Helena Pozniak
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Rethinking the workplace

The Telegraph
Research shows it pays to look after your employees’ well-being

Employers have long sought to understand how to get the best of their workforce, and often the answer isn’t simply to spend more money.

What motivates and engages employees? And what inspires staff loyalty?

Solutions are not always straightforward, but as Unum is discovering, businesses can provide targeted wellbeing policies and employee benefits to nurture staff loyalty – and ultimately protect their bottom line.

As every employer knows, it pays to hang on to your best employees; the expense of replacing them can be excessive – sometimes it can cost as much as almost £40,000 to recruit a new employee and get them up to speed in professions such as law and accountancy1.

But what do employees actually want and need, and has this altered with the changing financial fortunes of the economy?

Over the last few years, Unum has collaborated with a series of prestigious research partners, such as Cass Business School and Oxford Economics, to unpick the complexities of engaging and retaining staff, and providing for their needs.

Actually, since the financial downturn, employees are less keen on the “frills” of benefits packages and value long term financial security over short term perks. But Unum’s research shows that employee benefits haven’t kept pace with the changing needs of the workforce over the past 30 years.2

Staff are becoming increasingly vulnerable financially. Compared to the 1980s, today’s workforce is older, more likely to be ill and has relatively more women, who tend to have caring responsibilities. Workers are also more prone to get into financial difficulties than in previous decades – and benefits should now reflect these needs, says Unum.

Surprisingly while more than half of companies believe they should be responsible for the wellbeing of their staff, at least half haven’t updated the benefits they offer since 2008.3

Packages are no longer in step with what employees actually want in the wake of the downturn.

To compound this, there is a frightening gap between individuals’ savings and the reality of falling ill. One in 10 people in the UK will go on long-term sick leave, but research found that 58 per cent of workers underestimate the risks of this happening – and half of employees have less than a month’s salary as savings.4

Only 11 per cent have Income Protection, and therefore have no back-up plan should they be out of work for some time through long-term illness or injury.

But it’s no good having a solid suite of benefits if staff don’t know what they’re entitled to. It’s only when companies actually communicate the benefits in place that they win their workers’ hearts and minds. If they don’t, they are no better off than businesses that offer nothing - their employees are equally as unengaged and more likely to call in sick or move on.

When Unum examined the estimated cost of this “communication gap”, the losses became clear. A typical company with 1,000 employees, but which doesn’t communicate its benefits, will spend £47,000 more a year on staff turnover and sickness than the business that manages to let its workers know what’s on offer.

Research puts the overall cost of this “communication gap” at a whopping £2.7 billion a year for UK commerce.5

With several years of research under their belts, experts at Unum believe they are gaining a deeper understanding of the hows and whys of employee care, and the links to how engaged and motivated employees feel as a result.

Crucially, the latest research shows that half of all staff would positively welcome help from their employers in planning their own financial security. But the employers’ fear of bureaucracy, and confusion about what role they should play, largely prevents them from offering such assistance.

“However it makes sense for employers to help staff with their financial planning,” says Peter O’Donnell, CEO of Unum. “This is a tangible way for them to show they care for staff – and it reaps dividends in terms of loyalty and productivity.”

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