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EMEA employee benefits communication survey 2015

11 February 2015 Ndivhuwo Manyonga, Aon Hewitt South Africa
Ndivhuwo Manyonga, Executive Head of Aon Hewitt South Africa.

Ndivhuwo Manyonga, Executive Head of Aon Hewitt South Africa.

Aon Hewitt survey shows that South African organisations are concerned about the effectiveness of their employee benefit communication.

Aon Hewitt, the global talent, retirement and health solutions business has released the findings of its EMEA Benefits Communication Survey for 2015. The survey collected responses from 1149 organisations across 28 countries, including South Africa, to provide an overview of trends in benefits communication across the EMEA region. This year’s report, the third of its kind, attracted more than double the number of respondent companies compared with 2014, adding greater scope to the results and demonstrating the importance that benefits play in attracting and retaining quality people.

According to Ndivhuwo Manyonga, Executive Head of Aon Hewitt South Africa, the implementation of benefits programs to retain talent and engage with employees requires significant financial investment. However, the real value of this investment is not being fully realised by organisations as employees do not always recognise the value of these benefits.

“It is interesting to note that the trends globally throughout EMEA are similar to those observed in 2014, including the fact that surveyed organisations are only moderately satisfied with the impact of their benefits communication. This shows that there is a need to reinvigorate the messages and channels in order to drive greater levels of employee engagement and understanding of the value of their total benefits package,” explains Ndivhuwo.

Furthermore, employee engagement is still a priority in many EMEA organisations when they communicate their compensation packages - a goal that could be reached by developing new approaches which are more impactful according to Aon.

“Many South African companies have very diverse workforces, from executives through to blue collar workers, so adopting a one-size-fits-all approach to benefit communications will fall short of objectives. It is essential that companies engage a diversity of channels from traditional print media, one-on-one engagements, through to multimedia channels and online portals to have maximum impact. It is also important that this communications takes place consistently and more than once a year in order to have a valuable return on investment. Stronger communication programs are essential in order to have an impact, but this presents many challenges as it is time intensive to plan and execute and some of the initiatives require funding. Most organisations try to handle this in-house although resources may be in-sufficient with no budget to execute the initiatives.

“Ideally organisations need to formalise their benefits program and delivering a structured communications program covering all benefits suited to various levels of employees. Tools such as Total Rewards Statements that provide a single access view of all benefits are an essential part of helping employees to understand the full value of their benefits, including seemingly hidden ones that are not necessarily financially obvious, such as special leave, study benefits, wellness programs and so on. In our experience the optimal approach is to develop a regular communication program that keeps the total reward – including benefits – top of mind for the employee. It effectively moves the focus from cash compensation to the total reward that the employee receives, which is something that South African organisations need to work on,” adds Ndivhuwo.

Over the past three years, companies have gradually shifted their position on communicating benefits and compensation, from a nice-to-have to a must-have element of HR strategy. In fact, in EMEA benefits and compensation programs are getting more complicated and expensive to design and implement due to accelerated changes and costs in the healthcare and retirement systems; a more diverse population and ageing workforce; coupled with increased competition. Today more than ever, it is important that employers provide effective communication to ensure a good level of understanding and engagement, and make the most of their investments.

In South Africa, a particular trend which is driving the need for better and more frequent communications is the move towards a ‘total cost to company’ remuneration approach, where the risk of providing for benefits is passed on to the employees. This trend increases the need for communication and education around benefits to support and enable employees to make informed decisions.

South Africa’s survey results found the following:

• 78% of South African organisations surveyed currently communicate their employee compensation and benefits packages; there are no immediate plans among the remaining 22% to do so. This shows a slight decrease on the 2014 survey, when 82% stated that they communicated benefits.
• 29% of organisations communicate several times a year; this also shows a decrease on the previous year, when 50% said the same thing.
• The main goals of their benefits communications are to respond to legal requirements and to manage costs and flexibility. Meeting legal requirements has increased in importance since the 2014 survey.
• Their three preferred communications channels are email, face-to-face presentations and employee handbooks.
• In future, they anticipate continuing to use employee handbooks, and supplementing these with email communications and online benefits portals.
• Only 33% have a dedicated budget for employee benefits communications, although these budgets are smaller than in the previous survey.
• Only 43% of those surveyed believe that their employees have a high level of understanding of their employee benefits communications.
• 71% of South African organisations manage benefits and compensation communications in-house.

South African organisations satisfied with the impact of their benefits communications share the following practices:

• Their main goal in communicating is to respond to legal requirements.
• Their preferred communication channels are employee handbooks and face-to-face presentations.
There is no set pattern for communications frequency among South African organisations who are satisfied with their benefits communications impact: this seems to be very much individual to each company.

Corporate South Africa spends billions of Rands on employee benefits each year. If one considers that benefits such as paid time off, medical aid, retirement funding, disability and life insurance, wellness programmes, incentive bonuses and so on can add anywhere from 25 percent to 50 percent to an employee’s annual cash compensation, it’s critical that benefits communication is effective, or you risk employees disregarding the ‘hidden value’ in their paycheques.

Aon Hewitt works with companies to integrate a marketing approach in their communication to employees, taking into account new expectations, changing technology and evolving communication approaches,” concludes Ndivhuwo.

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