Long reads

Why the most effective employee benefits don't have to cost you anything

22 Aug 2019 By Elizabeth Howlett

Businesses are ending their obsession with the quirky and quixotic, in favour of ‘lifestyle’ benefits – including more time with those who matter

For those who are equally concerned and amused by the rise in workplace benefit gimmicks, a Manchester-based travel agency may well have provided the apex of our obsession with the bells-and-whistles approach to employee engagement.

In 2017, Invasion decided to transform its offices into a giant ball pit. More than 250,000 of the items were pumped into unsuspecting employees’ cubicles, giving them a ‘fun surprise’ when they turned up for work.

Invasion offers other benefits besides and is clearly a fun place to work. But for the business press – and the slew of providers who have a vested interest in helping companies outdo each other in the race to diversify their benefits offerings – it’s all about the balls, as they continue to champion ever more unusual and, arguably, more ephemeral ideas. Google has picked up plenty of column inches for its promise of free onsite haircuts, while Netflix has joined the bandwagon of unlimited holidays. 
What such employers demonstrate is that we are still collectively in thrall to the idea of the perfect perk. 

But the reality on the ground for most is that after years of outdoing competitors, the market is coalescing around an idea most experts have always espoused: that a smaller number of genuinely valuable core benefits make far more of a difference. And those need to be tailored to suit employees’ most pressing needs, says Lizzie Benton, founder of Liberty Mind, a company culture consultancy that works with SMEs. “A lot of organisations do the traditional gym memberships, food boxes and fruit bowls, but many don’t seem to address real issues with employees,” she says. 

Changing that means adopting a two-step approach of first understanding what employees’ concerns and pressures are at work, then accommodating the things that matter outside the office. Whether it’s financial instability, trying to juggle family life and work commitments or seeking out opportunities for personal development, benefits that address work-life balance or wellbeing are arguably more desirable than finding your workplace has been transformed into an adventure playground.

This is reflected in the statistics. According to MetLife, the use of wellness programmes more than trebled among employers between 2015 and 2019. And plenty of employers now view a flexible work policy as a genuine benefit, even if it hasn’t been valued as tangibly as pensions, cars or cycle-to-work schemes in the past.

“For the first time in history, we are in a multi-generational workforce, which means there’s a real clash in terms of what benefits matter to people,” says Benton. “It’s too easy to get sold into a fix-all ‘cool and trendy’ perk package that looks good but does nothing for your staff.

“Trendy benefits don’t help the employee with their overall life, and certainly don’t help the employer in recruiting a more engaged, driven workforce. We need to look at what people actually want and what would help with their work-life balance.” 

According to the CIPD’s 2018 Reward management survey, seven in 10 senior reward and HR professionals now offer staff flexible working opportunities and half have a formal work-life balance policy. Charles Cotton, the CIPD’s senior performance and reward adviser, points out that addressing these issues means fundamentally shifting away from the notion that working harder is more important than working smarter. 

“There is a recognition among HR professionals that work-life balance and flexible working policies are important, and employees value them. It’s a case of how you do it in a way that also benefits the organisation,” he says. “If you talk about work-life balance, the important thing is how it is implemented by line managers. Given the appropriate training and support, work-life balance can be effective in transforming values and behaviours to be more positive.”

MetLife says the proportion of employees taking an active interest in work-life balance has increased 11 percentage points in two years, while AON’s Benefits and Trends Survey 2019 found 95 per cent of employers agreed that employees’ expectations of their working experience were changing, as they now prioritised flexible working hours, agile working, mental health, diversity and inclusion and parental leave above questions of pay or perks. 

Professor Tony Dobbins from the department of management at Birmingham Business School notes that benefits promoting employee-friendly practices are increasingly valued and effective: “There is a pressing requirement for employers and the state to do more to invest in affordable childcare facilities, to satisfy demand from working parents. Furthermore, parental leave provision beyond the statutory minimum has become increasingly valued.”

That has certainly been the experience at Fletchers Solicitors, whose benefits platform and flexible working policy have undergone a serious overhaul under director of people Tim Scott. When he took the helm in 2017, the Southport-based firm’s workforce had grown by 290 in five years, which complicated the flexi-time system it was already running.  

In what Scott describes as a ‘cottage industry’, it worked on a time-in-lieu formula. Any additional hours accrued beyond contracted time could be used towards one full day per month off, plus longer lunch breaks and early finishes – but this was driving the wrong sort of behaviours. 

 “It had created an atmosphere of clock-watching to the point where people would argue about a minute or so delay in signing in,” says Scott. “We had feedback from some team members that although they valued the flexibility greatly, they found it had become overcomplicated.”

He found that the problem had rooted itself within company culture by creating a ‘parent-child approach’ to managing time, and set out to move instead towards an ‘adult-adult’ situation that enabled greater flexibility. 

The wider benefits platform was also tailored to suit employees’ needs, with attractive high street discounts and other benefits such as cycle to work, tax-efficient company cars, financial advice and the opportunity to purchase extra holiday.

But Scott believes it was flexibility that made the difference, and says communication is key for a smooth transition: “We briefed all managers personally and gave them a pack of information to direct their teams, which helped ensure everyone received a consistent message. The feedback we had was that it was one of the best communicated change programmes we’ve ever undertaken.” 

Benton says changing employee benefits shouldn’t be a top-down, command and control situation and instead should be a collaborative effort between members of staff at all levels. “It’s unrealistic for an organisation to add a benefit without any employee contribution,” she says. “It would be naive of employers to assume they know best. If they can get feedback and ideas from their team, it can give a good idea about what benefits will actually get used.” 

Failing to seek out feedback before a package is put in place is a common pitfall when rationalising benefits and can lead to disappointing ROI, not to mention unhappy staff. But Debi O’Donovan, director of the Reward & Employee Benefits Association, advises that the picture can be more nuanced and that low take-up rates don’t necessarily mean a bad benefit.

“Look at what you have on offer and if your staff are using it, and be sensible about your take-up rates,” she says. “The take-up on a particular benefit could be low, but that may be in line with average rates, so check with the provider first. Some benefits may have a huge take-up rate but may not be benefiting you as a business – it has to be viewed in context. 

“Before you do anything, talk to your staff. The advantage here is that if you reduce the number of benefits, they can be used as ‘champions’ going forward to promote the big ones.” 

Dobbins notes that employers can always be tempted by the idea of a benefits ‘pick and mix’, but it is important to integrate their offering with the overall organisational strategy: “It should arguably not only be measured by employer-focused financial performance, productivity, employee engagement and recruitment and retention criteria, but encompass wider public good measures of employee welfare, and work-life balance benefits for families and local communities. 

“Such broader social measures of success could help enhance the ethical and community reputation of progressive employers.” 

While we are a long way from being able to deem which benefits are truly the most effective – since there is no standard measure for what sort of ROI this should even rest on – it seems safe to assume the hype around more gimmicky benefits is drawing its last breath, at least for now. So if you’re approached by someone offering you a rock-bottom price for 250,000 used plastic balls, just say no.

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