The rising importance of benefits packages

Our reasons for going to work each day vary from person to person – some people have to work, while others simply want to. Beneath these reasons we all have personal motivations for selecting the work we do each day and the companies we choose to work for; salary, career progression, flexibility, pension schemes, private healthcare, holidays and location to name a few.

Your own motivations may include all or none of the above, but one thing that is certain is there always seems to be an endless checklist of what is important to us when deciding on our next career move. The recruitment world is changing before our very eyes. Conversations surrounding base salaries in isolation are a thing of the past and are now almost always discussed as part of a package including benefits. Of course, basic salaries remain an important factor when considering a role, but it’s important for us to look at the bigger picture.

Why are benefits becoming increasingly important?

Benefits packages are seen to improve well-being, which in turn is likely to improve performance at work. The average UK salary increase sits at circa 3%, whilst it’s nice to have (and often important to cope with rising costs), according to a 2017 survey by Aon Consulting benefit packages typically equate to between 20 and 40% of our salaries, and they can have a much greater impact on our lives. This is especially true in the case of benefits such as cycle to work and discounted gym memberships where an improved healthy lifestyle can reduce sick days and improve output. 
In an ever-changing social, economic and political environment our needs are constantly evolving, particularly in our work life. The range of benefits on offer to us have never been so vast, with many employers offering more than just the standard bonus, pension and healthcare packages but also options such as the ability to buy holidays, dynamic working, childcare vouchers and discounted shopping at selected stores. Having spoken with a number of active candidates within the market recently, it is clear that flexibility is at the forefront of many peoples’ minds. Research from our recent salary and benefits survey has revealed that some 71% of people rank flexible working hours in their top five most wanted benefits.
With advances in technology creating the capabilities for employees to work from home or on the move remotely, some employers are actively encouraging people to do so, as they recognise that most people’s lives do not fit the 9-5 working day. This is especially common in sectors such as technology, where a high-trust, high-performance culture has been developed with employees. Working from home on a regular basis often leads to increases in output and productivity as employees can work in a more relaxed environment with fewer distractions and the ability to work either in short bursts or at different times of the day to best suit their personal working style.
We have recently introduced dynamic working at Michael Page, enabling flexible working conditions for employees to undertake out-of-work activities during working hours. This approach to working encourages a more productive, more mature and more inclusive culture, which I have found to be both empowering and beneficial to my work/life balance, ultimately having a positive impact on my day-to-day work.

Attraction vs retention

Conversations with a number of senior supply chain professionals regarding their views on the value of benefits during a recruitment process found that there is a shift in emphasis as to what is important to individuals when they are in situ at an organisation compared to joining a new one. When searching for new opportunities, the general consensus was that candidates are initially attracted by the traditional benefits such as bonuses, pensions, holidays and healthcare, with the other peripherals not being deemed as deal-breakers. When it comes to candidates deciding whether to remain within their current organisation or seek employment elsewhere cycle to work schemes, flexible working and childcare vouchers, amongst others, were listed as top reasons to stay.
As we continue to trade through challenging economic times businesses are starting to realise the value of retaining their top talent, and this is often done through implementing ‘golden handcuffs’; benefits which often have repayment conditions attached to discourage employees from leaving. Within the procurement and supply chain market, the CIPS and CILT qualifications are becoming more universally recognised, and many employers funding their employees completing the course are inserting clauses around having to pay back the cost if they leave within a certain time frame. Again, the general consensus seems to be that this is an important reason to stay within a business, rather than join a new company.

Flexible benefits

Many employers are becoming more forward thinking when it comes to benefits, by offering more bespoke and tailored options to employees. From our research just 2/10 people are completely satisfied with their benefits package, highlighting the importance of allowing employees to select benefits that they would like and that they will be able to make the best use of. With 85% of people saying that a flexible benefits package would make a job more desirable to them and 62% of those surveyed saying they had not been offered one by their current employer, there is a huge opportunity to gain a competitive advantage in attracting talent through flexible benefits schemes.
Aside from the fact that flexible benefits are highly sought after by candidates, what benefit is there to the employer in offering this flexibility? It may sound expensive and like a lot of extra work for HR departments, but in fact, research undertaken by Mercer found that 46% of businesses incurred no extra costs in introducing flexible benefits and 36% claim to have actually saved money in doing so. When coupled with increased employee satisfaction and empowerment to make decisions which best suit their lifestyle, for many it seems like a no-brainer.
It is clear that by offering a competitive benefits package you are increasing the appeal of your organisation, which in turn will make any vacancies and job offers stand out to top talent when compared to competing businesses. The value of such packages is sure to rise as the working world continues to evolve and the competition for highly skilled professionals increases. 
If you would like any more information or to discuss how we can assist with your recruitment needs, contact your local Michael Page office. Alternatively, submit a job spec and one of our expert consultants will be in touch. 
Matthew Lewis
T: +44 1133 88 9033