Flexible benefits schemes are traditionally a popular way to offer employees choice around the benefits they receive, but identifying which perks will achieve the highest take-up rate can be a tricky task for employers.
If you read nothing else, read this…
- Take-up of benefits offered via flexible benefits schemes can vary between industry sectors.
- Take-up could be limited by the perceived relevance of a benefit to an employee.
- Providing core levels of cover for some benefits and enabling staff to flex up or down to a certain extent can distort take-up rates.
Many believe a flexible benefits scheme can improve employee engagement, which, according to theEmployee Benefits/Towers Watson Flexible benefits research 2014 , published in April, has grown year-on-year, with 58% of employer respondents saying a flexible benefits plan has improved staff motivation and engagement , compared with 53% in 2013 and 41% in 2012.
But employees will engage with a scheme only if they value the benefits on offer. So what take-up can employers really expect for specific benefits?
Matt Duffy, head of online consultancy at Aon, says: “It really does vary quite widely and depends on what employers are setting the benchmark for: is it participation or selection? To find out the real take-up, organisations need to separate employees who are just logging on to the flexible benefits platform from those who are logging on and making a benefits selection.”
Take-up for some benefits will be limited by their very nature, with the product or service appealing only to a certain group of employees. Childcare vouchers, for example, will appeal only to working parents.
Data from benefits provider Vebnet shows that across 13 banking and professional service organisations with a combined employee population of 75,000, the highest average take-up for a benefit was 33% for travel insurance, and the lowest was 0.5% for gym membership.
Take-up varies across sectors
Richard Morgan, director of consultancy services at Vebnet, says: “Take-up varies hugely across sectors. Professional services firms tend to have the highest of take-ups, but this is not the case elsewhere. Low take-up can be seen in the manufacturing and retail sectors, which might be to do with the benefits on offer.”
Richard Stewart, head of flexible benefits and platform services at Mazars Employee Benefits, says: “Take-up could be damaged where the potential group is limited. To make sense of take-up rates, these need to be viewed as a proportion of employees that could use [each benefit] rather than the whole employee population.”
An attractive range of benefits can drive take-up, as well as the favourable tax treatment of some benefits, but the value proposition to employees is fundamentally driven by what the employer can do to boost staff interest, such as offering a flex allowance for staff.
“Employers funding either a specific benefit subsidy or some form of flex allowance, which an employee can spend as they like, really does drive the take-up of any benefit in a flex scheme,” adds Stewart.
The take-up of benefits can also vary between providers, depending on the nature of their client base.
Data from Aon shows that some benefits do not reach higher than a 10% take-up.
Lowest take-up rates
Some of the lowest take-up rates were for benefits such as bikes for work (8%), health screening (5%) and salary sacrifice cars (3%). However, salary sacrifice cars could see big growth, according to the abovementioned Employee Benefits/Towers Watson research.
According to data from Buck Consultants at Xerox, in some organisations with more than 1,000 employees, take-up of benefits such as health screening, bikes for work, will writing and gym membership will typically not exceed 5%.
Ed Smithson, head of flex at Buck Consultants at Xerox, says life assurance, pensions and private medical insurance (PMI) remain the most competitive benefits in a flex scheme because, along with dental insurance, these are the four benefits with a core level of cover that employers automatically look for in a flex plan. However, the fact that staff must take a certain level of cover can distort the way take-up is calculated.
Smithson says: “Employers are putting all their core benefits into flex now, such as a pension, PMI and life insurance, added with an element of choice. This distorts what goes on in flexible benefits schemes and it is very easy for employers to show high take-up figures.
“When an employer says 95% of its employees take up flex, what does this really mean? Has it got 95% actually engaging with the concept and principle of flex and making choices, or does it just mean 95% of the population are in the pension and have PMI?”
Benefits that are achieving higher take-up are those that help staff improve their work-life balance, such as buying and selling holiday. For example, Aon’s data shows that the highest take-up achieved for a benefit was for holiday trading , at more than 30%.
Home technology benefits
Mazars has also seen a growth in take-up of home technology benefits, such as iPads and laptops, with one of its employer clients seeing 605 of its 2,000 employees take up such benefits through flex. Holiday trading was also popular with another of Aon’s employer clients, which reported 35% take-up.
How employers structure their flex scheme can also influence the take-up of individual benefits. According to the Employee Benefits/Towers Watson flexible benefits research 2014, more than half (56%) of respondents offer a formal benefits scheme, either in the traditional sense or via a structured salary sacrifice arrangement.
Of this group, more than one-third (35%) offer their staff tax-efficient benefits via salary sacrifice as part of a cohesive flex plan. This compares with 12% in 2011, demonstrating an increase in the number of employers using salary sacrifice to structure flex.
However, as more flex schemes are structured around tax-efficient benefits offered via salary sacrifice, this may affect employees’ engagement with such plans because some may not want to give up part of their salary for benefits.
Steve Mason, business development manager at Personal Group, says the practice of offering tax-efficient benefits via salary sacrifice that are not part of a cohesive package has changed the definition of flexible benefits.
“I think the lines have become blurred between flexible and voluntary benefits and, as a result, what the real take-up of flexible benefits is,” he says. “A lot of organisations running a flexible benefit scheme are, in fact, running a voluntary benefits scheme with salary sacrifice [arrangements], for which take-up varies dramatically.
“The highest take-up of benefits in schemes is seen when the employer offers the traditional approach and gives employees a pot of money to spend on benefits, compared with offering benefits via salary sacrifice.”
Skew take-up results
Where employees are simply re-enrolled into the same benefits package each year, rather than making an active selection, this can also skew take-up results.
The key to making a scheme a success and boosting take-up of individual benefits is effective communication and ensuring the benefits appeal to staff.
Vebnet’s Morgan says: “Employers should treat employees like consumers to sell benefits that improve the organisation’s overall proposition. They should look at what motivates employees.”
Segmentation is another intervention employers can consider to boost take-up of individual benefits. Enabling staff to select benefits at any time of the year, instead of having one enrolment window, can also help.
Gethin Nadin, head of strategic alliances at Benefex, says: “It is about showing employees the practical implications of not taking up a benefit. This can apply to dental insurance, PMI cover, and many other benefits they have been relying on the state for.”
But whatever perks they offer, employers should bear in mind that take-up rates will vary depending on many variables. The real challenge is achieving enough employee engagement to boost take-up.
Mazars’ Stewart adds: “Assuming that an employer has a decent range of benefits and structure, it is employee engagement that is the real challenge for take-up. If employers start to see it is not working, the challenge is: do you invest more money into it to drive engagement and drive take-up?”
Dr Zofia Bajorek : How to make flex schemes succeed
Flexible benefits schemes are formalised systems enabling employees to vary their pay and benefits packages to satisfy their personal requirements.
They are no longer regarded as a simple staff retention tool and it has been suggested that this may be connected to efforts to improve employee engagement towards specific business goals, especially if there has been a period of economic or organisational instability.
But questions remain about their popularity and what organisations can do to promote them.
A reason for this could be that flexible benefit schemes can vary in complexity and generosity , and implementation can take between nine to 12 months. Organisations have to decide whether the time involved in initiating these schemes in relation to their value to the organisation, employee engagement and productivity, is worthwhile.
Staff buy-in from all levels of the organisation is also considered critical when deciding to implement flexible benefits, because finance directors may question the costs of implementing schemes, especially in times of economic uncertainty. Related to this,the way such schemes are communicated throughout development and the ongoing development of the schemes is seen as crucial to their effectiveness .
Organisations fail to promote all the choices that are available throughout the year or explain the personal value that the benefits may provide to an individual, resulting in low take-up.
Although organisations may have an online facility where such benefits are promoted , some have argued that senior and line managers have a role in cascading information down through the organisation to improve employee awareness of the benefits available.
Flexible benefit schemes are a way in which organisations can improve employee engagement by enhancing the choice of benefit packages available to individuals.
However, organisations must have an understanding of what benefits are of most use to employees, and the management of their implementation and communication is vital for their success.
Dr Zofia Bajorek is a researcher at The Work Foundation.
Case study: LSL Property Services
LSL Property Services launched anonline flexible benefits scheme for its 5,000-strong workforce after identifying a need to overhaul its benefits package.
The property group, which owns estate agency brands Reeds Rains and Your Move, launched the programme after staff focus groups highlighted the need to offer more choice.
Nearly two-thirds (64%) of employees wanted greater flexibility in their choices.
Gareth Whalley, head of group HR services at LSL, says: “The business had grown dramatically and, with it, the benefits had to grow, but previously there were different packages among employees who had joined recently and those that had been at the organisation for a while. We did not have a cohesive benefits package.”
The organisation previously offered childcare vouchers and a health cash plan.
The online portal, which uses Benefex’s RewardHub software and is branded as ChoiceMatters, was launched with Barclays Corporate and Employer Solutions. Benefits now include childcare vouchers, bikes for work, mobile phones, dental insurance, a health cash plan, health assessments , travel insurance and retail discounts.
“The first phase was to build on what staff wanted: flexibility,” says Whalley. “We wanted to offer a range of benefits to speak to every employee to attract them to use the scheme and not just do something for the sake of it.
“The one trigger that really helped and made sense was to look at what people wanted and look at the population of our organisation with a lens to offer a sharper focus.”
Interesting stats on the uptake of gym membership across the banking and professional services sector. Many of these organisations have in house gyms therefore impacting uptake. Across the GymFlex portfolio of 450 clients and 900,000 employees, our figures reflect an average 8% uptake in membership.
ssist you with success look on-line and conjointly choose the Sexy Womens Clothes on the web stores. About the author: visit the above Lingerie for
more info.
Saris with geometric stair step on the body and bold zari border or sarees with large zari temple motif border and graphic pallu are eye-ca
hollister outlet -1 year full time, and certificate III in dance- 1 year part time course. Once the students are done with their training process, they can enter the p
with geometric stair step on the body and bold zari border or sarees with large zari temple motif border and graphic pallu are eye-catchers. They suit
as stylish wear for a variety of occasions. Incredibly fine threadwork on Coimbatore Cotton Sarees in a variety of pleasing colours are trending and
are most suitable for festivals, like Diwali, Holi, Dushera, Pongal and traditional functions. They also suit as wear for wedding ceremonies, parties
hollister outlet monies. Chettinadu block printed borders with zari border is perfect wear for Bridal Occasions and Parties. Designer Chettinadu sarees with elegant an
d border with different colors is a traditional wear. Chettinad silk saree can also be used as daily wear. Chettinadu handloom saris come in cott
on and silk fabrics. Chettinad handlooms are known for their thickness, huge borders, bold checks, stripes and bright hues.Chettinad handlooms are kno
ed. Unnati Silks, has trendy designs, attractive patterns, in pleasing colours and combinations in its wide collection of Jamdhani cotton Sarees
and salwar kameez, at very reasonable prices. Unnati is one of the largest Indian ethnic online websites with over 300 varieties of traditional
sarees and salwar kameez. Dispatch is within 24 hours of order. Free delivery & COD is provided for retail. Worldwide express shipping caters to almos
hollister outlet the Mughal army. The weavers were brought to kota in the late 17th and early 18th century and the sarees came to be known as Kota-Masuria. Kota
other furnishing fabrics, mostly using cotton and silk. The current fashion trend follows Kantha embroidery as a yielding awesome salwar suits an
d sarees creation. The pashmina Cotton salwar suit decorated by Kantha thread work looks classy. It would aptly suit as daily casual wear, for school
and college as well as office. The artistically designed pure silk salwar suit with a lot of Kantha work and which depicts Indian folk art desig
babyliss pro perfect curl at symbolises the family tradition, like there is a sewed pattern to the gown that symbolises a family logo or crest. ??It is also appropriate to spe
required in a factory weaving large batch sizes, and small designs. The larger machines allowing single end warp control a very expensive, and can abercrombie and fitch outlet ellent stitching. A different ranges of the pleasant, colourful and refreshing Assam cotton sarees are available with Unnati Silks. An enviable d
isplay of 300 plus Indian ethnic sarees and salwar kameez materials available online and also in stores. Unnati silks addresses the need of each and e
http://www.wsn.koscian.pl/userfiles/Filekiteboarding-online-best-re.html
http://www.amcham.cz/www/files/best-cash-isa-hindi-definitio.html
http://www.kuenstlermesse.at/images/hindi-meaning-of-from-Selling-.html
http://www.acaballos.com.ar/images/media/best-air-conditioner-kiteboard-k.html
http://aweimagazine.com/userfiles/kiteboard-for-sale-online-k.html
The comments expressed in this article are very organized, well-researched and very easy to read. There’s no mistaking the points you are making. I agree.
I’m never sure why companies think gym membership is a perk. You’d need to pay me to go to one. And the tedious “compulsory safety course” where you need to listen to some boring man take a hour to deliver 10 seconds’ worth of information about how to use simple gym equipment is the final insult that makes it doubly-unappealing. If I want to join a gym, I can easily do so if I’m remunerated properly. And it’d be one close to my home, not my job.