Last November Employee Benefits magazine and interactive conducted research into the attitudes and practices of UK employers regarding their benefits packages. The 282 respondents represented all sectors and all sizes of organisation. The results of the research have been written up in two parts. Part one looked at the benefits UK employers offer and the business influences that shape the package. It was published in our Strategic Reward supplement in January 2002, and can be found at www.employeebenefits.co.uk. Part two of the research report, which concentrates on flexible and voluntary benefits, are also available on Employee benefits interactive. The attitude towards putting in flexible benefits is rather similar to that of going to the gym. Far more people talk about it than actually do it. In fact, most people seriously consider it, but just a few go all the way. I don't have statistics for gym attendance, but our figures show that just 9% of UK employers have put in flexible benefits. This confirms research done by other institutions. It also means that just 25 of our 282 respondents have done it. And, although the desire for flex continues to be high, the likelihood of a sudden rash of schemes being implemented remains low. Our sample is too small to extrapolate much, but it appears that there will be a very slow, but steady, growth in the number of flexible benefits schemes on offer over the coming years. Looking at the 252 employers which do not offer flex, 13 are currently designing a plan and a further 73 have plans under consideration. But how many of these will carry their ideas through to full implementation is questionable. Fifty six of our sample had considered flex at some point, but ended up rejecting the idea. The benefits that employers decide to include in flexible benefits plans vary between organisations, but there are a few trends. The most commonly included benefit is the season ticket loan. It is an ideal benefit to flex, because it won't be of use to the entire employee population, but for those who choose it, it is a huge help. Insurances that benefit the employee but not the employer are also popular inclusions - for example car or home insurance. Some benefits are popular when they are added to flexible benefits plans, but for various reasons some employers would prefer to keep them in the core package instead. For example, if an employer wants to offer private medical insurance in order to reduce sickness absence then it wouldn't want employees to opt out of that benefit. Pensions or life insurance could also fall into this category. Although there has been anecdotal evidence of employers cutting down on the number of benefits they include in flexible benefits plans, our research shows no statistical evidence of this. Just one employer plans to remove a benefit from their list - in that particular case, it is cars. The benefits that respondents are most likely to add in the coming year are critical illness insurance and the opportunity for staff to buy and sell extra leave days. Among our little group of 25, we found that the benefits that are least likely to be included in a flexible benefits scheme are bonuses, share option plans, defined benefit (final salary) and stakeholder pensions. Providing more choice doesn't always mean staff will take advantage of it. The majority (72%) of organisations found less than half their employees made changes to their packages as a result of the introduction of flex. Only one employer found that all its staff made changes. It is probably a blessing that most employees do not make changes, because 80% of organisations use paper forms to enroll staff. Inputting data from these must increase the administrative burden significantly. Six of our respondents offer registration via the intranet while a further seven plan to go down this route. Just two use the internet, while a further two plan to introduce this method. Clearly there will be a move to more techno-friendly registration methods in the future. But if you want to be sure that staff really understand flex, nothing beats meeting with them face to face. A significant minority (44%) of our flex respondents do this. Failing this, a voice on the other end of a telephone can be extremely useful. Only three employers say they offer a helpline, although we suspect that most employers receive calls from staff anyway. Over the years flexible benefits plans have often been promoted as the solution to all benefits problems: they can offer every member of a diverse workforce exactly what they want; they reduce wastage because you are not spending money on benefits employees don't want and so on. Most employers have clear views on the pros and cons of flexible benefits, even if they have never implemented it themselves. Not surprisingly, almost all agree with the variety breeds contentment sentiments. They also feel that flex promotes understanding and appreciation of benefits. But opinions are more divided on how much impact the other commonly cited advantages have on business needs. The reason for this has much to do with what an organisations objectives are, and how the implementation of flex was carried out. For example, only 10% feel that implementing flex can help manage corporate change to a great extent. But, firstly, this isn't every employer's objective, and secondly, even if it is, it has to be done as part of a carefully managed broader organisational strategy to work. Simply putting in a flex plan won't do the trick on its own. For most organisations, the benefits of flex are clear to see. And if the popularity of the flexible benefits seminars at the annual Employee Benefits Conference & Exhibitions are anything to go by, interest from organisations remains high. Unfortunately, concerns over flex also remain high. And topping the list are worries about administration. Despite the introduction of many software systems in recent years to help with this, employers are still nervous. Anecdotal evidence shows that what worries employers most is the quality of data that they currently hold on employees and their benefits and whether this is up to date enough to cope with a new benefits delivery scheme, such as flexible benefits. Our respondents bear this out. The vast majority (71%) say they would be concerned about the readiness of their current administration systems, while 76% are worried about the complexity of admin. However, when we asked those respondents that had already put in a flex scheme how they found the administration, most (64%) said it was straightforward or simple, while only one organisation found it extremely difficult. Sadly that doesn't guarantee you'll sail through it. Almost a third (32%) admitted it was quite difficult For full results of the survey please go to Flexible Benefits supplement 2002 : results at a glance on EBi

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