23 June 2014

Aon Hewitt 2014 EMEA Employee Benefits Communication Survey

Submitted by: MyPressportal Team

Survey finds that employers are not effectively communicating the total value of employee compensation and benefits

Aon Hewitt, the global talent, retirement and health solutions business has released the findings of its 2014 EMEA Employee Benefits Communication Survey. The survey collected responses from 590 organisations in 19 countries to provide an overview of trends in compensation and benefits communication across the Europe, Middle East and Africa (“EMEA”) region.

According to Ndivhuwo Manyonga, Executive Head of Aon Hewitt South Africa, the implementation of compensation and benefits programs to retain talent and engage with employees requires significant investment. “Corporate South Africa spends billions of Rands on employee compensation and benefits each year. Benefits such as paid time off, medical aid, retirement funding, disability and life insurance can add anywhere from 25% to 40% to an employee’s annual cash compensation. It constitutes a rather large investment from a company’s perspective, making effective communication around compensation and benefits essential in order for employees to fully understand the total value of their compensation package,” says Ndivhuwo.

The second edition of Aon Hewitt’s EMEA Benefits Communication Survey found that compensation and benefits communication is becoming increasingly widespread in South Africa, with 82% of respondents claiming to inform their employees about their compensation and benefits package, up by 2% from last year’s survey results. “The survey found that South African respondents are communicating more frequently than in previous years. However, despite these efforts, most companies remain sceptical about the effectiveness of the communication. This highlights the need for companies to fully understand their communication needs and to tailor their activities accordingly,” says Ndivhuwo.

A positive trend that has emerged in South Africa is a significant increase in the frequency of communication with 50% of respondents communicating several times a year.

The survey also showed that 64% of South African companies do not provide total rewards statements. “In our experience the optimal approach is to develop a regular communication program that keeps the total reward – both compensation and benefits – top of mind for the employee. It effectively moves the focus from cash compensation to the total reward that the employee receives. If the total reward is not reinforced then an employee may fail to appropriately benchmark and appreciate what they are sacrificing in terms of benefits when leaving one company to join another which appears to offer a higher cash compensation,” says Ndivhuwo.

Other key SA findings of the survey include:

  • 50% of South African companies have no budget dedicated to compensation and benefits communication
  • 64% of companies use multimedia to communicate EMEA Findings

Across the wider EMEA region, 75% of companies communicate their compensation and benefit packages to employees. There are forerunners such as Ireland where 95% of companies provide communication. Companies expressed similar frustration with the impact of their communications programmes, with budget constraints cited as a key factor inhibiting employers’ ability to derive a valuable return on investment from engagement initiatives. Reassuringly though, companies are increasing the frequency of communication with their staff - but the lion’s share of their time in this area remains spent on implementing, rather than explaining benefits packages

Key EMEA findings:

  • 52% of companies have no budget for compensation and benefits communication.
  • 81% of companies spend more time on implementation than communication when there is a change in benefits packages.
  • 42% of companies engage in benefits communication several times a year, up from 37% in last year’s survey.

“If you find that employees don’t fully appreciate the true value of your company’s spend on their compensation and benefits, it’s most likely as a result of a failure to communicate effectively and regularly, using simple language in their medium of choice. Communication needs to be regular, cost effective and adapted to its target audience,” says Ndivhuwo.

Companies would do well to conduct a simple audit of their existing communication initiatives, on-going needs and new opportunities for employee engagement. This will ensure that companies maximise the effectiveness of their communication programmes and gain a higher return on their investment in the form of improved employee engagement and understanding of compensation and benefit packages. Aon Hewitt works with companies to integrate a marketing approach in their communication to employees, taking into account new expectations, changing technology and evolving communication approaches,” concludes Ndivhuwo.