that became apparent over the course of the discussion was that location influences what people see as important to them.
A good example given was how car allowances in one country are more desirable than in others. An attendee with offices in Germany – a car manufacturing country – said that the vehicle model is very important, and employees expect that to be reflected in their benefits and rewards. They’re dissatisfied if the car they’re offered isn’t the right make or model.
Meanwhile in the UK, family benefits are irrelevant to young, single people, while those over 40 want family protection benefits such as income protection and life insurance.
New trend #1 Wellbeing is everything
We know this already, but how wellbeing is framed makes all the difference. Many of the roundtable attendees noted how wellbeing can be combined with leisure offerings too. In some European countries, for example, multi-sports cards exist and tend to be the main provision; however, for the Nordic regions, it’s a spa allowance that takes preference.
One participant commented that, in Eastern Europe, wellbeing falls under ‘leisure’ or ‘family’ allowance with the emphasis on encouraging family time and outdoor activities.
New trend #2 Relevance
The group recognised that the traditional benefits are never going away – but, instead, we need to think about what else we can offer. This can include small ticket items to help employees such as parking allowances, which are seen in some countries, gym membership or wellbeing allowances. We have seen an increase in a ‘lifestyle allowance’, which, while it’s like wellbeing allowances, has a broader range of accepted criteria for reimbursement including family activities.
The use of allowances can help companies to manage choice and flexibility across individual countries and demographics. A particularly pertinent example of a successful leisure benefit that came up was a company based in Ireland that offers free annual passes to Dublin Zoo, which really wraps around the ‘family’ piece but is relevant to all employees. They like this type of perk.
New trend #3 Global strategy refresh
While talking about new benefits increasing in popularity, attendees’ conversation moved to eco benefits. Bikes and electric cars are not cheap but, in the current climate, there is a rising interest. They are a popular alternative to tie in with a company’s environmental strategy and they also help with global commonality – yes, benefits need to be regional but having similar things that work across countries helps to tell the story more cohesively.
Benefex highlighted that one of its customers had a surprising take-up of tree-planting initiatives in India, even though the company thought it wouldn’t be popular. Carbon offsetting is also increasingly important to people. These benefits cost the employer very little but give people a choice and help them feel like they are ‘doing their bit’.
Clearly, there is an appetite for a reinvigorated benefits offering. Life cover, income protection and insurance can and should be offered as standard, but flexibility around this is crucial. Providing core benefits to everyone, plus several voluntary benefits that employees can choose for themselves, is an approach that we are seeing more of. Not only does this provide a ‘story’ and some continuity across cultures, but it also reminds people that their company is a cool place to work, which cares and puts them centre-stage.
In our experience, what we are seeing is a shift towards more flexibility and voluntary employee-paid benefits. At present, companies are busy reviewing their benefits, looking to future proof, making them more relevant and providing more choice. Leisure and wellbeing allowances, additional holiday buy, environmental benefits (electric cars, bikes, plant a tree initiatives) and discount portals are becoming expected – and demanded – options by employees.
As we move into the new normal post-pandemic, it will be interesting to see how things look in the next 12 months.
Do these challenges sound familiar to you? Would you like to hear more about how your peers are navigating this new post-pandemic benefits world?