Thursday, July 28, 2011

Employee engagement: Do benefits make a difference?

Mercer recently released its 2011 What’s Working—Inside Employees’ Minds survey on employee engagement. The survey asked more than 2,000 Canadian workers for their views on various aspects of the employment deal, including pay, benefits, careers, leadership, performance and engagement. The survey analyzes differences by workforce demographics and includes a conjoint analysis to determine what employees value most.
Some of the more interesting observations from the survey include the following:
  • One in three Canadian workers is seriously considering leaving his job—as such, employers may face a loss of valued talent as the economy and job market improves.
  • One in five Canadian workers is disaffected—she is committed to neither staying nor leaving the organization.
  • Base pay is at the top of 13 elements that employees value, but only 58% of survey respondents believe they are paid fairly.
  • Employee benefits rank in the lowest third of the most valued elements of the employment deal. In addition to base pay, factors such as retirement/savings, type of work, respect for the organization and incentive compensation are valued more than benefits.
To state the obvious, Canadian employers have a significant employment engagement issue. The employment deal is changing, with company loyalty at all-time lows and employees—now more than ever—prepared to vote with their feet. Getting base pay right is clearly key to winning the hearts and minds of employees, with employee benefits being somewhat of an afterthought.

Employee benefits do not drive employee engagement. It pains me to say these words, but the conclusion in itself is not startling—most of us in this business know that cash is king. However, admitting that benefits are not front and centre in the war for talent does not mean benefits are unimportant. A benefits plan has become the price of entry—you need to have a plan in place just to play the game.
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