Effective employee benefits will significantly reduce staff turnover and companies with the most effective benefits are using them to influence the behaviour of their staff and their bottom line, as opposed to simply being competitive, according to Mercer’s 2014 Australian Benefits Review.
Mercer’s latest Australian Benefits Review (ABR) found organisations with very effective employee benefit plans have a lower employee turnover rate at 12%, compared to the general market at 15%. Both voluntary and involuntary turnover was lower in these organisations. There are also generally more hours being worked, particularly by senior management where 43% typically worked more than 50 hours a week, compared to 25% across the market as a whole.
Mercer’s ABR investigates current market practice and emerging trends in remuneration and employee benefits. It is based on current data from 353 organisations and helps employers understand their competitiveness in the market place by analysing the effectiveness of benefits based on factors including staff turnover, and revenue growth.
The 2014 report found organisations with effective benefits have greater equality of provisions across employee levels; support employees work life balance, often beyond what is generally expected; and link benefits with desired business outcomes.
Leader of Mercer’s Talent business for the Pacific, Garry Adams, said, “On one level it’s simple, when employers give more they get more, but for real business impact, employers need to establish meaningful links between innovative benefits and the desired behaviour of their workers.”
“Today’s workforce holds the attitudes, values, and goals of four generations, which presents a massive challenge for employers to engage and retain workers to achieve business success. Offering stock standard competitive employee benefits will become a thing of the past and we are seeing this happen already.
“Benefits are often provided on the basis of ‘other companies do it so we have to’. Our analysis has proven you are much more likely to create a positive business impact such as increasing productivity and reducing staff turnover, by offering innovative benefits that address a specific outcome,” said Mr Adams.
Mercer’s 2014 ABR report revealed many employers offering innovative benefits including:
- Sustainable commute benefit: $10 for employees who arrive to work any way other than solo commute, reducing demand for car parks, decreasing the environmental footprint and boosting the health of employees if they get to work by walking or cycling
- Additional annual leave granted if all annual leave is used up each year, reducing leave liability on the balance sheet and the charge to the P&L
- Summer days: allowing employees to finish earlier on a Friday during summer, increasing morale and goodwill as the company extends their weekend
- Doona day: providing employees with an extra day off for personal replenishment and mental health
- Flexible workplace: unrestricted working from home where employees are trusted to decide on their most appropriate place to work depending on their work schedule while also considering their personal needs.
“Enhancing your benefits plan doesn’t have to be costly. Providing equality in your offering, more choice and flexibility and linking benefits to desired business outcomes are driven by management support, effective policies and culture – and not necessarily increased budget,” said Mr Adams.
Find out more about Mercer’s Australian Benefits Review here.
Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @MercerAU @MercerInsights