The Increasing Value Of Benefits

Gallagher’s 2019 Organisational Wellbeing & Talent Insights Report examines approaches to compensation, benefits, retirement and employee communications that are associated with high-performing organisations. While every organisation is different, they all share one common goal — a healthy, happy and engaged workforce, but UK businesses face some big challenges in achieving this.

Although pay increases were better than expected in the UK in 2018, they were limited to a few sectors in which skilled individuals are in short supply. With 72 percent of UK organisations saying that they are planning on enhancing their benefits offering, it’s clear that leaders who aim to retain their talent based on pay increases alone know they will be left behind.

This is due to the changing values of employees, particularly with regards to saving for pensions, given that the median age of UK employees is 40 today, compared to 30 in 1974. At the same time, younger workers expect flexibility around 9-5 hours, with 89 percent of employees considering flexible working a key motivator of their productivity — more so than financial incentives.

In fact, laws on flexible working in the UK could soon change following a bill raised in Parliament this summer to allow all workers the legal right to flexible working, and employers could have to offer it in contracts by default.

Starting with an innovative approach to compensation and benefits, effective leadership and communication, the report finds that there are several actions leaders can take to achieve the right balance to manage talent effectively:

• CEOs must team up with their CFO and HR partners to ensure they have a competitive compensation and benefits framework in place, working together to communicate purpose
• CFOs must balance financial and talent risks as fiduciaries for the health of their managers and employees, which impacts the organisation’s balance sheet
• HR leaders must invest in internal communications that tackle issues employees care about, such as financial education related to student debt, pensions and flexible working
• They must also shift to a data-led model, drawing on performance metrics but also assessing each prospect’s creativity, curiosity, interpersonal skills and ability to innovate