Your reward strategy was built for a world that no longer exists

Most organizations are aware their benefits offering isn’t working as hard as it should.

Often their uptake numbers are low, and few employees have the full picture of what’s on offer.

With the best intentions, HR will frequently throw more money at expanding their program, only to end up back at square one.

This misdiagnosis problem is long-standing and must be resolved, especially when financial pressures across organizations continue to intensify.

New data from Benifex’s research spanning seven countries, 7,000 employees and 600 HR leaders shows that 64% of employers globally say they’ve expanded their benefits offering in the past year.

Yet only 32% of employees have noticed, with the remainder feeling that their benefits have stayed the same, that they’ve been reduced, or that they don’t actually know how the offering has changed at all.

This perception gap exists not because employers aren't investing, but because the architecture through which benefits reach people is archaic.

The problem most likely isn’t that your benefits offering isn’t appealing, but rather that your design and delivery needs a serious rethink.

Employees aren’t noticing benefits and neither are the board

As budgets tighten, organizations are having to interrogate their spending more closely.

For HR teams, the pressure to prove ROI on benefits is ever increasing. Yet it’s often a difficult task because boards and HR teams measure success differently.

63% of HR leaders say the business case for benefits, and the HR technology that supports them, fails to land because the value isn’t expressed in the financial metrics that boards and CFOs prioritize: costs and productivity risk.

Meanwhile the HR teams, who are there with employees on the ground, can see the less ‘commercially’ measurable benefits, such as improved employee wellbeing and increased engagement.

When benefits are fragmented and hard to find, it can be challenging to articulate the ROI story, because employees aren't experiencing the value that would make that story a reality.

Employees with access to modern, integrated benefits technology are significantly more likely to report satisfaction with their overall compensation and benefits.

Reported satisfaction can be turned into measurable statistics the board actually responds to, such as the correlation between benefit usage and employee productivity.

To make the board care about providing a great benefits package, you need to show them exactly what it’s going to do for the wider business and how it meets the wider aims of the entire board.

Moving the ROI conversation out of HR and into the C-Suite like this is increasingly critical to do.

AI is raising the stakes

A common assumption in boardrooms is that AI will reduce the importance of reward and compensation, on the basis that fewer people means a lower cost base.

However, our research suggests the opposite; when headcount falls and workloads pile-up, the people who remain have to carry more, and work becomes more intense which becomes a long-term structural issue.

Employees face greater performance expectations and more pressure, and organizations find themselves more dependent on those individuals rather than less.

This makes the benefits that support employee work and life, more important than ever in keeping them healthy, engaged and productive.

Research shows that in organizations where health and wellbeing is prioritized alongside AI adoption, productivity and performance gains are as much as 15% higher than in those where AI is implemented without parallel investment in employee support.

Yet 64% of HR leaders say decisions about AI in their organization focus primarily on productivity gains, with wellbeing as an afterthought.

Organizations need to put the right infrastructure (like personalized benefit and wellbeing platforms) in place to support employees who are the primary drivers of AI gains..

Pay transparency will expose whatever you haven't already fixed

Pay transparency has become an increasingly pressing issue, too, particularly with the passing of the recent EU Pay Transparency Act.

This is having a direct impact on HR teams – 97% of HR leaders globally say pay transparency will meaningfully test their organization.

However, only 37% say they are fully prepared to explain and justify differences in total reward.

Pay transparency will expose deeper structural issues in how organizations design, govern, and communicate pay and reward more generally.

Like AI, culture plays a significant role here too.

Only 34% of employees are confident their employer would handle greater pay transparency well. 80% say it will only build trust if organizations act on unfairness, not just explain it.

Again, this is where design really matters.

When employees can clearly see and understand their total reward, through accessible benefits information and the right technology, they are better placed to recognize and understand the value of what they receive.

That understanding helps to build a culture of trust that transparency demands.

Organizations that build the right infrastructure that allows for 100% transparency will be in a much stronger position when transparency requirements land.

What HR and Reward leaders need to do differently

This might sound easier said than done, but here are three things that you, as a HR lead, can take away and begin to action:

• Measure behavior, not just spend

Track which benefits are actually used, by whom, and when. Spikes in uptake and persistent non-engagement reveal far more than budget reports – and let you design benefits around how people really behave, not how you assume they do.

• Treat benefits delivery as strategy

How benefits are communicated and integrated into the employee experience is a strategic decision. The right infrastructure, like a modern, integrated benefits platform, will let you tailor that experience to your organization and to individuals, making the value proposition clear.

The focus should be on removing points of friction in the journey, from access, to understanding and post enrolment experiences too.

• Speak the board's language

Don’t just focus on enrolment rates, retention data, and absenteeism metrics. Lean into what your primary stakeholders require. Show how benefits drive higher productivity gains, and attract more of the right talent to your organization.

When HR teams connect benefits investment to what the board is interested in - growth, service and risk - we unlock greater credibility and budget. That same data also puts you in a stronger position as pay transparency requirements land.

The key lesson is this:

The HR leaders who understand that reward, benefits and compensation is just as much about design, infrastructure and delivery as it is the actual benefits on offer, will have more engaged employees, less wasted spend, and easier comms with their key stakeholders.