EMPLOYEE BENEFITS
Providing valued benefits pays real dividends
A typical spend on the benefits element of the reward package often accounts for more than 20% of salary costs. But much of the money spent on benefits each year by UK companies is being squandered because employees’ appreciation, awareness and understanding of benefits is so limited, according to new research by Aon Consulting.
Aon discovered that fewer than one in ten of the employees it surveyed recognised the true value of their benefits package -- in fact 47% believed their organisation spent the equivalent of just 5% of their salary on benefits.
What's more, 27% of employees reported that the information they received from their organisation does not explain their benefits effectively or clearly. "Poor knowledge of the benefits available is an important key cause of the gap between the cost of benefits and their perceived value," says Aon.
Offering a comprehensive benefits package is a "win-win" proposition
The Aon researchers have developed a measure called the UK Workforce Commitment Index (WCI) to summarise the level of employees' commitment to their organisations. WCI assesses workers' productivity, pride in the company, intention to remain in their jobs, feeling of responsibility for organisational success, and their trust in its leaders.
As the amount of money which respondents believe their employer spends on their benefits increases, so too does their WCI. For example, the data the researchers assembled shows employees who believed that their organisation spends an amount equal to about 5% of their salary on benefits have a WCI score of only 86.5, compared to 102.5 for those who estimated the spend to be worth 30% or more.
In short, as Aon explains: "The organisations that spend more on benefits (which could include paid leave, pensions, insurance, childcare and other non-cash incentives) and, critically, whose employees realise the cost of those benefits, have a more committed workforce."
Want to know more?
Title: Benefits and Communication @ Work, Aon Consulting.
Methodology: The survey collated responses from 1,500 individuals from across the UK. Each respondent is employed in an organisation with 20 or more employees.
Availability: Contact Nessa Kearney in the Aon press office, tel: 020 7882 0067 or email: nessa.kearney@aon.co.uk
Aon Consulting is a leading human capital consultancy, "helping organisations to attract and keep the employees they need". The firm advises on all aspects of employment, including health-related insurance and risk employee compensation and pensions human resource strategy planning job design and change management and staff assessment and legal issues. To find out more visit www.aon.com/uk/en/
Posted 4 March 2005