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- Employers can identify whether a flexible benefits scheme will be right for their organisation by assessing its financial feasibility and determining whether it fits into their business culture.
- They should also meet key stakeholders in the business to find out whether they are all on board or if they are aware of any potential issues that may mean flex should not be introduced.
- Employers should also fully consult their employees.
Employers considering flex have a lot of groundwork to do to make sure it will suit them, says Jennifer Paterson
Introducing a flexible benefits plan is a big undertaking for an employer, so it is vital to ensure a scheme will suit the organisation before going ahead.
Employers have a number of issues to consider. According to Thomsons Online Benefits’ Employee Rewards Watch 2010 survey, published in June, some of the main criteria are the views of employees, understanding where competitors are with flex, and the project set-up and ongoing costs. Chris Bruce, managing director at Thomsons Online Benefits, says: “The reasons why an organisation may believe it is ready is because something has changed in the external landscape, such as a competitor offering a flexible benefits scheme. Or it could be an internal driver, such as the need to harmonise terms and conditions, and [flex] is a cost-effective tool to deliver that.”
For example, Vinci Construction used a flex plan to consolidate its benefits and harmonise the terms and conditions of its recently merged businesses. Colin Jellicoe, the firm’s human resources director, says: “In terms of the size of our business, there are not too many competitors who have taken the giant leap and moved into flexible benefits for all the workforce.”
Regardless of the reasons for employers considering flex, they need to ask a number of questions to determine whether it is right for their organisation, in terms of financial feasibility and cultural fit. On the financial side, employers should consider whether flex will provide a return on investment; the costs involved; and any potential tax and national insurance savings. Deciding whether it suits the organisation’s culture, meanwhile, will mean examining the workforce demographic, the benefits currently on offer, and whether there is a need to address any specific issue, such as employee engagement.
Will flex suit organisation’s culture?
Matt Waller, chief executive officer of Benefex, says: “The key thing is to take the time to do that feasibility piece and work out culturally if it will work for the organisation. I would ask any client: what do they want to get out of it? Is it to increase engagement? Is it to offer better benefits? Is it to be ahead of the competition? It is really about being clear about those objectives and that will enable them to assess whether it is right.”
The next step is to meet key stakeholders in the business, including representatives from the HR, legal and payroll departments, to find out whether they are on board. Graham Jarvis, managing director at Staffcare, says: “Find out what they want to achieve, understand what some of the key issues are in the business, and then, from that, employers can also get a view whether flex is appropriate.”
Once an organisation has chosen to bring in flex, the next step is to consult employees to see if it will suit them. Waller adds: “We advise [organisations] not to mention the words ‘flexible benefits’ because if employees have had it in a previous organisation, then they have already created an expectation of what might be put into it. Instead, ask staff if they would appreciate choice.”
Gauge employees’ appetite
Staff feedback can also help to determine the types of benefit that could be included in the scheme. Mark Groom, a partner in the global employer services team at Deloitte, says: “Organisations need to gauge the appetite of employees, so they might run focus groups. In an industry where cash is king, they might not necessarily get a great reception for introducing a flex scheme. But in an industry that is fairly sophisticated, where staff understand these benefits and enjoy the choice and the freedom they have got to determine their total reward, then there will be a lot of interest. It then becomes an issue of sitting down with groups of employees and finding out what exactly it is that they are going to be most interested in.”
Click on the links below for more sections:
Flexible benefits: Interview with Steven Bevan of The Work Foundation
Flexible benefits: Scheme structure can be made to measure
Flexible benefits: Corporate wraps
Flexible benefits: Benefits take-up boosted by flex