How to realign benefits offerings with changing corporate culture

The following article was originally posted on the Mercer UK website.?You can find this article along with more benefits news content?here .

By David Dodd, Partner & Mid-Market Leader, Mercer Marsh Benefits

As the scrutiny of the outside world shifts beyond companies’ bottom lines to the “bigger picture” of their corporate culture and purpose, there’s increasing pressure on reward and benefit managers to ensure employee rewards reflect the wider corporate ethos.

That pressure has intensified with the growing focus on inclusivity, the emergence of new ways of working as a result of Covid, and an explosion of interest around corporate environmental, social and governance (ESG) issues and our responsibilities for the planet.

Certainly, at Mercer Marsh Benefits (MMB) we’ve been doing a great deal of work with clients keen to modernise their benefits offering. There’s nothing new in that, of course, but over time the emphasis has shifted from the traditional EVP focus on pay, benefits and pensions onto flexible benefits and culture, to employees as themselves now as ‘consumers’ of their organisation influenced by a strong sense of personal purpose.

That means prospective hires are not just looking purely at the value of pay and benefits on offer but rather assessing the full deal through the lens of flexibility and ability to personalise, and also in the wider context of the business as being a great place to work and an employer that shares their own personal values.

The challenges of the journey to alignment came through loud and clear at a recent webinar event hosted by REBA in conjunction with MMB. Interestingly, a snap poll of attendees revealed that while 77% of businesses represented had a publicly stated corporate purpose, less than 40% felt their employee rewards were fully aligned, while for almost half of attendees it was a work in progress.?

As such, health, risk protection and well-being benefits are far behind the reality of a diverse workforce.

Firms must adapt strategies and introduce benefits that support all employees, including people of color, women, LGBTQ+ individuals, veterans, immigrants, and people with disabilities.

Reflecting corporate purpose

For some businesses the process of alignment is relatively straightforward. Webinar panelist Amanda Webb of fitness clothing firm Gymshark explained that as a youthful health-focused business, Gymshark focuses on employee benefits such as provision of top-quality gyms and fitness programmes for its staff, as well as masterclasses in everything from social media to photography, “to help people become all they have imagined they could be”.

In contrast, fellow panelist Paul Johnstone of B2B digital services provider Orange Business Services faces a longer-established corporate culture, and a staff comprising many long-standing employees as well as younger ones.

He explained that Orange’s expertise lies in all things digital, and therefore that needs to reflect in its benefits offering. To that end the company has introduced, for example, a flexible benefits platform and a new app-based employee assistance programme.

However, as Amanda stressed, it’s not just the superior benefits you put in place but also how effectively you can encourage employees to engage with both existing rewards and innovations. She highlighted the importance for Gymshark of creative and marketing input in imaginative campaigns, one successful example being a recent push to get staff to increase their voluntary pension contributions.?

Tapping into ESG awareness

There is a lot of discussion these days around how corporate ESG targets can be translated into benefit offerings and EVPs. Some simple solutions are relatively easily incorporated – think company electric vehicles, Cycle to Work schemes, ESG-invested pension offerings –?but other initiatives such as carbon offsets for employees in the workplace are still at the early stages of the adoption curve with limited solutions currently available in the market today.

One way forward that chimes with the drive to flexibility and employee choice can be very simple: cash benefits. With their own ‘wellness allowance’, staff can select how they spend money on the ESG issues that matter to them.

A cash allowance is not without its own challenges for organisations, though. Small businesses in particular may struggle to afford the benefit provider’s full variety of rewards if there are only one or two takers for some options. It’s an area where providers need to be challenged to change their ways and stay abreast of employer requirements as they evolve.

Working with legacy benefits

Businesses recognise, of course, that corporate success depends on moving with the times; and the discussion focused on the importance of ensuring that benefits programmes do the same. Inevitably, though, this raises the practical question of the transitions: what to do with increasingly irrelevant rewards and how best to introduce timely new ones to ensure they remain fit for purpose and relevant.

There are several ways to drip-feed in new options, including phasing in a whole new benefits package for new recruits; encouraging staff to swap to new choices through targeted marketing, and simply substituting specific rewards with a more personalised, relevant offering.

But there may be a case to be made for a bigger piece of work to overhaul the package and review benefit scheme design more holistically. By engaging with staff and reviewing benefits data it is possible to re-evaluate and introduce a modern benefit program to align to the corporate purpose. By reshaping the benefits offering it is possible to remove outdated, unappreciated benefits and reallocate the cost towards a future focused digitally enabled benefit program that meets the needs of today’s workforce.

In today’s fast-moving world, employee benefits are an important shop window giving insight into the culture of an organisation. It’s never been more important to maintain a clear view.?

*Mercer Marsh Benefits is the brand name used by both Mercer and Marsh, who are affiliates of Marsh and McLennan Companies.