· 7 min read · Features

Employee Benefits: Public sector - Local heroes

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Research produced for HR magazine by Best Companies shows that local councils benefits' provision isn't lagging so far behind the private sector as you might think. Peter Crush reports.

Employee assistance helplines, private health insurance, 75% gym membership discount, health MOTs and a choice of £100 or a day off to celebrate company awards. This sounds like a great place to work and officially it is. It has just been voted the number one company to work for by Best Companies - but for local councils.

You read correctly. Boasting a portfolio of benefits any private-sector company would be proud of is Wychavon District Council, serving an area just 260 square miles (with 116,900 people), in rural Worcestershire. It has just been voted the Best Council to Work For 2008. "We're willing to have a go at anything," says Wychavon's personnel, payroll and development manager Kim Stallard. "In the past year we've developed a staff support programme that is extendable to families, as well as private medical insurance that is 75% subsidised by us. We view these things not as costs, but buffers to help people respond to the changes society as a whole is going through. We don't, for example, have any core hours, but we still maintain all our services. The private sector could learn a lot from this."

To those in the know perhaps it is unsurprising councils are upping the ante in their benefits provision. Typically branded cash-strapped but often accused of being profligate with the public purse, since November 2007 the local government Pay and Workforce Strategy has recognised that, of councils' five priorities, having 'pay and reward structures that attract, retain and develop a skilled and flexible workforce while achieving value for money in service delivery' must be one of them. To do this, more councils are recruiting from the private sector, and having to reward them accordingly. Enfield Council in London, which shifted 90% of its recruitment online to Monster.co.uk in 2007 (and saved £1 million in the process), is doing that. It now recruits 8% of its hires from outside the public sector.

To analyse just how local councils fare in their benefits provision, HR magazine asked Best Companies, compiler of the Best Councils to Work For list, to do an exclusive cut of the data to reveal exactly what benefits the top 25 councils offer. In addition, (and at this point we need to say the benefits a council offers are just a small part of the calculation for ranking councils), HR magazine compared the benefits top 25 councils offer against what other councils offer overall to see if there was any anecdotal link between benefits provision and ranking. A total of 57 councils were available for comparison.

From a purely 'benefits offered' standpoint the research shows there is a wide variety in what councils offer. Of the 21 benefits recorded by Best Companies, there are only two that all of the top 25 councils offered - flexi-time and job sharing, historically popular public-sector benefits. There is only one benefit - free private healthcare for dependants - that none of the top 25 councils offer, meaning there is a pool of 20 benefits that are offered by at least some councils. The council offering the most was Broadland District Council, with 15 of them (the average is slightly more than 10). The worst were Waverley and Warwick District Councils with just six each, although even here there is an interesting irregularity. Waverley is the only council in the top 25 list to offer free private care to spouses.

The top five benefits offered all relate to working hours (job-sharing; flexi-time; homeworking; reduced hours and compressed hours). Of the larger list of 57 councils, three-quarters offered all five. Significantly, among the top ranked 25, this figure leaps to 92% offering all five. In fact overall, top 25-ranked councils performed better for benefits provision than the average of the entire 57. Top 25-ranked councils recorded higher provision of benefits than the average in all but three of the benefits measured for all councils, suggesting there is a link between benefits provision and ranking. (Best Companies ranks according to scores for engagement - see box, p7).

But do these findings reveal anything new about how councils are reacting to the market, and improving their offering? Not only does Wychavon offer an on-site creche, nearly half of all entering councils now offer a wellness programme. This is a major departure for councils. Also notable is the 70% overall (and 80% among top 25 councils) that offer childcare vouchers - again very much a private sector benefit. Free private health is also offered by a fifth of all councils entered, and by nearly one third of top 25 councils.

However, only eight of the top 25 councils offer a wellness programme.Second-place Chorley Council is one. It specifically focused on this after its 2007 entry into Best Companies (where it came 10th), revealed wellness to have one of the lowest scores among employees. "This was a wake-up call," says Lorraine Charlesworth, its corporate director of HR and OD. "Since then we have introduced subsidised t'ai chi, Pilates and aerobics, a stress management scheme and run health assessments, set up football, netball and bowling teams, and even negotiated reduced golf lessons and golf with local clubs."

According to Charlesworth, many of these benefits hardly cost anything. "Being a local council helps us negotiate discounts with local businesses," she says. "We don't have money, but we do feel we are inventive with what we try."

It is interesting to note how private companies compare in the same list of benefits (p7). Among the top five flexible working-related benefits, councils win in all of them. Other areas where they are ahead include annualised and term-time-only contracts. Where business does better is most definitely in sabbaticals, performance-related pay, flexible benefits and healthcare - all of which cost money to introduce.

But councils are catching up. Chorley has approved a three-year workforce development plan, of which performance-related pay is scheduled for year three, and plans to add trading pay for holiday. In addition, one third of top 25-ranked councils (and 19% of participating councils) now say they offer 'flexible benefits'. Historically, this was something they did not do. But according to Best Companies, six of the top 25 now offer it - Epsom and Ewell (see left), Aberdeenshire, Broadland District, Castle Point Borough, Kingston, Runneymede and Stratford councils.

"These do not fully offer flexible benefits in the strictest sense of the term," says Colin Miller, reward manager, Kent County Council. "What they are offering - as we are also doing - is a more 'flexible approach' to their choices of benefits." At the council an intranet enabling staff to access discounts in more than 1,500 stores has recently gone live, while other voluntary benefits such as childcare vouchers, Cycle2Work and mobile phones can also be applied for.

So when will councils' offerings be on a par with the best of the private sector's? The divide is narrowing, so the chances are it may not be too long at all. "Some interesting research has stuck in my mind," reflects Miller. "Council employees who take up salary sacrifice (SS) benefits represent a sixth of the expected turnover rate. It might be that they are less likely to leave anyway, but it's definitely food for thought."

THE RANKINGS

Best Companies ranked councils according to their engagement scores. It measures engagement against eight criteria - leadership; wellbeing; my manager; my team; my company; personal growth; giving something back and fair deal (the latter specifically asks employees to rate their pay and benefits).

Pete Bradon, Best Companies' head of engagement, says: "We've found the benefits staff receive contribute a 2%-3% swing to someone's engagement score. It's small but it does have a bearing." He adds: "We believe the spread of benefits provided by councils reveals there is no Holy Grail. However, there is a strong relationship between managers 'listening, not telling' on engagement - potentially up to 82% - and because not all people want the same benefits, 'inflicting' benefits without listening to what employees want has strong disengaging potential."

Bradon says: "HR wants to find a list of benefits that will 'do' engagement, but this is to look at things simplistically. What really matters to people is how well people think they are doing compared with others - the 'fair deal' part of our measure. In difficult times I would even suggest removing benefits and giving people the equivalent pay rise."

% of top 25 % of all % of top 100
councils where councils private firms
it is available where it is where it is
available available
TYPE OF BENEFIT
Job sharing 100 98 76
Flexi-time 100 96 44
Homeworking 92 91 77
Reduced hours 92 84 92
Compressed hours/days 92 74 47
Childcare vouchers 80 70 90
Subsidised sports facilities 72 70 66
Annualised hours 48 63 15
Term-time only contracts 60 61 39
Career breaks 48 46 46
Wellness programme 36 46 72
School hours contract 44 40 36
Staggered hours 40 35 38
Sabbaticals 44 33 64
Performance-related pay 36 32 75
Free private healthcare 28 19 91
Flexible benefits package 28 19 36
Free sports facilities 8 9 22
Free private healthcare for spouse 4 4 60
Free private health care for dependants 0 2 54
On-site creche 4 2 2

EPSOM AND EWELL COUNCIL

Not only is Epsom and Ewell Borough Council one of the few councils to offer the distinctly private-sector-style performance-related pay, it also lays claim to be one of just six councils to offer flexible benefits. "I joined three years ago and wanted a change of culture that modernised our pay and benefits structure and implemented a bonus scheme of between 2.5% and 10% of basic salary," says director of HR and communications Irene Clarke (pictured). Clarke says she has introduced a 'pick 'n' mix flexible scheme where employees can see their total rewards statement, and mix what they have accordingly. Choices include childcare vouchers, Cycle2Work and any other benefits that offer staff a NI saving. These supplement other new benefits introduced in the past 12 months, including EAPs, childcare, subsidised sport (where the council pays £20 for every £30 cost to the employee), annualised hours, and once-a-week aromatherapy. It is this month just about to launch Staff Advantage to give discounts in local shops.

For Clarke, the improvements in benefits offered are recruitment and retention-focused. "We're situated just half an hour from London," she says. "It's easy for people to work in the city; we have to attract people to work for us."

She says the policy is already yielding results: "Our staff turnover was more than 20% a year ago. Now it is 12.75%. We are also hiring more people from the private sector. We recently advertised for a CEO, and got 11 applications. Normally we'd get four or five."