A FAILURE to tell staff about the benefits on offer is costing UK firms £2.7bn a year through increased staff turnover and sickness absence, Cass Business Schoolresearch reveals.
The research – Money Talks: Communicating Employee Benefits, which was commissioned by Unum – found that 64% of businesses have invested in good employee benefits but have not told staff what they are entitled to, Financial Director’s sister title Workplace Savings and Benefits reports.
It said this meant they were often no better off than companies that do not provide benefits at all.
The research found employees who are unaware of the benefits on offer are less loyal and productive, and as a result are more likely to call in sick or leave the company altogether.
Cass Business School professor Nick Bacon, who conducted the research, explained: “With the cost of living rising more quickly than many peoples’ income, and employers struggling for growth, staff retention is a vital issue. When organisations can’t easily increase salaries, they need to identify other ways to build staff loyalty – and a good benefits package does this.
“However, our research shows that even if companies are offering good benefits, if they fail to tell staff what’s available, it’s no better than not offering these benefits at all.”
Unum UK chief executive Peter O’Donnell added: “Simply offering a great employee benefits package isn’t enough to promote wellbeing and financial security amongst employees.
“Our experience shows that contrary to employers’ beliefs, communicating with staff about financial protection and well-being initiatives such as income protection and private medical insurance, leads to lower absence rates and reduced time off sick. Having an open dialogue between employers and employees about benefits builds a more productive and loyal workforce, and the bottom line benefits are evident.”
Cass Business School’s research found a typical organisation with 1,000 employees that offers good benefits but fails to communicate them – so-called “silent types” – spends £470,000 a year more on staff turnover and sickness absence than those companies that have comparable benefits packages, but have good communications practices, the so-called communications champions.
The research used data from the UK Government’s 2011 Workplace Employment Relations Survey (WERS) – and includes data collected from both employers and employees from 2,680 workplaces.
It demonstrates a gap in understanding between what employee benefits an employer provides, and what their employee thinks is available.
This communications chasm exists for managers, as well as non-managers. Strikingly, people that need employee benefits the most, such as working mums, remain equally unaware of what they are entitled to.
However, among communications champions who communicate regularly about benefits, sickness absence rates and the level of staff turnover is lower.
Employees are more likely to remain with a company where they know they will receive financial protection, and this has become ever more important since the recession began.