No reward communications budget? Here are the stats you need to build a budget business case
In this volatile world where critical skills are becoming increasingly scarce, it has never been more important to attract and retain top talent for your business. Employee reward packages are an indispensable tool in this regard. Which is why you invest in them, right?
But there’s a big problem.
You’re not seeing the benefits of your reward package because your employees aren’t engaging with it. In my experience as an HR reward specialist, inadequate comms is often the root cause. And this stems from not having a reward communications budget..
Signs you need a reward communications budget
You’ve invested a lot of time, money and effort in creating employee reward packages that make your colleagues feel recognised, rewarded and supported. However, you’re still experiencing problems, such as:
Low uptake or use of your employee rewards
A recent pulse survey revealed most colleagues aren’t aware of your employee reward schemes
Losing colleagues to competitors because: “they have better employee benefits”
These are all signs that you’re not communicating your employee rewards effectively. Which likely means your investment into employee benefits isn’t delivering optimal ROI. And, without benefit uptake, you’ll lose money through disengaged employees: global businesses lose approximately $7 trillion each year due to lack of motivation.¹
This begs the question: why don’t you have an adequate budget for employee reward comms?
What’s stopping you from communicating better?
It’s not that you don’t see the value in employee rewards: 90% of HR professionals agree that an effective recognition and reward programme helps drive business results.² And 75% of employers believe improving the effectiveness of their benefits communications is an important objective.³
Perhaps you think you’re already doing enough to communicate your employee rewards, but your employees disagree. This might be the case if your budget only covers the bare minimum. In reality, your reward comms budget should account for:
Communication experts
A comms strategy
Internal marketing campaigns
Building and maintaining digital channels
Digital assets (videos, images, flyers, etc.)
Know this already? Then you might be struggling to get leaders in the business to approve your proposed budget.
Or maybe building a business case for your reward comms budget isn't a priority. In Gallagher’s global internal communications (IC) survey, only 10% of HR and communication professionals said they’ll focus on building a business case to gain more resources for their IC.⁴ Which is a huge mistake! Because research from Willis Towers Watson⁵ proves that firms that communicate effectively with their people will:
Deliver a 47% higher total return to shareholders (2004-2009)
Spend 28% more per employee on employee communications ($257 high vs. $200 low)
How do they spend this money? Businesses that communicate well are:
2 x as likely to use social media
2.5 x as likely to have a clearly defined Employer Value Proposition
5 x more likely to use a branded approach to talk about employee compensation and benefits
A reward communications budget is essential if you want to unlock the benefits of having exceptional employee benefits. And you need buy-in from leadership to secure a sufficient budget that will help you communicate better and get ahead of the competition. It’s that simple.
So, now that I have your buy-in, let’s work on getting other key stakeholders on board.
8 stats to help you build a persuasive budget business case
These stats highlight why strong internal communications lead to a significant ROI from your employee benefits. Whether you need to remind yourself or your colleagues, use the following figures to emphasise why a reward comms budget is essential.
1. 74% of employees have the feeling they’re missing out on company news because the internal communication department is non-existent or doing a poor job.⁶
Survey your colleagues to find out if they think your reward IC is strong enough, then share your findings with key stakeholders.
2. 27% of employees point to a lack of recognition and rewards as an important reason to leave an employer.⁷
If your colleagues aren’t aware of your employee rewards, they’ll probably assume you don’t invest in this area and are more likely to leave you for a competitor that does.
3. Employees who rate their companies’ HR and talent programs as “world class” or “very good” are twice as committed to remaining at their jobs than employees who characterise those efforts as “fair” or “poor” (42% compared to 23%).⁸
This shows how important the role of HR and talent programs are to employee satisfaction and retention.
4. Messages shared by employees go 561% further than the same messages shared on organisational channels.⁹
It’s not enough to run the odd campaign on your communication channels. You need to create so much buzz around your rewards that employees will talk about them between themselves.
5. 44% of employees want wider adoption of internal communication tools.¹⁰
And to fund those tools, you need a bigger communication budget.
6. Companies with highly engaged employees can improve operating income by 19.2% over a 12-month period.¹¹
Guess what drives highly engaged employees who are more productive? The next stat speaks for itself.
7. 25% of employees believe helpful employee benefits and perks would have the biggest positive impact on their productivity at work.¹
Proof that employee benefits do drive great business outcomes. But there’s a big problem ...
8. 34% of employees wish their employer would communicate more about the workplace benefits available to them.¹²
Which is why it’s essential to have a big enough budget that fuels excellent comms around your employee rewards.
Don’t miss out on big business benefits
Effective communication around your employee rewards is how you drive uptake and enjoy the benefits of highly engaged and motivated people. Overall, companies with high employee engagement are 21% more profitable.¹³
Use this article to build a powerful case for your reward communications budget. It will help leaders in the business understand how better IC helps them achieve their benefits goals, such as:
Creating a recognition culture that strengthens your employer brand and promotes your values
Boosting staff retention and attracting top talent
Filling skill gaps in the business in response to the skills crisis
Supporting wellbeing and driving the productivity of your teams to increase profitability
Once you’ve secured the buy-in needed for a better reward comms budget, it’s time to put that money to good use.
I can help you tell captivating stories around your employee benefits that get colleagues invested in your offering. Interested? Get in touch.
Never worked with an employee reward communications specialist before? Then read my blog: How to work with an employee reward communications specialist.
Sources:
1. Gallup, Dismal Employee Engagement Is a Sign of Global Mismanagement, gallup.com/workplace/231668/dismal-employee-engagement-sign-global-mismanagement.aspx
2. Reward Gateway, 21 Key Employee Recognition Statistics, https://www.rewardgateway.com/uk/blog/21-key-employee-recognition-statistics
3. Metlife, 2017, The power of employee benefits in an uncertain world, metlife.co.uk/content/dam/metlifecom/uk/pdf/EmployeeBenefits/Brexit/1/2254.02MAR2021-EBTS-Report_United-Kingdom_WEB.pdf
4. Gallagher, 2021, State of the Sector 2021: global internal communication and employee engagement trend, https://www.ajg.com/employeeexperience/state-of-the-sector-2021/
5. Willis Towers Watson, 2009, Capitalizing on Effective Communication, https://sandiego.iabc.com/wp-content/uploads/2009/08/TW-Comm-ROI-_IABC-SD-Presentation-Slides_0915101.pdf
6. Gallup, 2015, Companies Are Missing Opportunities for Growth and Revenue, https://news.gallup.com/businessjournal/182912/companies-missing-opportunities-growth-revenue.aspx
7. Randstad, 2018, Employer brand research global report, https://cdn2.hubspot.net/hubfs/481927/rebr_globaloverallreport_2018_%5Bpp2010%5D-1.pdf?submissionGuid=0e8ecd2a-1dde-4afb-a204-a8530f2e2921
8. Deloitte, 2020, Talent Edge 2020:Redrafting talent strategies for the uneven recovery, https://www2.deloitte.com/content/dam/insights/us/articles/talent-edge-2020-redrafting-strategies-for-the-uneven-recovery/DUP98_TalentEdge2020_RedraftingTalent.pdf
9. Sociabble, 10 Stats That Prove the Impact of Employee Advocacy, https://www.sociabble.com/blog/10-stats-impact-employee-advocacy/
10. CMS Wire, 2015, 4 Trends in Workplace Communication, https://www.cmswire.com/cms/social-business/4-trends-in-workplace-communication-infographic-027762.php
11. David MacLeod & Nita Clarke, Engaging for success:enhancing performance through employee engagement, https://engageforsuccess.org/wp-content/uploads/2015/08/file52215.pdf
12. Canada Life Group, 2019,
Employers not doing enough to communicate benefits, https://www.canadalife.co.uk/our-company/news/employers-not-doing-enough-to-communicate-benefits/
13. Smarp, 2019, What Is the True Cost of Poor Employee Communication? https://blog.smarp.com/what-is-the-true-cost-of-poor-employee-communication