Two-fifths of employers not measuring impact of benefits, according to research

Experts warn companies that fail to take stock of which perks are adding value are ‘only doing half a job’

More than two-fifths of employers are not measuring the impact of the benefits they offer, as experts warn of a “general failure” of HR professionals to collect feedback from staff on their benefits policies.

A poll of 500 HR professionals found that 42 per cent of employers were not taking stock of what benefits were most valued by their workforce, potentially missing out on valuable insight into the return on investment from their benefits spend, new research suggests.

Similarly, 22 per cent of employers admitted their biggest challenge was knowing what benefits to offer staff.

The survey – conducted by Group Risk Development (GRiD) – also discovered that, despite this lack of visibility, more than half (58 per cent) of respondents continued to fund ongoing benefit commitments.

Katharine Moxham, spokesperson for GRiD, said firms that failed to measure staff sentiment over benefits provided were “only really doing half a job”.

“Offering them is one thing, but it’s crucial that employers know which ones are adding value to their company,” she said.

Duncan Brown, head of HR consultancy at the Institute for Employment Studies, said the results were another example of the “general failure” of HR and reward managers to evaluate the effectiveness of pay and benefits policies.

Brown said: “HR should be considering other measures such as cost effectiveness, flexibility, risk and impact on turnover/retention. 

“General engagement surveys simply don't provide this information and, in our talent and resource-short economy, it is vital that HR invests their pay and reward spend in the most effective way to recruit, retain and engage staff.”

Debi O’Donovan, director of the Reward & Employee Benefits Association, echoed this sentiment, warning that benefits were not an off-the-shelf, tick-box exercise. “More work needs to be done about checking benefits are effective with better communication and analysis of the take-up data,” she said.

O’Donovan added: “There needs to be less time spent on the benefits themselves and more time on communicating them, and doing the ROI work.”

Sophie Wingfield, head of policy and public affairs at the Recruitment & Employment Confederation, said candidates today were looking for much more than just a good salary, and that a great benefits package was essential for employers to attract the right people.  

“By measuring staff appreciation of benefits, companies can improve their offering and be more successful in bringing in the staff they need, particularly in a candidate-driven market,” she said.

“Employers should also work with their recruitment partners, as they can provide valuable insight into the job market and the demands that candidates have.”

The survey from GRiD also found that larger businesses performed better at measuring staff appreciation of benefits. More than three-quarters (76 per cent) of large businesses – those with more than 250 employees – were measuring staff appreciation of benefits, compared to just 48 per cent of SMEs.

Tony Dobbins, professor of HR management and employment relations at Birmingham Business School, said the choice of benefits and the amount provided often depended on the differing circumstances of employers and employees.

“Larger employers with specialist HR practitioners and employee representatives generally have more resources and expertise regarding employee benefit provision compared to smaller employers,” he said.