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Financial pressures are the largest source of stress for Australian employees despite the majority being happy with their current incomes. Are benefits the missing piece?
Thirty-six per cent of Australian employees are considering leaving their current employer, and the past two years have seen the nation’s highest job switching rates since 2012, according to Flare’s recent National Employee Benefits Index.
In a context of economic uncertainty and cost-of-living concerns, businesses that offer the right kind of benefits are seeing significantly stronger employee loyalty and satisfaction.
“Despite the current high levels of inflation, businesses have not increased salaries accordingly within the Australian market, recognising that sustained wage growth at this level isn’t feasible. Instead, more businesses are moving to alternative, financially scalable solutions to enhance pay packages … like benefits”, said Flare in its report.
The report found that employees with benefits were 50 per cent less likely to consider leaving their current employer and 23 per cent less likely to experience a sense of being overworked.
Flare continued: “Benefits have proven their effectiveness in boosting employee engagement, reducing frustration over compensation, and increasing retention by elevating overall job satisfaction. But not all benefits are created equal. Among the surfeit of work and life perks offered by Aussie businesses, only a select few truly foster employee loyalty.”
It’s important to distinguish between benefits (the more substantial, non-salary compensation) and perks (less significant day-to-day advantages like free coffee and snacks) since only the former has been linked to greater engagement and loyalty.
In terms of employee loyalty, the report found the top five benefits were:
- Flexible schedule options
- Support for reasonable work hours
- Career development and leadership development programs
- Subsidies and support for physical health (e.g., gym discounts, wellness classes, etc.)
- Virtual working options
That said, the greatest financial savings are likely to come from pre-tax benefits – a class of benefits that are often overlooked by Australian employers and employees alike.
“Once informed about pre-tax benefits, employees’ interest surges. A remarkable 80 per cent of respondents would embrace at least one pre-tax benefit in the next year if offered by their employer,” Flare said.
“In an economic climate fraught with uncertainty, pre-tax benefits emerge as a promising strategy to support employees without compromising the business’s financial position. By leveraging these incentives, companies not only alleviate employees’ financial stress but also foster loyalty and productivity.”
Pre-tax benefits include:
- Novated car leasing
- Additional leave
- Health insurance
- Income protection insurance
- Salary sacrifice education expenses
- Salary sacrifice laptop/mobile/WFH set-up
As concluded by Flare: “Because of such low levels of pre-tax benefits offered nationally, early mover advantages could be captured by businesses [that] offer these to attract scarce talent or by retaining critical employees during lean times.”
External stressors and the role of benefits were unpacked in HR Leader’s recent webcast in partnership with Flare and Winc.
The webcast discussed:
- How employers can interact with their teams to foster a valued workplace culture
- How and why businesses need to understand what truly matters to their employees to develop a meaningful benefits program
- What the cost-of-living crisis really means for your employees and how it’s impacting their dedication to their work and maintaining a work/life balance
To view the webcast, click here.
RELATED TERMS
Benefits include any additional incentives that encourage working a little bit more to obtain outcomes, foster a feeling of teamwork, or increase satisfaction at work. Small incentives may have a big impact on motivation. The advantages build on financial rewards to promote your business as a desirable employer.
Nick Wilson
Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.
