Another FBT year has just come to an end. For most organisations, that means the compliance work is done and attention moves on. For CEO’s concerned about staff retention and attraction, it should prompt a different question: are we spending on benefits that our people actually value?

In our experience, the answer is frequently no — largely due to historical programs not being refreshed.  What began as a competitive offering can quietly become misaligned with how people work, what they need, and what actually influences whether they stay.

Where the Value Is Leaking

Most organisations already have value leakage in their benefits — they just don’t have visibility of it.

We consistently see the same patterns:

• Benefits that no longer reflect workforce needs – what resonated five years ago may not land with today’s employees. Demographic shifts, hybrid working, and changing life priorities all affect what people find meaningful.
• High-cost benefits with low perceived value – vehicle arrangements, in particular, are often one of the most expensive components of a benefits program and one of the most common sources of misaligned spend.
• Legacy allowances creating internal inequity – historical travel, LAFHA, and site-based arrangements frequently no longer reflect how work is actually performed. They add cost and complexity without adding value.
• Packaging structures that obscure true employment costs – when the full cost of a benefits program isn’t visible, it’s difficult to make informed decisions about where to invest or reallocate.

Collectively, these issues have a material impact on both cost and employee experience — and by extension, on retention.

The Retention Challenge

The link between benefits and retention is often underestimated. Employees who feel their total reward package is out of step with their contribution or circumstances are more likely to disengage — and eventually leave. The risk isn’t always visible until it’s too late.

The relevant question isn’t just ‘what are we spending?’ It’s ‘what is that spend achieving?’ A benefits program that consumes significant budget but generates limited loyalty or engagement is a cost without a return.

We’ve seen organisations improve both retention outcomes and cost efficiency by revisiting their benefits mix — not by cutting, but by reallocating spend toward what their workforce actually values.

Vehicles and Packaging: Still Fit for Purpose?

Vehicle benefits remain one of the largest and most expensive benefits. Their role is also shifting. Organisations are reassessing whether vehicles remain appropriate for their workforce, how EV policies are changing expectations, and whether current structures are optimised from a total employment cost perspective.

Legacy Allowances: The Hidden Complexity

Many organisations still carry historical allowances tied to travel, living-away-from-home, or site-based work. These arrangements often no longer reflect how work is actually performed. More importantly, they can distort internal equity, increase administrative burden, and add cost without clear value.

Revisiting allowance arrangements is rarely front of mind — but in our experience, a review and refresh of allowance arrangements can deliver significant savings. 

The Strategic Opportunity

The end of the FBT year provides a natural prompt to assess whether your benefits program is doing what it should. For CEOs focused on retention, the relevant questions are:

• Which benefits are people actually using — and which are effectively invisible?
• Do our highest-cost benefits generating proportionate value and engagement?
• Where are legacy arrangements creating inequity or unnecessary cost?
• Does our current program reflect how our workforce actually lives and works?

Most organisations know there are inefficiencies in their benefits program. In our experience, few address them systematically.

Our Suggestion:

A structured benefits review provides clear visibility of where spend is and isn’t working, identifies opportunities to improve cost efficiency, and helps build a benefits structure that your people will actually notice and value.

Outcomes and strategies from reviews undertaken now can be introduced with effect from 1 July.

If you’d like to explore how your benefits program could be enhanced, contact us.

 

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