How to source local discouts

Sourcing deas from local businessses that staff use regularly to include in a voluntary benefits scheme can enchance a plan’s value and make it unique, says Nick Golding

When it comes to the nature of the discounts offered through voluntary benefits schemes, many employers are beginning to see the value of offering staff options that are more likely to be relevant to their everyday lives. Receiving discounts on small items, such as meals in local restaurants or gym visits, may well be of greater use to employees than one-off discounts on big-ticket items available from online retailers.

The Employee Benefits Voluntary Benefits Research 2007 shows that more than half (56%) of employers now offer discounts with local retailers and service providers through their voluntary benefits plan. Some of these deals will be with local independent stores, while others will be with local branches of national chains. Offering staff deals at near-by gyms and restaurants or on local public transport, for example, enables employers to provide a more tailored voluntary benefits programme, rather than simply offering staff discounts on products that may not always be accessible to a number of the workforce.

This doesn’t mean locally-sourced deals have to stand alone from the rest of a scheme. In most cases, they can be integrated into employers’ existing plans under the same branding, whether these are paper-based or online.

Richard Beddall, head of business development at voluntary benefits provider Vectis, says: “Voluntary benefits are very much about national deals, but there are local shops near workplaces, where discounts will really add some value to the scheme.”

Employers that wish to offer local discounts for staff have two main routes open to them. One option is to enlist the help of one of the many providers now offering employers the benefit of their negotiating experience and buying power to secure local deals.

“We are now saying ‘give us the name of your organisation, and let us use our buying power to arrange the discount on your behalf’,” says Beddall.

The provider will wield its buying power by negotiating a discount with the named supplier which it then not only offers to the employer concerned but to all its clients nationally, so that employees from all over the country can use it if they are in the area. For example, if a local hairdressing salon agrees to offer a discount on the request of a specific local employer, it will also be provided to all the provider’s clients throughout the UK.

Michael Dougherty, managing director at Lealta Benefits, explains: “An employer with 500 staff can’t get retailers to agree to discounts, although they’re not small. We can offer retailers access to 800,000 customers so they are keen to work with us.”

The increased buying power that a provider is able to offer, means that it can be quite bullish when it comes to negotiations and is able to call the shots around the level of discount on offer. “We only engage with retailers that will offer us a minimum of a 10% discount,” explains Dougherty.

Using a provider in this way also means that employers are able to offer local discounts for all their staff, including commuters who live some distance away from the workplace. “People simply don’t live, breathe and work in the same square mile all year round. This is about engaging with employees in their leisure time,” adds Dougherty.

In some instances, however, the geographical location of employees will play a role in determining the success of local discounts offered through voluntary benefits schemes as some organisations will be better suited to this type of programme than others. “It does depend on geographical location [of staff]. If it is a public sector organisation, most employees are in one particular area, so it is very easy to do,” says Beddall.

Some organisations, however, may prefer to put together their own raft of discounts by speaking directly to local businesses, rather than using a provider to arrange deals on their behalf. Employers may even stand a better chance of negotiating deals with small independent outlets than providers. Stephen Forrest, HR business development manager at City of York Council, says: “I think for national companies you have to have that provider buying power, but for a smaller retailer or service provider, having 200,000 people wanting a discount at your store could be a turn-off.”

The council has negotiated over 100 discounts of up to 20% with local businesses for staff. It began the process by quizzing employees about where they shopped locally, and at which stores they would most value being offered a discount. The council then approached these businesses with its proposal of offering staff discounts. “We went into the stores and told them what we could offer them. We got a good response as we have over 100 local stores on board,” says Forrest.

He believes that this gives the council an edge over other employers in nearby areas. “We want to be able to say to our staff ‘this is what you get for working for City of York Council’, [and] it is unique to us,” he adds.