Employers miss a trick by being too modest about benefits

Aug 09 2006 by Nic Paton Print This Article

Employers are shooting themselves in the feet when it comes to hunting for new talent, new British research has suggested, with just only one job advertisement in four making any reference to employee benefits, and a measly 16 per cent telling new recruits whether they will be able to join a company pension scheme.

The research by consultancy Watson Wyatt was based on a sample of 1,000 recruitment advertisements.

Watson Wyatt found that, while more than 70 per cent provided some details of salary, just 25 per cent made any reference to the employee benefits on offer such as pensions, health insurance and bonuses.

"Employee benefits can make up as much as 40 per cent of an employee's total remuneration package, so those employers with a good range of benefits may be missing out on a useful recruitment tool," said Gary Smith, a senior consultant at Watson Wyatt.

"Employees traditionally undervalue the benefits Ė and in particular the pension benefits Ė provided to them by their employer.

"Perhaps some employers are guilty of encouraging this by not highlighting the benefits they offer at the earliest possible stage in their relationship with potential recruits," he added. The Watson Wyatt study follows research released by Axa Investment Managers last month that found that 67 per cent of employees wished to see full details of the employment package listed in job advertisements.

The Watson Wyatt study found that, of the 16 per cent of advertisements that did make some reference to pensions, 34 per cent said they had a final salary scheme while 9 per cent mentioned a defined contribution scheme.

Intriguingly, advertisements for lower paid jobs were more likely to mention pensions than higher paid jobs.

Higher paid jobs (more than £30,000) tended only to mention pensions when they were able to offer a final salary scheme.

Beyond pensions, other specific employee benefits were rarely mentioned.

Just six per cent referred to the provision of a car or car allowance, three per cent healthcare benefits, one per cent to life assurance, four per cent to flexible working arrangements.

Holiday entitlement was referred to by nine per cent, while eight per cent made reference to a bonus scheme and two per cent to equity or share options.

"The quality of employer communication about the benefits on offer can be at least as important as the structure and cost of providing them in affecting employees' perceptions of their value," said Smith.

"HR professionals and recruiters might consider how they could do more to leverage competitive advantage out of their employee benefits schemes," he concluded.