Flexible benefits for a diverse workforce

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• A flex scheme needs to reflect the culture of different groups of staff.

• An employer must choose the design and communications that best reflect the diversity of the organisation.

• A flex scheme should include a range of benefits that are attractive to different demographics of staff who may be at different life stages, for example those with families or those nearing retirement.

Case study: Communication is key for Raytheon

Defence contractor Raytheon UK hopes to win over its diverse workforce with a communications offensive. The organisation, which has 1,300 employees, sends updates by email, plasma screen, newsletters, briefings and its intranet.

Gary Litster, pensions and benefits manager, says: “Because of our diverse work environments, we communicate
benefits information regularly through a number of channels. “At annual renewal, all employees are provided with
information in both paper and electronic format. The annual enrolment process can be completed online or via a paperbased form for those unable to access the online tool.”

Its flex scheme includes dental insurance, a health cash plan and critical illness insurance, plus discounted gym membership, childcare vouchers, a bikes-forwork scheme, holiday trading, retail vouchers and will writing.†

Litster says: “Employees have a wide variety of backgrounds, family commitments and roles. Our scheme offers benefits that are suitable for staff at different stages of their working life.”

Case study: Wrigley staff chew it over

Chewing gum maker Wrigley ensures its flexible benefits scheme offers something for all staff. An impressive 85% of the firm’s 500 staff take up the scheme.

Al Riley, senior rewards adviser, says: “We are diverse in terms of age and gender. The [mobile sales teams] tend to be recruited at a graduate age and are tech-savvy with their tablet PCs. The factory staff have higher retention rates. A number have been with us for 25 years.”

Wrigley’s scheme includes a pension and life assurance, as well as critical illness and personal accident insurance. Employees can also opt for perks such as private medical insurance, a health cash plan or dental cover.

Other options are childcare vouchers, gym membership, travel insurance, a wine club and holiday trading.

“Our most popular flexible benefit is purchasing additional holiday,” says Riley. “Not only does this generate interest and footfall for the rest of our flexible benefits, but it also gives [employees] additional flexibility to manage their personal commitments.”

Communication is vital, says Riley. “We have to ensure when we are communicating with computer-based staff via email that the information is available for our factorybased [staff]. We encourage line managers to communicate any news and direct staff to the internet cafe in the staff restaurant to make benefits choices.”

Providing a flexible benefits scheme for a diverse workforce calls for comprehensive research, careful planning and effective communications from employers, says Jenny Keefe

Philips Electronics casts its net far and wide to land the best talent. The electronics group’s 2,200-strong UK workforce can be found in research labs, factories and on shop floors. They are male and female, town and country dwellers, young and old, parents and single people. Job roles range from sales and marketing to engineering and customer services.

Nina Platt, UK reward manager at Philips Electronics, says: “It is because of this diversity that we try to ensure there is something in our flexible benefits plan to suit each and every employee. We do not expect our staff to take up all the benefits on offer. Instead, we try to make sure that each employee can find something to suit them and their lifestyle.”

To cater for its diverse workforce, Philips’ flex plan includes a wide array of perks, from private medical insurance (PMI) and travel insurance to a wine club and retail vouchers. “A relatively small percentage of people use childcare vouchers, but to those individuals it is extremely valuable,” says Platt. “However, our pension scheme is one thing we can recommend to all employees.”

Phillips’ situation is not unique. Most employers now realise promoting diversity makes good business sense. The stumbling block is how flex schemes can best address the needs of a diverse audience. Charlotte Godley, senior flex consultant at Mercer, says: “A flexible benefits scheme’s key objectives are to maximise savings and to drive engagement, so employers need to maximise take-up. The challenge with a diverse workforce is designing a scheme with something of interest to all employees.”

So how do employers ensure a flex scheme appeals to workers of all types? Kelly Gajjar, consultant at Lorica Employee Benefits, says: “Data is key. The first step is to understand the culture and different employee groups within the organisation. Break the data down by location, division, grade, age, gender and income. From this, organisations can choose design, providers and communications.”

Lifestyles and needs

Having assessed how the workforce is made up, employers can tackle which benefits to include in flex. In making choices, they could ask questions about employees’ lifestyles and needs. For example, 30-something employees may be keen on PMI for family cover, while single 20-somethings may fancy discounted gym membership.

Many organisations extend married couple benefits to same-sex partners. This is the approach taken by fund manager State Street. Hazel Keating, senior vice-president of global human resources, says: “We believe our range of benefits takes into account our diverse employee population, providing a range that could be suited to individual employees, single parents or those with extended families.”

But perks preferences do not just depend on employees’ family lives. Martha How, reward principal at Aon Hewitt, says: “White-collar and higher-paid people have greater funds to spend on benefits. Features such as bonus waivers for pensions and health screening tend to be used by the higher-paid.”

Geography is another consideration. Richard Stewart, director at benefits provider Redbourne, says: “Travel benefits are likely to be important to different groups of staff. We have seen high take-up rates in cities for bikes-for-work schemes, 30% at one employer, and season ticket loans.”

However, some organisations cannot resist putting too many benefits into flex, creating a scheme that is tricky to manage. Meticulous planning is therefore essential.

“The list of benefits that could be included is vast,” says Mercer’s Godley. “The risk is offering a lot of benefits with very low take-up. If there are no tax or national insurance advantages, it may not be worth offering the benefit through flex. But if there is a need to improve engagement in a particular segment of the workforce, it could be worth considering a benefit even if take-up is low.”

Communication strategy

Organisations also need to consider their communication strategy carefully. The first criterion should be that all employees should be able to access flex updates. For example, with its many shop floor and factory staff, Philips Electronics sends letters, as well as emails. Platt says: “We have a significant population who do not routinely have access to emails at work. For these employees, everything is sent to their home addresses.”

Another technique is slicing and dicing the workforce, sending specific information to particular demographics. Redbourne’s Stewart says: “It is important to make sure each group can access the right level of information to make choices.”

Lorica’s Gajjar suggests holding feedback sessions to ensure flex meets approval. “Get specific group feedback on the scheme from focus groups across different departments and employee groups,” she says.
Cable and Wireless Worldwide employs workers of 50 nationalities in 17 countries, ranging from under-20s to over-60s, and is keen to find out what they all want. Paul Bissell, head of reward, says: “We seek to maximise the flexibility and value of the package. We hold talkback sessions, monitor employee opinion data, flex take-up and consult colleague representatives.”

Read more about flexible benefits schemes