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As companies compete to be regarded as an ‘employer of choice’ to attract the best quality talent into their organisations, the way benefits and total reward packages are structured becomes a key factor.

Everyone that works in an organisation is different, with unique social and family arrangements, so the benefits they are offered need to reflect this in order to have the widest appeal. Over someone’s career their reward profile also changes, so Flexible Benefits enable employees to match their employer’s offer to their own circumstances as they change, e.g. at some stage in their career someone might value childcare vouchers over gym membership, or pension contributions to holidays. Flexible Benefits can help organisations stay competitive in the recruitment market, but they may also help improve retention, while motivating employees to achieve company goals.

There are additional benefits to employers introducing Flexible Benefits. Firstly, they can help ensure money and resources aren’t wasted on brokering for Benefits that aren’t going to appeal to, or motivate, employees. Schemes can also improve internal communications, perceptions of fairness through harmonisation of reward and help integrate a workforce through reinforcing company brand, values and culture.

In the US for example, flexible healthcare accounts are increasingly being introduced as a key benefit to employees in a place where there are limited public health services. Across the pond in the UK, the portfolio of benefits spans the usual suspects like Private Medical Insurance, but it also includes brokering a broad range of products such as Child Care Vouchers, discount Shopping Vouchers and even Pet Insurance.

Flexible Benefits are not a new concept, they have been around for over 20 years, and although the trend towards introduction of Flex schemes in UK companies in the private sector has increased dramatically over the last five years, still only just over 1 in 10 operate a scheme. Those that do are largely Corporate Enterprises with over 5,000 employees.

Cost-effective benefits

One of the main factors deterring organisations from introducing Flexible Benefits is the perceived cost of implementation and roll out. However with Salary Sacrifice available on benefits, such as Pension contributions, companies can use their Tax and NI savings to make schemes cost neutral, sometimes within year.

For those organisations who believe they may be ready for a Flexible Benefits solution, a feasibility study can help assess potential savings and business benefits to be gained. Once the feasibility study is complete an approach that suits the company and the employees equally can be designed for implementation.

Aligning benefits with business strategy

At the point of implementation and annual renewal, companies gain an important window of opportunity to align their business strategy with employee reward. Flexible Benefits schemes can be adapted at this point to meet business objectives by motivating employees in a specific direction.  In addition to this, by giving employees more control over their reward package, it lets them match their rewards to their lifestyle.

Although not a new invention, Flexible Benefits schemes demonstrate a more modern, less paternalistic approach to Human Capital management. By giving employees more choice about the way they are rewarded, companies have more chance of implementing a scheme that will be more motivational and of wider appeal. Companies have the opportunity to maintain an important competitive advantage, being viewed as an ‘employer of choice’, while employees can decide what is going to add most value to their lives.

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