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Employee benefits are more than a nice-to-have; they’re a lifeline that can revitalise a workforce, even when the cost of living is high and job mobility is higher.
Benefits can take a variety of forms, from free coffee and lunches to flexible and remote work, leadership and mentoring programs, and even childcare services. The right program looks different for every organisation and depends on employee expectations.
However, one thing is certain: a one-size-fits-all approach no longer works. To foster loyalty and productivity, businesses and HR leaders must listen to employees and be agile in tailoring benefits to give them what they want.
The second edition of Flare’s National Employee Benefits Index, completed in August 2023, draws on the voices of over 3,000 employed Australians from all industries, tenures, and demographics. It offers insights into employee engagement strategies, providing the tools for businesses to create an environment where employees are engaged, loyal, and motivated to give their best.
Key trends from the Employee Benefits Index:
- Benefits work, but fewer businesses are offering them: The right benefits mix makes employees 30 per cent more excited to go to work and can lower attrition rates to as low as 2 per cent. Despite this, fewer employers are offering benefits nationally, with 70 per cent of benefit categories decreasing since our initial study in April.
- Employees like flexibility, businesses don’t: The index reports a 16 per cent drop in the number of businesses offering flexible working since the initial study, despite employees considering it a top loyalty driver. This shows a disconnect between what employees want and what businesses currently provide.
- Employees are stressed: Financial pressure continues to top our list of stressors for Aussie employees, with over half (52 per cent) of the workforce affected, representing an increase of 4 per cent in six months. Pleasingly, financial planning support has increased by 12 per cent.
- Hybrid work continues: Public transport subsidies are up 12 per cent, although corporate social gatherings’ impact on loyalty dropped by 16 per cent – perhaps because of more stringent hybrid work arrangements.
The benefits mismatch
We know that the right benefits increase core engagement and productivity, but what are the most offered benefits and how many employees are using them?
Our research shows free coffee and snacks (offered by 68 per cent of organisations) are the most offered benefit, but employee take-up is fractional, and its impact on loyalty and engagement nears zero.
There is also a clear connection between financial benefits aimed at boosting take-home pay and improved employee engagement, productivity, alignment with management, and reduced stress.
However, the gap between businesses offering such benefits and employees’ desire for them is substantial. Less than 30 per cent of businesses provide pre-tax benefits, while almost 90 per cent of employees would choose at least one if available.
Why it’s time to take a proactive approach
There are many opportunities for businesses to provide additional benefits that employees want, but it requires HR departments to have the right approach to understand those benefits.
HR teams could increase the cycles of their employee listening engagements. While many businesses have increased the volume of employee listening from annual employee engagement surveys towards biannual surveys, implementing “pulse checks” could enable HR leaders to re-evaluate the types of benefits the business offers and adjust accordingly.
Another approach is to encourage a mindset shift when viewing salary packaging. As opposed to base salary and all of those benefits, an employee can convert them back into take-home pay and then divide that by their marginal tax rate.
With free platforms now available to help businesses, they’re applicable to more organisations than ever. It’s time to cast aside old objections, from price to a lack of ability to deploy them and recognise that employee benefits – when done right – are much more than mere perks.
Not only can they act as a buffer between economic pressures and emotional stress, but they’re powerful tools for creating a loyal, engaged, and resilient workforce, even in a competitive job market.
David Brudenell is the chief revenue officer at Flare.
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Benefits include any additional incentives that encourage working a little bit more to obtain outcomes, foster a feeling of teamwork, or increase satisfaction at work. Small incentives may have a big impact on motivation. The advantages build on financial rewards to promote your business as a desirable employer.
Jack Campbell
Jack is the editor at HR Leader.
