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HR Reward Survey 2011: Local laws concern global HR directors most

Employers with a global remit face contrasting challenges with their benefits provision to employers operating in the UK.

According to the HR Reward Survey 2011, sponsored by employee benefits company Vebnet and pensions advisor Standard Life, the biggest fear for UK HR directors and benefits heads is lack of employee appreciation or understanding of employee benefits (56% - up 4% since last year's report).

But for HRDs with a global remit, the main concern is local regulations and legislation (62%), compared to only 41% who cite employee understanding and appreciation as a primary concern.

The online survey of 516 decision-makers in the HR and employee benefits sector shows that for employers in global firms, culture has taken precedence over communication.

Nigel Sullivan, HR director at telecommunications company TalkTalk, told HR magazine: "For most organisations, an enormous amount of thinking goes into the design, benchmarking and technical execution of a range of employee benefits. Some of this is driven by legislative changes that are often localised, a company's desire for harmonisation and consistency by fads driven out of the consultancy world dreaming up new products to sell.

"Communication to people about what they have really got in terms of breadth and depth of benefits and the actual package value beyond the straight cash element is probably the most important - and in many cases the least developed part - of many a reward strategy."

Patrick Gilbert, principal at HR consultancy Mercer in charge of its employee research across Europe, is also disturbed by the findings - especially given his estimations suggest between 15% and 30% of an employee's total reward comes from employee benefits and not basic salary.

Gilbert said: "Our July research found only 44% of employees think they have the right amount of information to make an 'informed decision' about their employee benefits.

"Employers take benefits communication for granted and are failing to invest in this. It means organisations are not leveraging the investment they have already made in employee benefits - especially if they have implemented a flexible benefits scheme which requires understanding and action on the employee's part."

According to Mercer's analysis, better understanding of employee benefits among staff leads to satisfaction with provision, increased employee engagement and, in turn, higher productivity.

But Gideon Schulman, HR director at online casino PokerStars, is working to tackle the issue in his own organisation. "I am not surprised at all by the survey finding," he told HR. "That is why at PokerStars we not only produce annual total reward statements, we also produce benefits statements that give a breakdown of each benefit and the cost breakdown to the employer and employee."

Turning to the issue of global challenges employers face in employee benefits, Gilbert added: "If employers are worried about regulations around perks, they will in turn spend less time communicating benefits and will not be able to engage staff with them.

"The same logic applies abroad - but if there is more legislation and regulation, communication to employees becomes all the more important," said Gilbert.

Read more of the key findings of the report