Getting the returns from your employee benefits strategy

Companies are going to spend more on benefits this year. Part of the reason is rising medical costs: data from big analysts Aon and Willis Towers Watson warns that the pandemic has so significantly changed the demand and delivery patterns of medical services, cost trends are going to outstrip inflation throughout 2022. Then there's the continued emphasis on health, safety, and employee well-being, which has seen employers around the globe making major strategic changes to their benefits approach – including developing more customised benefits strategies, investing more heavily in flexibility, and even overhauling workplace culture to make it more focused on well-being.

With this increased spend, the level of usage naturally comes under scrutiny. Before COVID-19, studies indicated that employee benefits often went under-utilised, usually because of insufficient awareness and understanding. And because many HR teams did not implement a way to measure takeup rates, this trend was largely ignored. However, the digital tools and platforms popularised in the last two years have made it significantly easier to track usage, and the focus on well-being has provided incentive to do so.

What makes a benefit more likely to be used?

On the surface, certain types of benefits have recently seen greater takeup rates. For example, telehealth services and mental or emotional wellness resources have seen very high usage over the last year, based on data from the corporate wellness industry which has recorded a spike in demand for these offerings. Similarly, statistics from the recruitment industry show that flexibility-related benefits are also in great demand, to the point where these have frequently become make-or-break points in employment negotiations.

Delving deeper, though, the takeup rate of any given benefit is less about its type and more about how well it is integrated into workplace culture. Some key factors are:

Communication and awareness is high

The overall usage of benefits has gone up during the pandemic, primarily because companies introduced new resources and communicated them more aggressively – particularly around mental well-being as leaders and HR teams realised the urgency of dealing with employee stress. Often, top leadership became involved in such communications in order to emphasise how seriously the company was taking it.

For example, Regan Taikitsadaporn, Chief Human Resources Officer of Marriott International for the Asia Pacific, told People Matters that Marriott used a concentrated awareness campaign to drive usage of the company's internal well-being challenge, 'TakeCare Level 30', and mental well-being tools sourced externally.

“We promoted both resources regularly through different channels, from word-of-mouth to executives leading by example,” he said. “Our leaders cultivated open lines of communication and encouraged teams to make the most of well-being resources.”

The use of the benefit is normalised

People are more likely to use a resource if they see that others around them are able to take it up. Leaders and managers can start the ball rolling, either by utilising the benefit themselves or openly communicating how they intend to do so, and they also have to create an environment where employees can do the same. This may often involve building a culture of transparency and reassurance.

Yvonne Teo, Vice President HR, APAC at ADP, pointed out that communications and transparent processes play a huge role in making employees feel more secure about using their benefits, even routine ones like taking leave.

“Trust goes a long way in ensuring that employees utilise their benefits,” she said. “They need to feel secure in the knowledge that it is perfectly fine for them to take breaks when they need to. Open communication and a collaborative culture that fosters teamwork will give employees the confidence to use their benefits.”

The benefit is provided in a way that makes it convenient to use

Just as digital tools see a higher takeup rate if they are easy to adopt, employees are more likely to utilise benefits that fit well around their work. Solutions to this include the refinement of technology and content, such as on-demand well-being resources delivered to employees' mobile phones, or adjustments to work schedules to provide employees with time specifically for benefits.

James Lee, Managing Director of Group Human Capital at Great Eastern, gave People Matters an example of wellness programmes clashing with work – possibly one of the most common reasons for skipping such resources – and how the programmes can be adjusted to accommodate people.

“We realised that last minute work demands are a possible reason for some to be unable to participate in our Life programmes (a voluntary company-wide programme covering financial, mental, physical, and social well-being),” he said. “This is most commonly seen for webinars. Hence, we always strive to keep these sessions succinct and in some instances, recorded for on-demand viewing anytime, anywhere.”

Some key actions for employers to take

Besides adjusting communication and delivery strategies around individual benefits, companies need to ensure that their overall workplace culture supports not just the idea and implementation, but the desired outcome of benefits in general – that being healthy and happy employees who are performing well and willing to stay with the company.

One good place to start is by training people managers in creating a supportive environment, whether by being flexible around benefits, or cultivating an open and transparent team culture, or simply taking the lead to participate in wellness programmes themselves. ADP's Yvonne Teo cited the example of educational workshops, a popular way of raising health and wellness awareness: if leaders and managers join, she said, employees will be more likely to believe in the health and wellness mission.

“It’s crucial for company leaders to attend these training sessions alongside employees, and to share how they plan to apply what they’ve learned in their own working life. Hearing this from their leaders can provide reassurance, and will help employees to understand that they do not need to compromise their health to get ahead at work,” she said.

Another important step is to keep benefits programmes up to date with employee needs. This can extend beyond the resources provided – sometimes timing and delivery has to be customised as well, as in the example from Great Eastern.

Marriott International's Regan Taikitsadaporn gave a few examples of how programmes might evolve to remain relevant at any given point in time: early in the pandemic, for instance, the team introduced mental health webinars to help employees manage their mental well-being. Now that mental well-being is less of a concern but economic recovery is underway, they launched a course to help managers handle challenges more effectively during turbulent times.

“Our programmes are planned based on our associates’ needs, where we actively conduct focus group studies and check in with our associates to mine for insights,” he said. “This has helped us achieve better takeup rate on our programmes, while allowing our associates to share feedback for us to co-create effective programs such as wellness and stress management, financial planning, and etc.”

Finally, the feedback loop is possibly the most important step. Although the outcome of benefits can be difficult to quantify, companies still need to make that effort to learn from their employees what works and what doesn't. Then they need to turn that feedback into change – whether adjustment of existing benefits or introduction of new ones – and monitor the effectiveness of that change, just as the effectiveness of a new product strategy might be monitored by sourcing customer feedback. After all, in the post-pandemic workplace, the returns on benefits strategies are not that far off from the returns on business strategies.