Employers should not be seduced by flashy graphics when choosing a flex platform, but they must ensure it performs the functions they want efficiently, says Jenny Keefe.
A flexible benefits website with sleek looks is easy to fall in love with. But employers need to do a little homework before rushing to sign with a provider, because there is a lot more at stake than smart graphics these days. It is crucial to consider issues such as report-generating, data upload speed and security. There are also a number of key questions to ask before selecting a flex technology platform.
How usable is the system?
How easy the platform is to use will have a big impact on how employees feel about a flexible benefits scheme. Employers should check to make sure there are no usability problems, such as lumbering download speed or browser incompatibility.
Steve Joyce, head of marketing at Ceridian, says: “Ease of system use is now a main priority. Look at the movement, look and feel of the flexible benefits system. It should be easy to navigate and change benefit choices, and clear to understand.”
What sort of management information is provided?
Management information (MI) enables employers to instantly number-crunch flex scheme data. At the click of a mouse, it is possible to create reports on the organisation’s savings from salary sacrifice perks, or produce statistics on the most popular benefits.
Mark Carman, sales and marketing director at Motivano, says: “Employers need to have as much access to management information as possible. They need to access live information to see if employees are using the service, especially during the period when benefits are elected. Organisations also require the ability to see which perks are popular, to ensure they are getting the best value for money.”
Ideally, the platform should automatically collect and collate numbers, emailing them at selected intervals, such as once a month. The provider should also offer training to everyone who will be using the system.
How much will it cost?
With belt-tightening being the order of the day, saving on platform costs is also a big consideration. Yet, surprisingly, the Employee Benefits/Towers Perrin Flexible Benefits Research 2009 found that 40% of employers do not know how much their flex scheme costs to run per employee.
Prices for flex platforms vary enormously, depending on an organisation’s size, the scheme’s complexity and the number of services required, such as communications or an employee helpdesk.
Johanna Lennon, flexible benefits consultant at Bluefin, says: “Cost is a crucial factor when picking a platform provider. Check whether you will have to sign up for a fixed period, such as three to five years.”
Most providers have an initial set-up charge, but systems are also hostage to software licence fees, and if the provider hikes the charge, a supposedly cheap platform can become a nightmare. Employers must check the licence fee is fixed before signing.
What self-service options does it have?
Many employers are encouraging staff to log on and choose their flexible benefits online. Providers offer self-service flex in varying levels of sophistication. Some are shop- window websites that offer little more than information about flex, while others are fullservice systems, enabling staff to pick flex options, model salary sacrifice savings and update personal data.
Philip Hollingdale, chief executive officer at software provider Staffcare, says: “During the flex election period, employees should be able to log in at any time. There should be a clear summary of the flex options.”
Outside this window, workers should be able to tweak personal details, such as addresses, children and bank account details.
Employers on the lookout for a flex platform must also ensure the self-service functions meet their own administrative needs. “Self-service for the employer typically involves content management and sending emails promoting the scheme,” explains Hollingdale.
Crucially, the platform should allow HR to easily complete everyday chores, such as adding joiners, assigning benefits and archiving leavers.
Who will be using the system?
Employers that are keen to maximise their platform’s value should consider who will be the most important system users. For most organisations, workers come first. Nikki Grigg, employee benefits consultant at Jelf Group, says: “Employees have to be engaged in the system. If they are not, it is pointless.”
Easy navigation, exciting design and speedy downloads are all essential for keeping staff engaged. One way for employers to establish the pluses and pitfalls is to find an employee and ask them to navigate the system before they buy.
That said, employers should also spare a thought for HR users. “Employees only have to use the system a few times a year, but HR users have to work with it most days,” says Grigg. “HR will be more concerned with dayto- day management tools, yet suppliers often skim over this area. They promote outsourced administration services and play down the importance of these tools.”
Board members’ needs should also be considered, says Grigg. “A finance director will want to analyse costs and true spend, a managing director will want to understand engagement, and a chief executive will want to understand employees in the sector.”
How secure is it?
An essential component of an employer’s new platform is its security system. James Crossland, business development manager at software provider NorthgateArinso, says: “The provider must operate to the very highest standards of data security. A client told me recently that one of its IT managers had managed to hack into their company’s new HR self-service system within 24 hours of it being installed. This poses a major security threat, and is a significant breach of the Data Protection Act.”
Should we go bespoke?
Buying an off-the-shelf flex platform is an obvious solution. Employers get a readymade and tested system without huge costs. “A standard ready-built system can provide a wide range of customisation options, including benefit scheme design and tailored communications,” says Ceridian’s Joyce. “This allows employers to alter the system to suit their needs without having to design a completely new platform.”
For organisations with more ambitious plans, bespoke platforms may be a better option. Building from scratch does involve serious cash, but the advantage is that the new platform can be tailored to meet the employers’ exact business, HR and reward objectives and then integrated seamlessly with existing IT, finance and HR systems. Many off-the-shelf systems can be adapted to meet employers’ needs, but largely this means alterations to some functions while the underlying technology remains the same.
How fast is it?
A provider should be able to advise employers how long the system will take to process transactions. Many simple tasks, such as running a report or changing an employee’s address, should be done instantly.
Other functions will take longer, says Staffcare’s Hollingdale. “A bulk data upload when a scheme launches or an annual flex renewal will take longer than an employee selecting a benefit. Features such as selecting benefits, changing data and running a report should be done in seconds. But bulk data uploads can take minutes or even hours.”
CASE STUDY: Platform is user-friendly
Making sure its flex platform was easy for staff to use was a key issue for Computershare. As well as selecting perks, employees can model their pension contributions and calculate how salary sacrifice plans will affect their pay.
The company, which has 1,483 workers, has a platform that offers total reward statements and voluntary benefits, as well as flex. Nick Oldfield, chief financial officer, says: “It is a self-service platform, but with an in-house account manager and account manager at [provider] Thomsons Online Benefits. It allows you to create and apply lifestyle events, if employee’s circumstances change, and to instantaneously open enrolment periods.”
Oldfield’s top tip for picking a flex platform is to start by asking as many questions as possible. “Look long and hard at suppliers and make sure the provider is the best fit, not only with product, but with company goals and ethos.”
Crucial questions to ask include “How easy is the platform to access and administer?” and “How can it help the organisation record and report on benefit trends?”, he says.
CASE STUDY: Rok solid on flex
Building services group Rok launched its flex platform in April 2008 after introducing total reward statements in January the same year. Reward leader Richard Sadler says: “Through the platform, people can view total reward statements, buy or sell holiday, or choose healthcare benefits.”
The company, which has 4,700 staff, invested a lot in communication. “You need to think about the time you should spend on communicating with people about the scheme and then triple that,” says Sadler. “Even though people say they want flex, they need to be reminded constantly of what is on offer and encouraged to use the platform.”
He advises employers to consider their reasons for introducing flex: “Is it to save money? Is it to aid the integration of acquired businesses? If the answer is yes, then the approach may be significantly different from an employer that simply wants to bolster its benefits package.”
Click here for more articles on employee benefits administration
