As businesses grow, they often encounter challenges managing different employee benefits packages across multiple locations, departments, or merged companies. This inconsistency can lead to employee disengagement and confusion. To foster a unified workforce, businesses must strive toward benefits harmonisation—aligning employee benefits across different parts of the organisation, including different businesses within the group, to ensure fairness, transparency, and equity.
In this blog, we will outline the steps and key benefits of achieving benefits harmonisation to build a motivated workforce.
Why Benefits Harmonisation Matters
Increased Employee Satisfaction and Retention
A lack of commonality in benefits can create friction between different teams within a company. When employees feel that their benefits packages are less competitive than their peers, it can lead to decreased morale and increased turnover. Studies show that 79% of employees consider benefits a critical factor in their decision to stay with an organisation*.It’s becoming vital for people to consider the full scope of their roles, including work-life balance, flexibility, pension contributions, and learning and development opportunities.
Streamlining Administration and Costs
Different benefits structures across the organisation lead to administrative inefficiencies and costs. A unified system makes it easier for HR teams to manage and communicate benefits policies, thus reducing administration costs. It makes financial sense for companies to align their employee benefits and make the effort to streamline them.
Alignment with Company Culture and Values
Aligning benefits helps reinforce the company’s values and culture. By offering consistent benefits, employees understand that the company is committed to fairness and inclusivity. Shared values promote engagement and drives productivity. Research from Gallup highlights that companies with highly engaged employees see a 21% increase in profitability.
Steps to Achieve Benefits Harmonisation
Achieving benefits harmonisation is a multi-step process which involves understanding the current benefits landscape, making data-driven decisions, and communicating clearly with employees. Here’s how to go about it:
Assess Current Benefits Across the Company
The first step is thoroughly auditing the existing benefits packages across different locations, teams, or companies. Evaluate discrepancies, redundancies, and the overall competitiveness of the benefits offered.
Key questions to ask include:
Are benefits equitable across all teams?
Do packages reflect the market standards?
Is your Talent Value Proposition (TVP) attractive to candidates?
Are there unnecessary overlaps or under-utilised benefits?
At this stage, a benchmarking process against industry standards is essential.
Define the Core Benefits
Once you have assessed the current benefits structure and what is and isn't working about it, develop a core set of benefits to apply consistently across the organisation.
These should cover the essentials, such as:
Health and wellness
Pension schemes
Life insurance
Paid time off
Flexible working options
Maternity/Paternity/Adoption leave
It’s essential to consider the diversity of your workforce. For instance, younger employees like Gen Z may value learning and development opportunities, while older employees may prioritise retirement benefits. This cannot be overlooked: according to a Glassdoor study, ***57% of workers say benefits are among their top considerations when accepting a job offer. It is important to consider generational drivers – what is important to different groups of people?
Consult with Employees
Communication is vital in the harmonisation process. Survey employees to understand their benefits preferences and needs - what is and isn’t working? These efforts ensure the benefits offered are relevant to your workforce. If benefits are competitive, it will increase employee engagement and retention.
Communicate the New Benefits Structure Clearly
Once the benefits structure is in place, communicate it effectively across the company. Employees should feel valued which is why transparency is crucial. Regularly updating employees on their benefits and providing clear, accessible information as well as step-by-step guides helps to build trust.
Having the benefit is one thing, but accessing and taking advantage of it is another.
The Impact of “Good” Benefits
Improved Employee Wellbeing
Harmonised benefits lead to a more satisfied and engaged workforce. Proper health, wellness, and financial benefits foster an environment where employees feel supported.
Enhanced Employer Branding
Offering attractive benefits in a competitive talent market can set your company apart. In fact, 82% of employees say that benefits offerings are a critical factor in choosing a job**. A consistent and competitive Talent Value Proposition (TVP) enhances your employer brand and helps attract top talent.
Reduced Turnover and Absenteeism
Disengaged employees are more likely to leave or have higher rates of absenteeism. In worse cases burnout could lead to sickness. A benefits package aligned with employee needs, with clear provisions in place for those feeling overworked and overwhelmed, reduces the likelihood of turnover.It also leads to poor company reviews and can affect future hires if news spreads that the company is “bad” to work for. If a former employee is complaining about their experience via a third-party review site, it could be enough for potential candidates to blacklist the company.
Next Steps for HR
Benefits harmonisation reduces administrative complexity and is critical for creating an engaged workforce. With employees placing more value on benefits, achieving harmonisation can boost employee engagement, reduce turnover, improve your employer brand, and ultimately attract top talent to your organisation.
A solution is to start with a comprehensive benefits audit, listen to your employees, and design an approach that caters to your workforce's diverse needs. Ultimately, a benefits structure fosters fairness, promotes inclusivity, and leads to a more motivated workforce, helping your business thrive in the long term.
Do you have the in-house expertise to manage your benefits harmonisation project?
Why not connect with us to explore how our HR Services can provide the specialised skills you need to lead the project—without increasing your permanent head count. Let us help you create a benefits strategy that not only supports your workforce but also aligns with your company’s goals. Reach out to Catherine Hingston for more information and discover how benefits harmonisation can futureproof your talent strategy and unlock new potential for your business.
References
**Gallup
***Glassdoor