The facts:
What is an off-the-shelf voluntary benefits package?
An off-the-shelf voluntary benefits package is a ready-prepared scheme that employers can implement for staff, providing employees with access to retail discounts and offers. These discounts can be delivered to staff in either a digital or paper-based format. Off-the-shelf voluntary benefits packages can also include salary sacrifice-style arrangements, now referred to as optional remuneration arrangements. The limitations on the range of benefits that attract tax and employer national insurance (NI) advantages when offered via salary sacrifice arrangements came into effect in April 2017.
Some benefits, such as childcare vouchers and employer-provided childcare, ultra-low emission vehicles (ULEVS), bikes-for-work schemes and associated equipment, contributions to registered pension schemes, and pensions advice, are exempt from the changes so still generate employer national insurance (NI) and tax savings under the limitations.
Where can employers get more information?
Find out more by visiting Employee Benefits' voluntary benefits channel.
Who are the main providers?
Allsave, Edenred, Fair Care, LogBuy, Love2shop, Next Jump, People Value, Personal Group, P&MM Employee Benefits (part of Sodexo), Reward Gateway, Vebnet, Wider Plan and Xexec.
Voluntary benefits packages can be offered in two ways; as an off-the-shelf package or as a bespoke offering. Bespoke package enable employers to tailor the benefits that they offer specifically to their individual workforces, while off-the-shelf voluntary benefits are a ready-made benefits package that enable employers to give staff access to a range of high-street discounts and offers.
This can help employees make savings on items such as shopping, holidays, gym membership and activities via an easy-to-administer online platform or portal. These packages appeal to organisations with a varied workforce demographic, as the range of discounts provided ensures there is something that will appeal to all employees.
Off-the-shelf voluntary benefits schemes can include benefits that can be offered via salary sacrifice arrangements. However, employers should bear in in mind legislative changes impacting such arrangements that came into effect in April 2017. This imposed limitations on the range of benefits that generate tax and employer national insurance (NI) savings when offered through salary sacrifice arrangements or, as the schemes are now named, optional remuneration arrangements. Some benefits, namely childcare vouchers and employer-provided childcare, ultra-low emission vehicles (ULEVS), bikes-for-work schemes and associated equipment, contributions to registered pension schemes, and pensions advice, remain exempt from the changes.
The types of benefits featured in off-the-shelf voluntary benefits packages is also evolving, with health and wellbeing related benefits becoming more common. This could include mindfulness training to support an employee's mental resilience, or credit checks, which can help combat stress linked to financial wellbeing.
Although schemes can still include paper vouchers as a means of providing discounts and vouchers to staff, digital alternatives are now considered the norm. This includes online discounts, cashback or percentage discount offers, reloadable cards, and instant e-vouchers or digital codes.
Staff can access off-the-shelf voluntary benefits via a dedicated benefits portal with the option to utilise single sign-on technology. This can be integrated with an organisation’s existing network for a more seamless connection to the voluntary benefits portal. Portals can be customised with an employer's branding.
The rise of apps and mobile access has also influenced how employees engage with off-the-shelf voluntary benefits. Smartphone apps enabls them to access savings when on the move, while mobile log-ins and quick-response (QR) codes also allow easy and instant access to benefits.
Many providers are focusing on mobile optimisation for their products, such as developing apps that take advantage of the mobile environment, for example utilisating push notifications and showing discounts based on an individual's current location.
Apps and mobile access make off-the-shelf voluntary benefits useful for employers which have a geographically dispersed workforce or for those with a workforce population which does not use a computer in their day-to-day role, for example, retail staff. Mobile access is also popular with employees; according to Thomsons Online Benefits' Global employee benefits watch 2016-17 report, published in September 2016, as 70% of respondents would like to access their employee benefits from a mobile device.
The cost of implementing an off-the-shelf voluntary benefits package can vary greatly depending on staff numbers, because the price is usually calculated as an annual unit cost per employee, per year. Larger organisations, for example those with 10,000 employees, can use their scale to generate a better deal with providers than smaller organisations, such as those with under 100 employees.
There are many ways in which the off-the-shelf voluntary benefits market is expanding. For example, People Value is to launch a new, fully automated off-the-shelf voluntary benefits offering this summer, which will enable employers to take advantage of software-as-a-service technology to create a free voluntary benefits portal and related employee communications, providing log-in and URL details to staff.
This free portal will provide access to People Value's standard package, featuring high street and online reloadable cards, discount vouchers and codes, competitions, and a monthly lotto feature. Employers can opt for an upgraded benefits selection in addition to the free package for approximately £10 to £15 per employee per month. This would also include discounted gym membership, cinema tickets, and local dining offers, as well as gadget insurance, breakdown insurance, and an employee assistance programme (EAP).
Some employers are now using their voluntary benefits portal as a communication channel, according to providers such as Xexec and People Value. This is being driven by employers' experiences of staff logging on to view their offers and discounts more frequently. This, in turn, has led to employers looking to utilise their voluntary benefits platform to promote wider organisational communications to staff. Some voluntary benefits portals also include a dedicated news section which employers can augment.
Embedded videos or online information regarding new software, for example shift pattern booking software, is also being added to voluntary benefits portals by some employers.
How employers are promoting off-the-shelf voluntary benefits themselves has also evolved, with employers using dedicated pages on social media to showcase benefits to staff. Traditional communication methods, such as email, intranet sites and posters, are also still used to promote voluntary benefits packages.
Statistics:
46% of employer respondents offer retail or leisure discounts as part of a voluntary benefits package (Source: Employee Benefits, May 2017)
64% of employer respondents provide dining cards within their voluntary benefits offering (Source: Employee Benefits, May 2017)
33% of employer respondents offer gym membership through a voluntary benefits package (Source: Employee Benefits, May 2017)
59% of employer respondents outsource their voluntary benefits or employee discounts schemes (Source: Employee Benefits, May 2017)
