Adding value with agile employee benefits is the new goal for HR teams

Published : 3 years ago, on 29/06/2021

By Lara Mujico, Consultant at Proxima

The pandemic has piled enormous pressures on all workforces, and employers have been forced to review their benefits offerings with a new focus on the health and wellbeing of employees.

For HR departments, the challenge around affordability has remained while other new and unique challenges have arisen. These new pressures have combined and will require HR teams to engage with the procurement function, assess where cost efficiencies can be improved, and how the wider benefits offering can be optimised overall.

Isolated from their colleagues, some employees have faced increased stress, and new support systems have become integral to their wellbeing. This has driven a change in demand for new benefits offerings and HR teams must reinvent their programmes in line with shifting employee demands.

Traditional employee benefits programmes that have focused on perks like gym memberships, cycling schemes and social events have been rendered almost redundant. Few programmes have offered something new or exciting for some time, and demand in areas such as private medical insurance is forcing HR teams to roll out new offerings to retain staff and ensure they are able to operate at full capacity.

As a result, benefits programmes have risen rapidly up the agenda for the C-suite. In this new reality, employee benefits offerings will need constant investment and oversight to stay flexible, adaptable, and agile, as private healthcare and other offerings become a key area of spend with a growing emphasis on mental health and wellbeing.

So, what are some of the routes that businesses and HR teams can take to ensure their employee benefits remain fit for purpose and cost-effective?

Working collaboratively with employee benefit providers and brokers

For all organisations, employee benefits packages have been seen as an attractive recruitment and retention tool to ensure they are pulling in the best talent from an increasingly competitive labour market. Despite many companies using benefits programmes to holistically manage employee health and wellbeing, the market has not widely offered compelling solutions. But this is changing.

Significant costs will be drawn from private healthcare plans, so selecting the right providers and brokers has become essential to ensuring staff are at their happiest and most effective. The procurement function can add real value by ensuring the best partners are selected and by establishing the right relationship management framework with a clear focus on collaboration and cost-efficiency.

Benefit providers and brokers can add additional value by working collaboratively with the client to create a benefits package that aligns closely with their culture and their employee demographic. This collaborative approach has been essential to delivering benefits in the unprecedented environment that we have found ourselves in over the past year. When businesses have needed new robust benefits around mental health and fitness at home for example, working with benefit providers and brokers has allowed businesses to understand these new areas with confidence and select best-in-class solutions.

As a consultancy, we work alongside brokers to ensure they are effectively negotiating contracts with suppliers and that they are obtaining the most suitable packages at the best possible price. At Proxima, we leverage our existing relationships and expertise to help companies navigate these complex scenarios, and we help to ensure the client is benefiting from the best possible brokerage services that deliver value and solutions.

HR Alignment

Opportunities to drive better value go far beyond simply looking at commercial terms in supplier contracts. An interesting place to start is to work with the Benefits team to map out all benefits available to employees. We have seen clients offer a range of benefits that overlap and fail to be fully integrated with the wider HR strategy, and this is not uncommon for large organisations. A lack of coordination and a focus on quantity over the quality of benefits means there is commonly a lack of a cohesive benefits strategy. Businesses must consider how they can effectively develop and integrate an end-end global benefits approach that is closely aligned to the overarching HR strategy.

For engagement with the Reward and Benefits teams to work well, the procurement function needs to be able to demonstrate a strong knowledge of the reward and benefit category, as it can be broad and complex.

Businesses need to futureproof their employee benefits and HR strategies, ensuring their existing and future employee demographic are taken into consideration, maximising the effectiveness of their programmes.

Communication & Tech

 

Technology has been used to communicate benefits programmes for many years, but the Covid-19 pandemic has emphasised the impact technology and communication can have on driving employee use of benefits. Organisations across the globe shifted to remote working, IT departments rapidly rolled out new technologies and HR departments were suddenly required to manage employees working from home. This placed a new challenge on HR teams to work out how best to communicate their benefits programmes to employees, and what technology was required to do this. Covid-19 has highlighted that clear and easily visible communications are essential to maximising benefits’ usage. Communication and, by extension, the technology needed, potentially has the greatest influence on employee benefits programmes moving forward.

Adding Real Value

Company HR budgets are changing, and organisations must understand how to maximise the impact of these changes to get the best from their workforce. If companies hope to optimise their offerings, employee benefits programmes must be agile and adaptable for changing employee demands and preferences. They must look at their suppliers, how to align plans with the wider business, and how best to communicate offerings to employees. Procurement professionals will play a pivotal role to ensure businesses get the best from their benefits programmes.