• Opinion: Pay v benefits – which is more important?

  • 11 Sep 2017
  • Comments 1 comments

Employees will only value benefits packages if they are carefully crafted to offer something for everyone, writes Karen Bates

Job markets are constantly in flux and organisations must continuously strive to be the most attractive place to work if they are to secure the best available talent. However, a debate that has raged for a long time is the question of what employees see as the biggest incentive to take a job – pay or benefits?

If you ask any employee whether they’re happy with their pay, they are always going to say they would like to be paid more. Everyone wants to feel that their pay reflects the value they believe they bring to an organisation, and you will also struggle to attract the right quality of candidates if your base pay is not competitive.

However, if you ask an employee whether they are happy with their benefits package, it generates a very different discussion. I believe it will always be the benefits that employees value more, and which will ultimately make you a more attractive employer.

That said, it’s important that the benefits you offer are right for your staff or they will quickly lose their appeal. The best way to achieve this is to offer benefits that are flexible and can be adapted to individual circumstances. For example, if you offer family-level health care to all employees, those without a family are losing out. Likewise, not everyone is a gym bunny, so a mass gym membership isn’t the best benefit to offer either. If employees were allowed to choose from a selection, or were able to allocate the money to another option as part of a flexible package, this would ensure that everyone has fair and equitable benefits. Someone who travels a lot, for example, may want travel insurance as a benefit, whereas someone who values their family time might prefer an allowance to buy holiday.  

While I firmly believe that this is the best approach to offering a competitive benefits package, I can’t stress enough the importance of ensuring that all of your bases are well and truly covered. Take the issue of inclusivity, for example. Giving everyone their birthday off is a nice touch and something everyone can use. When you give people days off to move house or when they get married, these are rare occurrences and so are only likely to only be relevant to a minority of your team. Either avoid benefits that can’t be enjoyed by everyone, or ensure that such benefits must be chosen from a range that everyone has access to.

You should also consider a benefits package that your employees can adapt as their circumstances change and they get older. What feels important at the start of your career will change significantly as you start a family or head towards retirement, so offering a truly flexible benefits package that can be adapted over time is another great retention tool.

The pay v benefits debate has been in full swing for several years, and I have no doubt that it will continue for many more. But I believe that to attract and retain the very best talent, both are important and should come hand-in-hand. To offer the best possible benefits package, however, go the extra mile and ask your employees what would give them the most value.

Karen Bates is HR director at Opus Energy

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  • Flexible benefit packages sound very attractive but often the offerings are not very competitive with the open market. For example travel insurance can often be found much cheaper elsewhere. These flexible benefits do not seem to be designed to offer employees real value for money but just for HR to tick the flexible benefit box.

    More should be done to engage with employees and check the real cost of these benefits outside of the companies promoting them.