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Article information:
To cite this document: Terry Pegg, (2009),"Creating engagement through employee benefits", Strategic HR Review, Vol. 8 Iss: 2 pp.
5 - 12
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http://dx.doi.org/10.1108/14754390910937521
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Creating engagement through employee
benefits
Terry Pegg
Abstract
Purpose – The potential impact of employee benefits on individuals and their dependants is significant
and growing as new products and solutions come on to the market. The aim of this paper is to investigate
how benefits impact on employees and the organization as a whole, and how organizations are
choosing to inform their people about the type of benefits on offer.
Design/methodology/approach – Research conducted by AIG UK Benefits seeks to provide an
insight into the current employee benefits environment and in particular to the areas highlighted above.
Terry Pegg is based at AIG
The research consisted of a two-stage study undertaken by the AIG UK corporate research and
UK Benefits, London, UK. development team between November 2007 and January 2008.
Findings – The study highlights the differences between the perceptions of employers/HR
professionals and employees when it comes to the awareness and understanding of the benefits on
offer and asks whether employees are really to blame if they fail to appreciate the true value of their
employers’ voluntary employee benefits.
Originality/value – There is an opportunity for HR to improve benefits communications. The study looks
at how one UK retailer has successfully implemented a strong communications program and presents
steps that employers and reward professionals can take to improve their own benefits communications.
Keywords Benefits, Communications, Incentive schemes, Employee behaviour
Paper type Case study
he range and scope of employee benefits are growing rapidly and the products that
T are available in today’s – and tomorrow’s – benefits market have the potential to
impact on nearly every aspect of an employee’s life. To manage the positive impact of
employee benefits within an organization, the effective delivery of benefits solutions needs to
be a virtuous circle. For benefits to make a positive impact on an individual, the individual
first needs to be aware of and understand the benefits their employer currently offers.
However, to communicate the advantages, scope and potential impact of employee benefits
successfully, organizations themselves need to understand their people, what they want
from individual products and their motivation to acquire them.
DOI 10.1108/14754390910937521 VOL. 8 NO. 2 2009, pp. 5-12, Q Emerald Group Publishing Limited, ISSN 1475-4398 j STRATEGIC HR REVIEW j PAGE 5
About the AIG UK Benefits study
The research incorporates findings from a two-staged study undertaken by the AIG UK
corporate research and development team between November 2007 and January 2008.
VEBs are defined as benefits employees have access to through their employer. Employees
are required to pay for these benefits themselves and they are available to staff in addition to
core benefits, such as company pensions and healthcare cover.
Stage one of the research included a qualitative study comprised of 10 interviews with HR
managers and two focus groups of employees, exploring current themes and issues relating
to the awareness, perception, selection and communication of employee benefits offerings.
Stage two was a quantitative online survey with HR managers and individual employees to
verify the issues emerging from the qualitative stage. The research sample included 150 HR
managers, all of whom are involved in the selection and communication of employee
benefits in the workplace, and 500 individual employees, all working for companies offering
standard (core) and voluntary employee benefits.
Respondents in both stages of the study work with organizations employing over 250 people
and offering both core and voluntary benefits. Over one quarter of respondents in the
quantitative stage worked in organizations employing over 5,000 people.
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PAGE 6 STRATEGIC HR REVIEW VOL. 8 NO. 2 2009
Figure 2 Interest in and usage of VEBs
professionals have to communicate better; both their reasons behind benefits offerings and
the advantages of benefits take-up for individuals.
This position is further supported by figures suggesting that although 80 percent of
employees report they find the concept of VEBs appealing, 38 percent said they had no
interest in taking out the VEBs offered by their employer in the near future. This signals that
although employees welcome the provision of benefits (and are keen to learn more and
become involved in the selection process), what is on offer is not compelling, engaging or
relevant. Or, more importantly, is not being communicated clearly enough to prompt action
and take-up on the part of employees.
j j
VOL. 8 NO. 2 2009 STRATEGIC HR REVIEW PAGE 7
Figure 3 Employer and employee engagement in benefits selection
The research confirms how easy it can be for employers to misinterpret the effectiveness of
communication channels when it comes to talking about benefits. Figure 5 compares
employee awareness of communication channels against those used by employers.
The findings show that employers use a wide range of channels to communicate the
information employees need about company benefits schemes. However, there seem to be
some inconsistencies between which channels employers and employees consider to be
the most effective at communicating benefits – see Figure 6. Both employers and
employees tend to agree that the use of company Intranet, company benefits booklets and
communications in pay slips increases awareness. But communications through the
employers’ most favored channel – employee induction – is seen as one of the least
effective by employers.
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PAGE 8 STRATEGIC HR REVIEW VOL. 8 NO. 2 2009
Figure 5 Communications channels usage and awareness
The qualitative research uncovered a tendency for employers to rely on the channels that are
most effective at reaching employees quickly and easily. When prompted on the efficacy of
communicating messages, HR managers in the qualitative stage stated the channels most
effective at reaching employees were not necessarily the best at getting the message
across. When the time and cost constraints of marketing company benefits are taken into
consideration it is clear employers veer towards an information push approach.
j j
VOL. 8 NO. 2 2009 STRATEGIC HR REVIEW PAGE 9
‘‘ HR’s perception of employee interest does not match
employees’ actual usage of benefits. ’’
However, the quantitative findings also indicate that an information push approach using
channels that reach the maximum number of employees will not maximize awareness and
understanding of the benefits on offer. As a result the importance companies place on
boosting employee loyalty and motivation through benefits is not fully realized; clearly a
different approach is necessary if employers want to improve benefits take-up and increase
employee engagement with the benefits on offer.
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PAGE 10 STRATEGIC HR REVIEW VOL. 8 NO. 2 2009
such as text messaging and social networking sites. However, regardless of which new
communication channels we introduce, it remains the case that variety is key for continuing
to successfully consult and engage with our people about benefits.’’
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VOL. 8 NO. 2 2009 STRATEGIC HR REVIEW PAGE 11
7. Step back and review what you’re doing
Taking time to review your offering and asking others for their opinion is a key step in the
process of offering the ‘‘right’’ benefits and communicating them in the ‘‘right’’ way. This
opportunity to refresh key messages about available benefits will ensure they remain
targeted and applicable to your changing workforce and their evolving needs.
Reference
CIPD (2007), ‘‘Employee benefits: an overview‘‘, CIPD Factsheet, Chartered Institute of Personnel and
Development, London, February.
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PAGE 12 STRATEGIC HR REVIEW VOL. 8 NO. 2 2009