Measuring the Success of Workplace Benefits: What Works and How to Track ROI
Over the past few years, you have probably seen LinkedIn posts poking fun at companies that list fruit baskets as an employee “benefit.” But beyond the humour, it raises an important question: Among the many common and unique benefits offered by organisations, which ones truly deliver the best ROI while enhancing employee well-being?
Exploring Benefits and Well-Being in the Workplace
At the third event in the HR Advisor series, attendees dove into the topic of "Benefits and Well-Being in the Workplace." The discussions revealed a startling insight: None of the organisations present measured sufficient data to determine the ROI of their employee benefits. Alarmingly, a study found that 76% of organisations are unaware of the ROI for the benefits they offer.
This lack of data-driven insight is concerning, especially in an era where People teams increasingly rely on metrics to secure leadership buy-in and demonstrate the effectiveness of their strategies.
Measuring ROI: One Size Doesn’t Fit All
Measuring ROI for employee benefits is not a one-size-fits-all approach, it depends on the specific goal of the benefit. During our roundtable, attendees shared examples of popular benefits in their organisations. The most common, by far, were private medical insurance and gym memberships. Indeed, one organisation had a 94% claims to loss ratio with Bupa even with a £100 excess implementation and there was a typical 75% uptake on PMI amongst companies in attendance. However, these are widely appreciated, measuring success simply by the number of employees who take up these benefits doesn’t always tell the full story.
Take private medical insurance, for example; high uptake can sometimes push the ROI curve in an unexpected direction. If an organisation offers on-site doctors, therapists or physios and these services become oversubscribed, it can lead to longer waiting times and, in some cases, even higher absenteeism rates. In these cases, businesses may need to rethink the offering, encouraging employees to consider alternative options before seeking medical treatment.
Tailoring Benefits to Organisational Needs
Return on investment (ROI) varies depending on the objective of a given benefit. For example, if a significant portion of your workforce travels frequently and unused annual leave is a common issue, the success of benefits such as flexible bank holidays, remote working options, or allowing employees to extend holidays with additional remote weeks should be measured by their impact on reducing unused leave.
Thus, it’s critical to understand the underlying goal of each benefit. This clarity will help HR teams develop relevant success metrics that align with both the organisation’s needs and employee well-being.
Not all benefits are universally applicable. As we discussed, some benefits may work better for certain types of organisations than others. For example, free lunches can be a huge perk for businesses with fully office-based teams. However, in hybrid or remote-first organisations, this benefit may hold little appeal. The same goes for wellness-related perks: Wellness days, where employees are given two paid days off per year to take without justification, are gaining traction. These days can be used without guilt, and upon their return, a non-invasive welfare check can be conducted to identify any support the employee may need.
This type of benefit could be measured not only by employee uptake but also by tracking the impact on absenteeism, engagement and even employee retention. It's about creating an environment where taking time off for mental health is normalised, not stigmatised.
Considering Context: Childcare Benefits
Another area discussed in our roundtable was the potential for childcare benefits through salary sacrifice schemes. While this can be a great financial relief for employees, it may not be suitable for every business. Regulated industries, for example, are often hesitant to implement such schemes due to the complex tax considerations involved (regardless, it's always a good idea to consult with the finance team!)
Communication: The Key to Engagement
Finally, one of the most powerful ways to maximise the impact of benefits is through effective communication. Ensuring that employees are fully aware of the benefits available to them is key to driving engagement. Embedding benefits into the recruitment, induction, and appraisal processes can facilitate a culture of active participation and engagement. The clearer and more consistent the messaging around benefits, along with the sight that those ‘at the top’ are also taking advantage of the benefits, the more likely employees are to take full advantage of them.
When evaluating workplace benefits, it’s important to go beyond simply offering perks and track how well these benefits align with both business objectives and employee well-being. ROI can be measured in various ways, depending on the specific benefit and its intended impact. Understanding these metrics - whether related to uptake, absenteeism, retention or engagement etc - is crucial for determining the success of any benefits program. By tailoring offerings to the needs of your organisation and your employees, and by fostering clear communication about available benefits, you can create a more effective, inclusive benefits strategy that truly enhances both employee experience and business outcomes.
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