Employee benefits program benchmarks show that organisations could be missing out on financial value in the millions, both for their people and their organisation as a whole. The good news is that there’s a relatively easy way to close this gap.
When it comes to employee benefits, why do so many dollars get left on the table? For the most part, this is because employee benefits programs have been neglected and poorly understood by employees. Both these factors stem from HR teams needing to prioritise other areas ahead of employee benefits. Because employee benefits are highly regulated, with complex tax and compliance requirements, most organisations prefer to outsource to a third-party. The relative success of a program therefore can also rely on the scope and quality of service delivered by the program provider. This in turn introduces a third factor, the capability of employee benefits providers.
Perhaps it’s not surprising that employee benefits programs have slipped down the list of priorities. Human resources is a broad discipline, addressing a wide range of issues to maximise morale and performance of an organisation’s human capital. Added to this, is the fact that HR is often required to be the organisation’s safety net, ready to step in when things don’t go to plan. This combination of a long list of demands with a pivotal role in crisis management invariably means there are things that get neglected. For many HR teams one of these is the employee benefits program and this is particularly the case when they are increasingly being asked to do more with less.
Employee benefits programs are one of five ways an organisation can support their employee value proposition (EVP), the others being Pay, Affiliation, Work Content and Career. Salary packaging, health, work arrangements, and tuition are some of the more common types of benefits available. Individual employees will place different value on these elements and data held shows identifiable trends in preferences based on age and salary. This is why the choice of benefits on offer is an important factor in maximising EVP.
The COVID effect on employee benefits
Since COVID, working from home arrangements have become a more widespread benefit, with many employees looking to work some hours from home in a post-lockdown world. COVID has also had a major impact on other business conditions. Every aspect of the EVP has taken a hit, with the exception of employee benefits programs. As a result, employers and employees are turning back to employee benefits with a different mindset. As all stakeholders explore the opportunity to get more from employee benefits programs, they can become an unsung hero for the HR department.
Measuring the impact of employee benefits
As one of Australia’s largest provider of employee benefits programs, Maxxia is in a unique position to benchmark an organisation’s program against high performing industry norms. In doing so, we reveal interesting insights on the success of an employee benefits program. For example, the number of organisations offering a benefits program varies significantly between industries, with the public health industry topping the list at almost universal adoption. The public health industry also leads the way for employee participation, with varying levels for different organisations in the industry.
Another finding is that the range of benefits on offer has a direct impact on the perceived value and uptake of employee benefits. This is one of the underlying factors in higher participation rates in the public health and charity industries, which can access a wider range of fringe benefits for their people.
Our benchmarking data also reveals distinct trends in benefit preferences for employees within an organisation. Based on their age; those under 30, those between 30 and 45, and those over 45 have distinct patterns in their choice of benefits while there is no significant correlation found between gender and salary packaging choices.
We also know that employee awareness and understanding of a benefits program is a major factor in its level of adoption. This is one of the reasons Maxxia is committed to partnering with organisations to make employee benefits easier to understand and access.
Perhaps the most significant benchmarking insight is how many organisations have an underperforming benefits program or a non-existing one. While Maxxia has a long history of on-boarding organisations with poor program performance and turning programs around, we continue to be surprised by the value employers and employees are failing to realise through their benefits program.
Measure up with Maxxia’s Benefits Assessment
Unlock maximum value from your employee benefits program and ensure that you are measuring up to the best-in-class programs available.
Maxxia can measure the performance of your benefits program by performing a benefits assessment. This complimentary assessment benchmarks the effectiveness of your organisations program against other organisations, across different sectors and within your industry.
If you would like Maxxia to conduct a benefits assessment for your organisation please get in touch – it could potentially uncover insurmountable value for individual employees and even more for your organisation.