What are off-the-shelf voluntary benefits packages?
Voluntary benefits are additional benefits that employers can offer to their employees alongside their salary. Employees pay for the voluntary benefits they choose but usually receive these benefits at a lower price due to group discounts.
Unlike bespoke voluntary benefits packages that are tailored to individual workforces, off-the-shelf packages are a pre-packaged proposition offering a wide range of discounts and special deals aimed at helping employees make their money go further. These schemes are popular with organisations of all sizes, especially for those with a diverse employee demography because of the wide variety of discounts and offers that can be included. Employers can brand their scheme with their organisation's logo, but otherwise, they are fairly generic.
Popular benefits include retail, leisure and lifestyle options, ranging from high-street discount vouchers, restaurants and takeaways, discounted entry fees to theme parks, to tech products, such as phones and laptops, discounted gym membership and skills training courses.
Employees also have instant access to multiple ways to save via e-vouchers and e-gift cards, discount codes, top-up cards and reloadable cards. Several providers include an online cashback facility on their voluntary benefits web portal, which provides employees with a percentage discount when they buy from a retailer's website using a unique link that the discount platform generates. The percentage of the discount goes back to their discount platform account, and the money saved can be used for further purchases or transferred to their bank account.
The various benefits can be bundled into a single off-the-shelf online platform that employees log onto via the web or from an app on their phone or tablet, to keep up to date with the deals and discounts on offer, make their purchases online, or print out a voucher to use in-store. Remote access is especially useful for hybrid and mobile workers.
Implementing these schemes presents various advantages to both employers and employees. Communicated well, they can help employers to attract more candidates, and improve their staff retention. Benefits that support people’s financial wellbeing by providing access to savings and discounts on everyday purchases make a tangible impact on employees’ finances, particularly in the current high cost of living climate. In turn, this increases employee engagement.
What are the cost implications?
The costs of setting up a voluntary benefits scheme vary between providers and packages but usually depend on the number of employees involved. A decade or so ago, set-up costs were high and schemes were restricted to organisations with a relatively high minimum headcount, which excluded smaller employers. Today, although a minimum headcount is still required by many providers, the scheme set-up costs are lower and pricing models have changed. Some providers now offer a per person, per month or per annum proposition. Off-the-shelf packages can also vary by benefit inclusion, with some providers offering bronze, silver, and gold packages, with each option priced slightly differently.
Although they are cost-effective to run, good communication of the schemes, via leaflets, email and messaging, for example, is crucial to making employees aware of the value of the benefits on offer and ensuring they understand how the scheme works. Other factors to consider include the management information generated by the platform, which employers can use to analyse employee purchasing decisions. They can then use that information to improve their benefits offering in the future.
Are there any tax or legal issues?
Lifestyle savings and shopping discounts are often a mainstay of off-the-shelf benefits packages because they do not attract any additional tax. These particular benefits offer an effective way of stretching an employee’s net pay without it significantly impacting employers' costs.
What are the current market trends or developments?
Employers are more aware than ever of the need to support employee wellness, and many now include wellbeing benefits in their voluntary benefits platform. One new trend in the off-the-shelf voluntary benefits space is health. Although many organisations are making cutbacks in people spend, rising costs and the pressure on the NHS and GP services are prompting more demand for health-related benefits.
With escalating private medical insurance (PMI) premiums, employer-funded health benefits are under pressure, and some employer-funded options are being restricted or even withdrawn completely. However, employee demand is still there, and there has been an uptake in health cash plans, virtual GP services, health screens, and other employee-funded options to bridge the gap left by employer-funded elements and NHS provision.
Who are the main providers and what types of schemes do they offer?
Avantus, Love2Shop, Perkbox/Vivup, Pluxee, Reward Gateway Edenred, Thanks Ben, and Zest are some of the main providers of off-the-shelf voluntary benefits schemes. March 2024 saw Vivup and Perkbox combine to create an all-in-one platform incorporating wellbeing, benefits, employee discounts, and engagement.
