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UK law firms failing to leverage employee benefits

Failure to communicate workplace benefits costing firms £470,000 a year  

17 July 2013

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By Manju Manglani, Editor (@ManjuManglani)

Failing to tell staff about workplace benefits on offer is costing professional services firms £396.6m each year through increased staff turnover and sickness absence.

Research by Warwick Business School and Cass Business School has found that firms that have invested in good employee benefits but haven’t communicated them to staff are no better off than if they hadn’t provided the benefits in the first place.

It found that a typical organisation with 1,000 employees that offers good benefits but fails to communicate them spends £470,000 a year more on staff turnover and sickness absence than those that have comparable benefits packages but have good communications practices.

Published in Money Talks: Communicating Employee Benefits, the research is based on data from the UK government’s 2011 Workplace Employment Relations Survey and includes data collected from both employers and employees at 2,680 workplaces.

Communicating benefits

“Offering a great employee benefits package isn’t enough to promote wellbeing and financial security amongst employees,” said Peter O’Donnell, CEO of Unum UK, which commissioned the research.

“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.”

Added professor Nick Bacon of Cass Business School, who co-authored the report: “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.”

The research found that high benefit provider workplaces that are part of UK or EU-owned organisations are more likely to be poor communicators than high benefit provider US-owned workplaces.

Size also makes a difference in terms of effectiveness of communications among high benefit providers. Small organisations are more likely than larger organisations to be poor communicators, according to the research.

However, it also found that employees in mid-sized firms are the least likely to be aware of the employee benefits available to them, as they frequently suffer HR-related problems when their firms grow without sufficient HR expertise.

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