Employee Benefits: Maximizing Value and Impact

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Employee BenefitsMaximizing Value and Impact

• Lorna MacMillan, EMEA Benefits Manager
• Hewlett-Packard

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Agenda

• Understanding Value and Impact
• Designing a Benefits package
• HP Approach
• Summary

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Value and Impact in a Benefits context
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Value and Impact

• Definition of Value
• How useful or important something is
• Synonyms
• Cost, worth, price
• Definition of Impact
• A significant effect or influence caused by
  something
• Source Oxford Dictionary

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Value applied to Benefits

• For employees, perception of usefulness or
  importance is key
• Different aspects are important to different
  individuals at different stages of life or career
• For employers, cost, worth or price prime
  concern
• Investment in staff affiliation employees need
  to understand and appreciate value
• Provision and level need to be meaningful
• Avoid Is that all there is? reaction

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Benefits Impact

• Benefits can have a positive or negative
  impact..
• Employers need to optimize the effect of their
  benefits package
• Without financial hostage to fortune
• Desired impact of benefits package needs to be
  articulated
• Passive acceptance will not maximize value

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Designing a Benefits package
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Set objectives

• Be specific and realistic
• What do you want your benefits package to
  accomplish?
• Attract and retain key people and skills?
• Employee affiliation and engagement?
• Cost efficiency?
• How will it achieve your objectives?
• Differentiate against the market flexibility,
  branding
• Communication 2-way, timely, specific, ongoing
• Affordable but meaningful diversity, choice,
  delivery
• Align with Rewards strategy and corporate
  philosophy
• Stakeholder engagement and support

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Factors to consider
Workforce diversity and preferences
Benefits Package Development
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Implementation Factors

• External support requirements
• In house or outsourced administration
• Legal requirements
• Tax and NI impact
• One time or gradual introduction
• Communication
• Role of line managers and employee reps
• Program advocates
• Ongoing program/supplier management

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Never forget communication..

• Impossible to optimize value and impact without
  effective communication and education
• Start early and keep going!
• Encourage two way dialogue
• Use various media and message formats
• Consider generic and specific information
• Keep it simple avoid jargon
• Survey users on effectiveness
• Offer QA opportunities face2face if possible
• Be consistent in content and quality

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HP Approach
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Total Rewards framework
Total Rewards
Base pay
Variable pay
Reward recognition
Equity
Benefits
Variable
Fixed
Fixed
Job architecture
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Benefits solution

• Flexible benefits framework
• Employee has high degree of flexibility and
  choice
• Less imposition -gt less alienation -gt more
  affiliation
• Equality across all benefits (age, sex, marital
  status)
• Ongoing program management and annual review
• Peer group benchmarking
• Alignment to TR strategy and business goals
• Communication and education
• Annual statement of options (hard copy to home
  address)
• 24/7 intranet access to generic and personal
  choices
• Annual on line enrolment/amendment opportunity

Benefits Health welfare Time-off Retirement Oth
er legally required benefits
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Delivery Philosophy
Market Competitiveness
Benefits Health welfare Time-off Retirement Oth
er legally required benefits

Program Management

Employee Understanding Appreciation

Value of Benefit Delivered

• Each element is key to maximizing value and
  impact of HPs benefits program

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Benefits Strategic Focus

• 1. Best return on benefits spend - best impact on
  employees
• 2. Simple and rewarding employee benefit
  experiences
• 3. World-class benefit cost structures - spend
  wise and spend smart!
• 4. Focused benefits innovation - smart design,
  smart management

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Business case for Flex

• For employers
• Better value for cost
• Better employee affiliation
• Competitive recruiting advantage
• Tax efficiencies
• MA facilitation
• Control costs and risk
• Company branding
• Informs on eee focus

• For employees
• Greater understanding/ appreciation of value/cost
• Tax efficiencies
• Stronger purchasing power better rates and
  discounts
• Flexibility
• Adaptable to changing needs
• Control over spend
• Lack of hassle factor

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Summary
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Maximizing Benefits Value and Impact
BENEFITS
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Questions