Every business has a duty to ensure its employees feel valued and supported in the workplace.
When organizations fail to do this, employees may become demotivated, struggle with their work, and eventually leave the business.
Traditionally, HR departments have offered a variety of compensation and benefits packages to recognize the important role that employees play in their business. These include everything from medical insurance to company shares.
But with the ongoing rise of new HR technologies, the way in which firms offer employee compensation and benefits packages has transformed significantly. UNLEASH spoke to HR leaders and experts about technology-based employee compensation and benefits.
Compensation and benefits must evolve
The rise of remote working during the coronavirus pandemic has transformed the relationship between businesses and employees, according to Gartner chief of HR research Brian Kropp.
However, with many companies likely to continue providing their employees with the ability to work remotely once the pandemic ends, he argues that compensation and benefits must change with the times.
As we move towards an era of hybrid working, businesses will need to continue to build deeper connections with employees to retain talent and maintain engagement.
Brian Kropp, Gartner chief of HR research
“Businesses needed to support employee wellbeing during a traumatic time to maintain productivity levels, while video meetings provided a window into their personal lives,” says Kropp.
“As we move towards an era of hybrid working, businesses will need to continue to build deeper connections with employees to retain talent and maintain engagement. The organization’s compensation and benefits package will need to evolve to support this.”
In the past, businesses focused on rewarding their employees with financial perks as part of their compensation and benefits packages. But Kropp says they should now be aimed at improving the life experiences of employees.
He tells UNLEASH: “Businesses should expand the benefits package to support families, communities, and causes close to the employee.
“Our research has found that deeper relationships with employees can lead to a 21% increase in performance. However, only one-quarter of companies plan to maintain programs introduced to support employees through the pandemic.”
Leveraging cloud technology and big data
Advancements in cloud-based HR systems mean that employers can better support employees by providing easy access to platforms and applications to manage the resources available to them, says Oracle HR business director Kealey Chapman.
She adds: “For instance, employees can view up-to-date information on healthcare policies from apps on their mobile device or even use on-demand payroll features to request pay ahead of their usual cycle.”
In addition to cloud platforms and tools, Chapman explains that HR departments can also leverage analytics and employee data to ensure they deliver the best possible compensation and benefits to staff. And, she notes, HR professionals don’t need to be skilled data scientists to do this.
“Simple dashboards can give managers a holistic view of the end-to-end employee experience, including information from departments such as finance and sales; creating an accurate review of regional salary benchmarks and retention trends to make sure talented employees are properly compensated across the business,” she says.
“As the driving force behind every organization, these tools are an essential investment to meaningfully support employee wellbeing and retention.”
The best of both worlds
Starling Bank, a UK-based digital challenger bank, has taken several steps to reward the hard work of its staff through compensation and benefits.
Susanna Yallop, chief people officer, says: “Last year we announced that employees would get shares in the company with a goal of allowing staff to benefit directly from business success.
“There are lots of perks designed to make working at Starling rewarding. We give two days’ additional paid leave for voluntary work, another day off on their birthday, plus a month’s paternity leave for new dads – which is above statutory requirements.”
Besides offering traditional perks like company shares and extra time off, Starling Bank is also using a range of digital solutions to provide additional employee compensation and benefits.
“To support employees as we work remotely we also created an online support and wellbeing platform called Never Home Alone which helps to connect people online through chats, seminars, and events,” she says.
“Additional staff benefits include Perkbox membership where you can get discounts from thousands of companies including gyms, shops, and service providers, a cycle-to-work scheme, and free private healthcare.”
A rapidly changing industry
The compensation and benefits space is going through a transition period where major forces are reshaping how HR professionals attract and maintain talent in the workplace, according to Forrester Research analyst Jonathan Roberts.
He says the future of work, the pandemic aftershock, the post-pandemic recovery, and employee power are exposing the need for another hard look at how compensation and benefits are delivered.
Roberts says: “In the past, utilization was oftentimes the most substantial benefits challenge. The question was “why are our employees not taking advantage of our benefits and what can we do to increase the rate in which our benefits are consumed?”.”
“New thinking has now shifted to “are we offering the right kinds of benefits to our employees and if not, how can we more closely align what our employees need, where our employees are consuming these benefits, and how the benefits are managed and delivered?”
His view is that employee-driven benefits programs have replaced organization-driven benefits, resulting in seismic change across the entire compensation and benefits industry.
“The principles that are driving next-generation thinking in the benefits space center around employee choice, comprehensiveness of benefits, and ease of use.
“Advanced organizations are trending away from traditional benefits and trying to align more closely to employee wellbeing,” he adds.
“The challenge then becomes, without investing in too many options, how do organizations know which benefits to offer that will have the greatest impact on their employees’ health and wellbeing?”
How technology fits into this changing space
Roberts points out that some organizations have utilized advanced employee listening tools and methods for better understanding the types of support their staff require in the modern workplace.
“These workforce listening exercises typically uncover nuanced preferences among different types of employees. Many organizations then struggle with prioritizing offerings and benefit configurations,” he explains.
HR departments are also adopting dedicated platforms for delivering employee compensation and benefits.
“Some advanced organizations are investing in benefit platforms like Fringe, which houses hundreds of employee benefit offerings that align with all of the dimensions of wellness,” Roberts says.
“Companies will release credits to employees (at regular intervals and as an incentive for performance) and each employee can then decide whether to use credits on a gym membership, a guided mediation app, a grocery delivery service, an online art class for their family, financial planning services, or hundreds of other benefits.”
Make benefits align with business strategy
Dominic Manley, UK technology product director of Aon, says organizations must align their technology choices with their business strategy in order to get the biggest impact out of employee compensation and benefits.
“This means technology has to deliver on every level,” he states.
“For employers, it needs to automate business processes – reducing risk and freeing up time for value-add strategic thinking by the team that knows their workforce. It needs to deliver strategic, decision-led data to help analyze, plan for and predict future change.”
Manley continues: “For employees, it needs a personal and engaging experience that caters for diversity, and helps guide people on their needs not only now, but thinking about their future goals.
“In our ever-changing world, it must be accessible when and how a user would like to engage.”
Businesses that provide their employees with fair compensation and benefits will no doubt continue to benefit from increased productivity, lower staff turnover, improved workplace morale, and more.
But what’s clear is that employee compensation and benefits packages must change with the times, taking into account a rapidly expanding remote workforce and new HR technologies.
Sign up to the UNLEASH Newsletter
Get the Editor’s picks of the week delivered straight to your inbox!