John White on why effective communication around employee benefits is key

We all know that an attractive benefits package can help employers recruit, motivate and retain the best people for their business. But the effective communication of these packages is crucial if employees are to understand and value the benefits on offer.

How do online systems help?
Most people have access to a computer, giving employers an interactive, simple and convenient method of communicating with their employees.

While the use of online benefits platforms is still relatively uncommon (with only 11% accessing their benefits via a flexible benefits scheme (Source: Edenred), the functionality has developed significantly in the last few years and platforms will play a key part in addressing the challenge of improving employees' understanding and interest in benefits, whilst reducing administration from the employer's viewpoint.

For many companies, the initial driver behind the use of online platforms is the pension scheme, but the growth of salary sacrifice type benefits such as childcare vouchers, cycle to work schemes and health screening has increased the range of benefits without the cost implications for employers. Once a platform is in place, it opens up the ability to expand the range of additional benefits, some of which come out at no cost to the employer. The most common is the ability to include a retail portal which offers significant discounts on everyday services and goods from well known high street brands to specialist internet retail providers – an immediate and more attractive benefit for some, sitting alongside details of the more traditional employee benefits.

Platforms provide one point of reference for all benefits provided, holding copies of policies and procedures and effectively expanding the system to supplement and complement any existing HR portals. Simplicity, flexibility and affordability – all in one place.

Total Reward Statements
Payslips and annual pension statements are commonplace, but why tell your employees about only part of
what you do for them? The concept of Total Reward Statements is not new, however the ability to demonstrate to employees the value of a benefits package and not just their salary is becoming increasingly significant.
With pay increases being few and far between, the need to emphasise the value and derived benefit of the non-salary element is important for the motivation and retention of employees. It is very rare for an employee's Total Reward to only include basic salary and will typically be made up of a combination of salary, performance related incentives, bonus, benefits and many other components.

A Total Reward Statement is an effective and powerful method of communicating the value of an employee's total remuneration package quickly and accurately. They allow employers to issue an online or paper statement showing an employee the value of their total package. Statements are personalised to the individual and include only those benefits an employee is eligible for. The statement also shows the valuation of the benefit as it applies to them for that year.

These statements can be a powerful part of a reward solution and add huge understanding and value in their own right. They also allow the company to move to total compensation management with the long-term budgetary advantages this brings.

As the online platform market has developed, the choice and flexibility available to employers has increased. The modular nature of the platform allows employers to launch different components at times which suit their business, as the business grows or the HR strategy evolves. This staged approach allows the reward brand to be introduced to the employees and
at the same time gets them used to using the technology platform which will ultimately deliver more effective engagement.

John White is head of financial management at RSM Tenon
www.rsmtenon.com

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