By Clare Bettelley 3rd October 2016 3:00 pm
The initial personalisation of employee benefits can be traced back to the 1980s, when the term referred to employers offering staff a wide choice of benefits to take up, typically on a flexible or voluntary basis, in the hope that they would appeal to at least some of their workforce.
But now personalisation refers to a precise, data-driven approach to benefit and reward strategy design that ensures that perks are relevant to individual employees who are, therefore, more likely to take up and value them.
As part of this evolution, employers are becoming more of a facilitator of benefits, whereby they offer staff access to a wide range of benefits that can be personalised, such as nutritional or DNA testing, and which can therefore add value to their workplace experience.
Alastair Woods, partner in the reward team at PricewaterhouseCoopers (PWC), says: “[The] personalisation [of benefits] is about employers providing some level of customisation to individual employees and not just groups among their workforce, but within an existing framework, rather than offering radical choice. Choice allows employees to extract value.”
Advances in technology have been instrumental in enabling employers to customise their benefits proposition. Employers are now able to access and mine data from their benefits portals relating to, for example, benefits take-up trends, which they can use to inform their benefits selection for staff. Mark Ramsook, a senior consultant at Willis Towers Watson, says: “Without technology, it’s unfeasible to consider how employers can manage benefits data, identify trends, and track and enable the purchasing process [of these benefits].”
Technological development is also benefitting employees in the form of increasingly interactive benefits portal interfaces. Employers’ previous static platforms that stored benefits information in the form of PDFs have been transformed into portals that allow employees to create and personalise their own user accounts from which they can select their preferred benefits. Increasingly, staff in many organisations can flex the value of these benefits up and down, and perhaps even extend access to perks to close family members.
“Choice allows employees to extract value because where there’s choice, there’s more understanding,” says Woods. “Employees are putting greater value on something that’s relevant for them.”
As well as strategy, many benefits can be personalised, such as company car schemes. Organisations can work with company car providers to enable staff to define everything from their budget to the type of seat covering and engine that they want for their car.
Similarly, health and wellbeing benefits, from health cash plans to dental healthcare, can be personalised by staff. Kirsten Samuel, managing director at health and wellbeing services provider Kamwell, says: “By having choice and flexibility at their fingertips in regards to health and wellbeing, employees can feel truly supported, empowered and energised to take control of their wellbeing.
“I have experienced so many instances first hand, where employees have told me about the difference their organisation’s health and wellbeing programme has made to their lives, not just as a means to ‘fixing’ a health problem. It offers an opportunity to enhance their wellbeing, enabling them to thrive in their personal and professional lives.”
Creating this sense of empowerment is key for employers keen to increase employee engagement and become an employer of choice. Nicky Moffat, director at What Good Leadership Looks Like, says: “Empowerment benefits organisations because it enables the collective and creative power of [employees] to be mobilised in line with a common vision or goal.
“[Employees] who are empowered have ownership of outcomes. They can use their expertise, initiative and skill to complete tasks and feel a much greater sense of satisfaction and value than if they had simply been told what to do.”
Personalised working practices also help to empower employees. Flexible working is a case in point. Martha How, reward partner at Aon Employee Benefits, says: “Empowerment is about staff management and about, for example, [employers] asking employees how they want to work and allowing employees to carve out their own working time.”
Standardised benefits approach
Perhaps the biggest obstacle to more employers taking this approach is the desire for standardisation for which many organisations, particularly larger multi-national entities, strive across their benefits policies and systems.
Peter Reilly, principal associate at the Institute for Employment Studies, says: “Frequently, [employers] want to signal that everyone is part of the same [organisation] with harmonised terms and conditions. Standardisation is also cheaper to operate [for employers]. Both tendencies militate against personalisation.”
Clearly, there is a long way to go before more organisations embrace the modern definition of personalisation, but change is afoot, particularly around reward, given the bearish economic climate and consequent lack of pay rises.
“We’ve got to a place where there’s a head of steam and pent-up frustration [among employees] with reward generally, [because] it hasn’t really changed, says PWC’s Woods. “It has always been about salary, a bonus if [employees] are lucky, a pension and some core benefits, but I think in the next few years we’ll start to see a greater array of choice.
“Now, more than ever, there is a greater need for the customisation of reward because of the diversity of the workforce coupled with the [downturn in the] economic cycle.”
This diversity, be it in the form of age, culture, religion or life choices generally, therefore needs more than a generational segmentation exercise across organisations’ communication strategies as employees demand more of a consumer experience from their employers.