With the economic downturn comes the challenge of finding the right balance between managing costs and providing a competitive reward package. Companies can go some way to achieving this balance by introducing a flexible benefits scheme.
Flexible benefits can help employers increase the understanding and encourage greater take-up of certain benefits. For instance, one of the key drivers behind Freshfields Bruckhaus Deringer’s scheme, Benefits Plus, was to increase the understanding, and encourage greater take-up, of our group personal pension plan (GPP), which we offer on a matched contribution basis. By allowing staff to contribute to their pension via a salary sacrifice arrangement, they gained substantial savings on tax and national insurance (NI). We also decided to share the employer NI saving to boost employer contributions, giving an even greater incentive for employees to engage with their pension. Membership in the GPP increased by 25% as a result.
Ultimately, Benefits Plus has given our employees more choice, flexibility and control over their benefits, helping them to maximise the value of their reward package.
Of course, during the recession many employers will be looking to reduce the costs associated with core benefits such as private medical insurance (PMI).
Similarly, we pay for all of our employees to have PMI and so are continually looking at creative ways to manage the everincreasing annual premium. For example, our PMI provider encourages our employees to engage in a healthier lifestyle by offering rewards as an incentive.
Employers that have a healthier workforce can expect to see fewer claims made and therefore enjoy lower premium increases. More than 40% of our employees have already actively engaged with this new healthy lifestyle initiative. In conjunction with this, we are now running regular health and wellbeing days with our PMI provider, which cover a wide range of topics, including stress management and healthier living.
It will not be one single thing that makes the difference for employers and employees in 2009 but many, so it is essential for organisations to continue to monitor and improve their reward offering where possible.