It’s important for any business to measure the outcomes of the employee benefits packages that it has in place. As a business, if you don’t measure the results of your employee benefits programmes, then it is difficult to formulate a clear strategy for such programmes. You need to know that your employee benefits packages are meeting certain objectives and business goals.
Part of the reason that so many businesses don’t measure the outcomes of employee benefits schemes is that they simply don’t know how to collect data on it. Here, we explain how companies can do exactly that.
The need to focus on outcomes rather than ROI
It can be difficult to accurately work out the financial return of employee benefits for an organisation. This is why we companies may benefits more by focusing on outcomes instead of return on investment (ROI). Alison Pay, Marketing & Operations Director at Mental Health at Work, argues:
“A number of studies over the years have tried to evidence ROI along the lines of: for every £1 spent you get anywhere between £4.00 to £9.50 back. But these tend to be big studies and not company specific. This kind of analysis is very difficult to achieve on a company level. Outcomes, on the other hand, are much simpler: what do you want to achieve? And have you achieved it? That’s all there is to it.”
Employee key performance indicators
A vital aspect of measuring outcomes of employee benefits is the level of employee engagement in a company. Employee engagement has always been quite a tricky thing to pin down and measure. Nonetheless, there are certain indicators of employee engagement that can be measured and provide invaluable insight into the outcomes of your employee benefits programmes. One example would be employee key performance indicators (KPIs). This includes measurable indicators such as average task completion rate, revenue per employee, profit per employee, overtime per employee, and employee capacity.
Another reliable way to measure the success of employee benefits packages is to take into account staff turnover rates. If employee benefits are translating into reduced staff turnover rates, then this is linked to other key components of your business goals, such as reducing losses (e.g. the time and cost of training new employees), greater employee engagement, satisfaction, and loyalty, and higher profit margins.
It’s inevitable that employees will become ill from time to time and have to take time off from work. But absence statistics do also vary widely from company to company. And they can be influenced by an organisation’s employee benefits strategy. For example, if such a strategy undervalues or ignores employee wellbeing, this can lead to an increase in absences related to poor mental health. If, on the other hand, your employee benefits include flexible working opportunities or wellness and health benefits, this can translate into improved employee well-being and, in turn, fewer work days lost due to issues like stress, anxiety, and depression.
Employee satisfaction surveys
One clear way of assessing the outcome of your employee benefits strategy is to conduct employee satisfaction surveys. There is some dispute as to how useful such surveys can be. But this is often because many of these surveys are poorly designed and, therefore, do not truly reveal the degree of employee satisfaction in the company. An effective employee satisfaction survey should ask questions that employees find relevant: Do you find your work meaningful? How would you rate your work-life balance? Do you feel valued at work? Do you feel there is room for personal growth? Of course, these questions are important to employers, too, as the answers to them will reflect how engaged an employee is at work. You can measure the success of employee benefits by looking for answers in these surveys that tie into specific benefits, such as opportunities for further learning and skills development, holiday time, and flexible working.
Business success doesn’t always have to be measured in terms of ROI. While it is possible to glean some information about how the cost of a specific benefit compares to its financial return (e.g. the money saved from reducing staff turnover rates, employee disengagement, and absenteeism), such calculations can be notoriously difficult to carry out. It would be more efficient and insightful if companies instead identified business goals and explore how benefits can help influenced these desired outcomes.
Employee benefits packages can help drive employee engagement and business success. Download our free e-book to find out more.