The importance of worker importance

In his regular blog for Employer News, Steve Herbert discusses the importance of individual appreciation and engagement.

“900 years of time and space and I’ve never met someone who wasn’t important.”

The Eleventh Doctor, Doctor Who

Teamwork.  Virtually every company in every sector of industry likes to talk about it.  And various tired phrases and tales are used by most organisations to illustrate exactly why it is so important, and how it should ideally work.

One of the most common teamwork stories is that relating to a “walk-about” at the headquarters of the National Aeronautics and Space Administration (NASA) by President Nixon.  As part of this meet and greet exercise Nixon spoke to one of the cleaners on duty that day.

The President reportedly asked the man; “And what do you do?

The cleaner apparently replied; “Sir, I’m helping to put a man on the moon!”

The story may of course be entirely apocryphal, but it’s still a great line that drives home the reality that every large organisational machine must still rely on the smallest of cogs to ensure operational efficiency and achievement of corporate objectives.

The individual in the team

The janitor in the story above clearly had a commendable sense of team purpose, yet that may not be so true of everyone.

The truth is that many – perhaps most – employees will put themselves and their family before some aspirational corporate vision that they so often really don’t really feel a part of.  Employers can parrot motivational stories and rhetoric all day long, but their workers are only likely to engage with the corporate mission if they recognise the fundamental truth behind the words.

And the reality is that good corporate messages are often undone by visible evidence of poor company culture.

Workers recognise inequality

Employees nearly always spot signs of unjust treatment and/or inequality within any organisation.  And if left unchecked this has the potential to fester.  In a worst case scenario it might even damage the teamwork ethic of the employer’s workforce.

Of course in recent years we don’t have to look too hard to find evidence of a compromised corporate culture in the United Kingdom.  Diverse examples include the difference in pay between male and female workers, the #MeToo campaign, and the ethnicity pay gap.  The gulf between executive and worker salaries is another key indicator, and this last point is particularly relevant given that larger companies will soon be required to publically report on pay ratios within their organisation.

Many organisations are of course now recognising these challenges and are already embarked on a mission to change their approach to such issues.  If done well culture change can benefit both employees and employer, whilst also embedding a framework of fairness and thus encouraging better teamwork too.

There are of course some big steps that employers are considering here, including positive discrimination and employee representation at board level.  Yet less eye-catching solutions might be no less important.  And one such area might well be the wider democratisation of the company-sponsored Employee Benefits package.

Levelling-up the Employee Benefits offering

Let’s use a simple example to explain how this might be achieved.

Most good employers will provide a Group Life Assurance scheme.  This relatively low cost benefit will typically provide a one-off payment of 4 x salary to the employee’s loved ones in the event of death.  This sum can be used to settle outstanding financial commitments and/or ease the inevitable loss of income arising from the loss of a working age family member.

Whilst the level of cover is set at a multiple of each individual employee’s salary (so will vary significantly), it nevertheless remains entirely proportionate to the income earned by the individual.  This makes sense as the outgoings and financial commitments made by each employee during their life are likely to be directly linked to the level of their salary too.  So objectively this seems like a solution that protects all employees fairly.

What perhaps makes less sense is that so many employers choose to markedly increase the multiple of cover offered for those employees achieving senior status within their organisation.  Cover levels of 8 or 10 x salary are not unusual for executive level workers.

Sometimes such an increase in cover is justifiable as part of an historic adjustment to benefits, or to allow for significant non-salary related income, or for genuine recruitment and retention purposes.  But it’s not uncommon to find no particular rationale behind such a benefits structure other than offering a rather nice perk to company executives.

But does a senior employee earning £100k really need to increase life cover from 4 to 10 x salary?  And if so, why would a worker at £25k not also require such an increase in cover too?  A case for equality certainly needs to be looked at here.

An equitable solution?

A fair way of resolving this issue would be to perhaps uplift cover for all workers to (say) 5 or 6 x salary.

Such an approach will be easier to justify, communicate, and administer.  And the savings from not increasing the cover for senior individuals to a much higher rate will often go a very long way towards meeting the cost of the cover for others in the workforce too.

Yet the benefits of such an approach might well go further than that.

The levelling-up of benefits will provide tangible evidence of the organisation’s commitment to fairness across all grades and workers.  This can only be a good thing in the ongoing battle for improved teamwork and productivity.  Such an approach will doubtless also sit much better in the new era of wider disclosure and reporting that is gradually embedding within the United Kingdom’s usual business practices.

The importance of worker importance

It’s often said that there is no “I” in the word “Team”.  This is of course true, but there is a “me” in there for any employer who cares to look carefully.  The reality is that every employee is an important component of the employer’s team.

The bottom line is that employees are likely to become much better team players if they believe the corporate structure is intended to be fair to all, and significantly recognises the importance of every single employee.

Steve Herbert is Head of Benefits Strategy at Howden Employee Benefits