Here’s Why Most Businesses Fail at Creating Employee Loyalty
Most businesses do not track the ROI on their employee benefit solutions and as a result continue to make decisions based on the cost of the solution rather than the size of the associated opportunity.
Here, Victoria Carvalho, Managing Director and responsible for Employee Loyalty at Ten Lifestyle Group, discusses the real value of employee loyalty.
With the significant cost of high turnover, frequent absence and lost productivity, most forward-thinking businesses have recognised the value of employee wellbeing. But finding practical solutions to address this is challenging. The price of bespoke benefits solutions often causes HR directors to quickly dismiss the offering as unviable without even considering the potential return. Businesses inherently accept the concept of investing big to win big, so why are they so resistant to applying this logic to their employee benefits strategy?
Research shows that a staggering 80% of companies* are not currently measuring the results of their benefits programmes. With the cost/benefit unknown, the opportunity for truly game changing benefits remains largely untapped. And decisions in favour of cut-throat pricing allow companies to tick a box without having to justify the spend. Or the value.
But the job market is changing and businesses who continue to favour this status quo and placing lifestyle benefits in the ‘nice-to-have’ category may soon find themselves unable to appeal to the best talent.
Concierge is a great example of what is often perceived as a luxury item. The historic association with wealth is ignorant of the way technology has allowed this industry to evolve into a powerful time saving tool. In many ways concierge is the ideal lifestyle partner to today’s successful and ambitious global professionals.
Millennials are now the majority workforce and they are reclaiming the value of their time. They may reject the corporate ladder or the road to making partner, for options that put personal and career ambition on equal footing. This is a pool of high performing and passionate professionals, eager to give their time to meaningful work, but quick to move on when companies do not offer them personal fulfilment in return.
And the opportunity is not limited to millennials. Planning family holidays or sourcing concert tickets sound exciting but as more households rely on two working partners, these time consuming personal tasks simply add stress to already stretched days. And beyond just managing daily responsibilities, employees increasingly value aspirational pursuits like world travel and memorable experiences in their personal time.
The opportunity for employers is to support and enable these lifestyle aspirations – often of deep personal value to the individual employee. Access to an emergency tradesmen or help arranging a last-minute anniversary surprise is incredibly powerful because it addresses a need that is often much more immediate and personal than other work-related benefits. And the result is a feeling of deep personal loyalty from the employee.
But does this loyalty alone justify the cost? Although increased loyalty may sound idealistic, the ability to deliver even these personalised benefits with the help of technology makes the proposition much more viable. With a digital platform companies can scale quicker, reduce costs and perhaps most importantly, track the results with reporting tools. When employees are less stressed and more focused they are more productive at work and stay with the company for longer.
And while the direct returns alone are compelling, companies ignore the risk of delaying at their peril. New players are already luring the best talent with their promise of a work-life balance. Companies that are slow to react may find the cost/benefit of their bespoke benefits spend dropping into the red as the costs of staff turnover and low productivity start to bite.
The challenge for business is to recognise the vital importance of understanding the ROI of their benefits spend. Not necessarily to justify HR Budget spend, but to incentivise leadership to make larger investments into their employee’s wellbeing, knowing that the positive impact will show on their bottom line. With direct returns in productivity, engagement and employee retention, the relative investment becomes much easier to justify.