September 27, 2022
The pressure is on to do more to attract and retain the best talent in what has become a chronically talent short labour market. While we still need to pay market rate, and the culture, leadership and company purpose need to be engaging, benefits are playing an increasing role in helping staff stay, strive and thrive.
Growing up in the 1970s and 80s I fondly remember family events, gifts and other regular perks provided by my father’s workplace. The Christmas event in particular felt more like a carnival, with face painting, Santa giving out toys, other kids to play with and an afternoon BBQ in the sun. I also remember my mum attending many events, including business trips, with dad. We also enjoyed free healthcare insurance as a family.
In the days before Fringe Benefit Tax was introduced in 1985 there was a sense that companies were more family friendly and inclusive and there was more wrap around support beyond salary. We felt a connection to Dad’s place of work and the relationship seemed (to my young brain at least) far more than just where dad went to earn money.
Since those days, there’s been a steady erosion of the benefits offered by almost all companies, to the point of stripped back packages where there was little on offer beyond remuneration. I think employee/employer relationships became more transactional, more short term as a result, and that’s a shame.
The extra costs for FBT are just one reason. We’ve also seen:
NZ living costs have out stripped wage inflation: The unrelenting rise of property prices in particular has put the spotlight on cash in hand, to build deposits and repay mortgages, and is some cases, pay for necessities.
The growth of the gig economy: Whereby more people are hired in shorter term, outcome based assignments. A lot of project work in the technology and creative sectors is delivered by contractors, sometimes internationally.
Declining average tenures: As the pace of change increases, roles, structures and business priorities tend to shift faster too, driving higher turnover. It’s more likely to see average tenures of 1-3 years on a CV today, versus 5-7 years when I started recruiting 18 years ago.
I also witnessed the gutting of L&D departments following the 2008 GFC, along with the broadening of management roles to reduce costs. I suspect this lead to a general degradation of the investment in people and I wonder if this has also contributed to lower loyalty and therefore tenure.
However, here we are in 2022 and I feel like we’ve turned a corner, whereby employee benefits and strengthening the relationship between employer and employee seems are back on the radar again. There are a lot of HR policies being rewritten just now as a result. Why?
1. The pressure is on to do more to attract and retain the best talent in what has become a chronically talent short labour market. There is more effort in rebuilding the emotional connection between employee and employer. We still need to pay market rate, and the culture, leadership and company purpose need to be engaging too. But benefits are a further sweetener in helping staff stay, strive and thrive.
2. Mental health and wellbeing. Life seems to have got harder for many, with a sharp rise in anxiety, depression and burnout recorded. “Quiet quitting” is one term coined recently as employees attempt to rebalance their lives and regain control by stepping back from their unsustainable commitment to work. The upheaval of the recent pandemic has only accelerating this trend. Managers are today more aware of their responsibility in ensuring staff are mentally fit to work and have the support they need to thrive at work and home.
However, this time around things need to be done quite differently. For a start, it's just as likely these days to be Mum's workplace, if not both, given the increase in dual income families. But beyond this, here are a few suggestions from our many interactions across a range of companies and industries:
Team building, celebrations and events
There is a greater need to respect people’s personal time. More staff simply can’t or wont give up their personal or family time outside of work hours. Can you book things after hours? Yes, absolutely, just not regularly and without making allowances for those with dependents or who would incur extra stress and cost by doing so.
Flexibility over place and time of work
Every company simply has to provide some level of flexibility today. In fact, it’s almost impossible to attract talent without it. The amount offered should be based on understanding the minimum hours and office attendance to ensure customers, team members and other stakeholders are supported and collaboration can be maintained. Your decisions on flexibility should be consistent and transparent. We get that retail sales and other functions make flexibility harder, but we still see some progressive companies pushing the boundaries of what is possible in each role type.
Tailoring your offer
Benefits need to be genuine, meaningful and well thought-out. Employees see right through tick box activities and offers. They should also align to the needs of your work force demographics.
Our own benefits advisors, RIVAL Wealth, break benefits down into the following categories:
• Leave enticements and flexibility on working hours or work from home days and extended maternity leave – creating the ideal work life balance.
• Professional development – improving skills and setting career goals.
• Insurance – Health Insurance and Income Protection as well as life insurance are really valued. (Health is the #1 rated perk in New Zealand).
• Employee wellness – (mental, physical and financial wellness programs).
• Rewards, discounts and gifts – recognising work achievements or milestones are especially important, but special offers on day-to-day expenses are very welcome these days.
At Cultivate, we regularly review our total offering to staff. While we’re only 20 months old and feel we can still do more on this front, here are a few things we currently have in place:
• Work from home 3 days
• Full flexibility on start/finish time
• Fully paid health insurance
• Life, Trauma and income protection insurances
• EAP Counselling Services
• Work from home allowance
• Mobile handset allowance
• Birthday off
• 5 weeks annual leave
• Up to 12 months sabbatical
• 4 days study leave
• Paid parental leave, with option to return part time.
• Work anywhere policy
• Summer & winter vitamin and health gift packs
• Access to a financial advisor
• Boost App: With ongoing popular retail discounts
• Inclusion of partners in Christmas celebrations
• $200 monthly prize for monthly ‘Tu Meke’ award
• Monthly paid company lunch
• Bimonthly wellbeing seminars
• Quarterly ‘Cultivate the Mind’ Workshops – Guest speakers on topics to broaden our awareness on topical issues.
Valuing and promoting benefits
There are three very common mistakes when it comes to promoting benefits:
1. We don’t advertise them well enough when attracting new staff. I recently made an offer on behalf of a client. When I pushed him to consider what else his company offered beyond the base salary his response was “actually, let me just dig out a list HR gave me a while back”. What he emailed over an hour later was a really rich and comprehensive list of benefits which really helped demonstrate the company’s supportive and people centric culture. If I hadn’t pushed for it most of it wouldn’t have been communicated to their preferred candidate. I recommend engaging your marketers for help to promoting your offer in a compelling way, including video content.
2. Regular reminders of the benefits on offer to existing staff. I bet if you surveyed staff on the benefits they you offer many would have been forgotten. Keep reminding people of what you offer and how they can access them. We use an app called Boost, on which you can load all of your own benefits, but combine them with a comprehensive list of retail offers negotiated by the app provider. I means staff can see everything in one place.
3. Calculating the total benefit value. We recently went through the exercise of attributing a dollar value to all of our staff benefits to determine the total benefit value to staff. It was compelling and made it easier to demonstrate the total company investment beyond remuneration.
Reviewing your own benefit offering? Reach out if you’re looking for ideas of what others are doing, or connect with our own advisors, RIVAL Wealth, here.
