How to drive employee motivation, engagement and retention with flexible benefits 

Motivation can be defined in many different ways, however in a nutshell it’s a person’s willingness to put in a high amount of effort in order to achieve certain goals. 

What a person might gain individually also plays a part in motivation. 

It’s thought that there are 3 key aspects to employee motivation which are: 

• The individual employee’s needs 
• Their expectancy of a desired outcome 
• Their job and how it’s structured 

The final 2 points can be addressed through an employee’s job design and ensuring employees are rewarded fairly for their efforts.  

We’ve covered this in more detail in our ‘The theory behind employee motivation and retention’ blog where we look further at how you can boost employee motivation by other means. 

For now though, lets focus on how flexible benefits can motivate employees. 

Making employees feel valued through personalised benefits 

Flexible benefits are a way for HR and the business to really show they care about employees and helping them meet their needs. 

Often, a company will implement a range of employee benefits that they believe will best suit their staff and their needs. And there’s nothing wrong with this at all, in fact it’s an approach to benefits all companies should have. 

Flexible benefits, however, takes this to the next level. Employees can tailor their employee benefits experience to their wants and needs making the most of their employee benefits package. Some employers even provide a flexible benefits allowance for employees to allocate towards whichever benefits suit them best. 

By going the extra mile to ensure staff get the most from their benefits, the company is demonstrating a real commitment to helping staff meet their needs.  

Employees, therefore, feel more valued. Consequently, employee motivation and engagement increase, allowing your team to achieve goals.

Building positive relationships and engagement 

Another important way flexible benefits motivate employees is the way in which they help build the relationship between the employee and the company. 

For example, you may offer employees the option to spend some of their flexible benefits allowance on a Dine Card. 

When taking advantage of this benefit, say when using the Dine Card when out with friends or family, the employee will make the link between the benefit and the company.  

It may even be the topic of a brief conversation, spreading positive word of mouth about the company as an employer.  

In-turn, flexible benefits have helped build a more positive relationship with employees, which aids their motivation to achieve their goals and the goals of the company.  

Solving key problems and boosting employee engagement 

Flexible benefits can motivate employees further by helping solve problems that may have already been inhibiting motivation. 

It could be financial worries or health worries for example, which flexible benefits can help solve. 

By giving employees more options when it comes to their benefits with flexible benefits, employees can take advantage of the options that will help solve the key issues in their life. 

For example, health worries can be solved where an employee can utilise health and wellbeing employee benefits through flexible benefits technology. 

The impact on employee motivation and engagement is even greater where the employee can make the direct connection between the resolution of their issue and the flexible benefits their employer has provided. 

This again helps improve the relationship between the employer and the employee, improving motivation even further. 

How to motivate staff fairly 

Another area we covered in our article on the theory behind motivation is the idea of equity. 

When it comes to rewarding staff, equity is hugely important. Employees want to know they’re being rewarded fairly, relative to the effort they put in and the quality of their work but also relative to the rewards handed out to their colleagues. 

Flexible benefits help make your employee benefits package more applicable and beneficial to more of your staff. This makes it fairer. 

Employees are more likely to feel they get the same or similar advantages from their benefits package as their colleagues. 

Therefore, it’s more likely that flexible benefits will motivate employees than a standard employee benefits package. 

If you’re looking to take your benefits to the next level and really motivate your team, flexible benefits could well be the way forward. The strategies for motivation will centre around firstly implementing the benefits and then expanding them when you get the required uptake and engagement. 

These are just a few of the ways in which flexible benefits motivate employees and drive employee engagement. To see the real effects of flexible benefits on your team, implement flexible benefits in your business. Flexible benefits can have an impact for both the employee and the employer. Some of the employee benefits include the following: 

• Greater choice of benefits 
• Staff feel valued and in control 
• Employees can adjust scheme contributions to suit wellbeing 
• Self-serve capabilities 

The employers also reap several benefits from implementing a flexible benefits platform: 

• Increased employee engagement and motivation 
• Improved NIC savings from salary sacrifice schemes
• Reduced admin and improved reporting 

To find out more about the full benefits of the platform, visit our ‘Flexible Benefits’ page and learn more. 

The Autumn Budget of 2024 announced a series of changes, of which the rise in employer National Insurance Contributions (NICs) look to be the most impactful. The contributions are rising to 15% which can mean an extra £900 per employee per year in NICs. Flexible benefits are an effective way to offset the rising costs. 

The way to offset these costs is with salary sacrifice schemes which form an important part of a flexible benefits offering. The employee is able to sacrifice a portion of their gross salary in exchange for a non-cash benefit, like Holiday Trading or the Cycle to Work scheme. The employee lowers their taxable income, therefore saving on income tax and NICs. The employer also saves on the NICs as a result. 

There are increased benefits when you drive employee engagement with flexible benefits. The more uptake you can drive, the more savings you can make. For example, based on our findings and reporting, one company with 2,000 employees in Infrastructure Services achieved an estimated 46% up-take with their Holiday Trading scheme in 2024, saving over £1.3m in salary and NICs. 

For more details on how much flexible benefits can save you on NICs, download our ‘Navigating Rising Costs: How Employee Benefits Can Help Offset NI and Wage Increases’ report. 

Flexible benefits are an effective way of driving employee engagement and motivation. Greater engagement can also come from the platform you implement. Our Flexible Benefits platform combines all the best features in one package, with a wide range of flexible benefits schemes, with the option to create your own as well. The customisation goes beyond just the benefits, with different rules being available for different cohorts, all available on one platform, and with dedicated support. 

The platform also has advanced integration with the HR suite. Our PeopleXD Evo solution is AI-enabled and allows you to manage your entire employee lifecycle in one unified, modular software. With powerful people analytics, you can also track the usage and engagement of your benefits platform, allowing you to make decisions to improve your offering. Visit our HR software page for more information.