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6 min read

When I think of famous mottos, I instantly think of the scout motto, be prepared. It’s only two little words, but these words have such power, guiding scouts around the world to always be in a state of readiness both in mind and body to do their duty. It’s to the point, and reminds you of exactly what you are trying to achieve.  

So my question is, shouldn’t our employee benefit principles do the same thing? Shouldn’t they quickly and easily create both the association and focus that we need to deliver the best ROI (return on investment) and/or VOI (value on investment)? Shouldn’t they define and stand for who we are as a company, focusing us to create employee benefits which drive and support our mission, culture and values? Getting your principles aligned is key to employee benefits best practices.

What do I mean by principles?

According to the Oxford Living Dictionary, principles should ”‘serve as a foundation for a system of belief or behaviour.”  

Essentially, your principles should serve as a sort of litmus test to hold all other aspects of your programmes up to, and like a motto, encapsulate our beliefs or ideals.

If your benefit principles don’t do this then they’re not holding up their part of the bargain, and like a faulty foundation, will make everything else fall apart!

To illustrate this, let me tell you a story about two companies. The story begins with the companies starting in exactly the same place — same industry (technology) and same benefit programmes. However, as you’ll see, based on their benefit principles they will come up with very different benefits and endings. So as any good story begins, once upon a time . . . 

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Company A

Let’s start with Company A, they created their benefit principles to align with their business strategy and objectives, considering those which would drive their business outcomes. These principles were:

Competitive - Compliant - Consistent - Cost-Effective

Company B

Company B on the other hand created their benefit principles to align with not only their business strategy and objectives but also kept in mind their HR strategy and objectives as well as their culture and values. These principles were:

Fair - Balanced - Choice - Wow - Easy

The main difference between the two sets of principles is that Company B’s have more dimensions, taking into consideration not only the business but HR strategy and culture. Company A’s, which I have to be honest and say that I’ve used more than once over the years, links to the business, but is missing out on these other dimensions and key factors.

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Where did they end?

Now let’s see how these companies’ benefit principles impacted the review and development of their benefit programmes. So that the story doesn’t turn into a novel, I’ve focused on two benefit programmes - parental leave and holidays/paid time off. For each I’ve shown what they were at the start, how they ended up, and how they aligned with their benefit principles.

The Benefit: Parental leave

Employees at both companies are currently entitled to three months of paid time off for maternity leave, and 2 weeks of paid time off for paternity leave.

The Results: Company A

They increased the benefit to six months of maternity leave and one month of paternity leave.  

Competitive Increased entitle so they compete with others in their industry in the attraction and retention of staff.
Compliant Checked that the new entitlement was in-line with legal regulations, ensuring it was compliant.
Consistent Made the change for all employees, ensuring it was consistent for all staff. 
Cost-effective Felt the change was cost-effective as it was necessary in order to compete for talent.

 

The Results: Company B

They increased the benefit to six months of parental leave for the primary caregiver and one month of leave to the secondary caregiver.  

Fair Moved to a gender-neutral parental leave policy to treat all employees the same, regardless of gender.
Balanced Increased entitlement so employees could balance the needs at work and at home, having enough time to do so.
Choice Gave employees the choice to decide how much time was right for them and what role they want to play in their child’s life (primary or secondary caregiver).
Wow Gave employees a wow but moving to a gender-neutral approach to parental leave, which made it a best in class benefit.
Easy Made the benefit easy and straightforward to understand.

 

The Benefit: Holiday (paid time off)

Employees at both companies were entitled to 23 days of holiday/paid time off per annum.

The Results: Company A

They increased the benefit to 25 days of holiday/paid time off per annum.  They also introduced the option to buy up to three more days each year.

Competitive Increased entitlement and introduced the option to buy extra days so they could compete with others in their industry in the attraction and retention of staff.
Compliant Checked that the new entitlement was in-line with legal regulations, ensuring it was compliant.
Consistent Made the change for all employees, ensuring that it was consistent for all staff.
Cost-effective Introduced the option to buy up to three days as there is no additional cost to the company, so it is cost-effective.

The Results: Company B

They increased the benefit to 25 days of holiday/paid time off each year.  They also introduced the option to buy or sell up to three more days each year.

Fair Made the change for all employees, ensuring it treated them fairly.
Balanced Increased the entitlement and gave them the choice to buy and sell holidays to ensure employees could balance the needs at work and at home.
Choice Gave employees the choice to decide how much time was right for them, allowing them to both buy and sell holidays.
Wow Gave employees a wow but moving to a best in class benefit.
Easy Made the benefit easy and straightforward to understand.
 

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And the winner is...

Well, unfortunately the changes in Company A’s benefits did little to impact attraction, motivation and retention, for although the employees appreciated the changes they felt they sent a mixed message as they didn’t align with what the company stood for through their HR strategy, culture and values.  

The HR team had been saying over and over again how important their people were and how they wanted to treat them as individuals, which is what had been done with previous initiatives. Employees wondered why they didn’t do the same with their benefit programmes, and this showed when many left the company to go to competitors.

Company B had a better outcome, which were employees who understood and appreciated how these new benefits were designed to support them. By giving them balance and choice they felt respected and valued, and this showed in their engagement and retention.             

So clearly, you’re hoping to be Company B. But how? My suggestion is to challenge yourself and your leadership team to develop benefit principles which align with all aspects of your business. Don’t forget about your culture and values, but also those tangible business goals and strategic decisions, when defining benefits principles. 

Author

Debra Corey

Debra Corey
Reward Gateway

Debra is our Group Reward Director at Reward Gateway. She's our Rewards guru, having over 20 years experience as a rewards leader, speaker, teacher and an author of a book on employee communications.

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