Severn Trent rejuvenates flexible benefits scheme

An employee survey in 2010 revealed that less than two-thirds of Severn Trent’s 6,000 employees were engaged with their benefits package, despite the fact that a flexible benefits scheme had been available to them since 2000.

The utilities organisation launched a new online flex scheme with provider Edenred, but that did not improve matters, with take-up remaining around 30%, the same as it had been with the previous paper-based scheme.

So the HR team set out to revamp the scheme. Its objectives included improving employee engagement by raising understanding and awareness of flexible benefits, increasing take-up and boosting the perception of Severn Trent as a great employer.

The resulting scheme netted Severn Trent the award for ‘Best flexible benefits plan – large employer’ at the Employee Benefits Awards 2013, which took place in June.

Consultations with employees

To ensure the new scheme was aligned with employee needs, Severn Trent consulted with trade unions, reviewed the findings of its annual employee surveys and hosted discussions with management groups.

To ensure the scheme aligned with the organisation’s needs, it consulted with the executive board, key stakeholders in HR and operations, and provider Edenred.

The flex scheme, called Lifestyle, was relaunched in June 2012 with benefits divided into five categories: Your free time, Your life, Your health and wellbeing, Your peace of mind and Your offers.

Chris Blakesley, pay and benefits manager at Severn Trent, says: “The scheme is more user-friendly and has a fresher approach. We have tried to engage more people in the enrolment process.”

Since it was first launched in 2011, the scheme has included critical illness insurance, personal accident insurance, life insurance, private medical insurance, health screening that can be flexed to different levels, holiday buy and sell up to five days, childcare vouchers and the SmartWater scheme, which enables employees to pay their water bill through a salary sacrifice arrangement.

Blakesley adds: “The SmartWater scheme is growing every year. I think the alignment with our flexible benefits scheme is quite powerful.”

Targeting employee demographics

Severn Trent wanted to introduce some new benefits during the relaunch so it could target certain groups of staff. For instance, its annual survey had found that take-up in the flex scheme was particularly low among the 1,600 employees in its contact centres.

“The contact centres are mostly the younger employees,” says Blakesley. “We tried to look at the scheme to see how we could engage them more. Working with Edenred, we asked: what is of interest to an 18, 19 or 20-year-old?”

As a result, Severn Trent introduced a computer scheme, a mobile phone scheme and access to magazine subscriptions. Blakesley adds: “While some of the traditional benefits also increased in terms of take-up, those new benefits seemed to hit home in terms of the populations we had not touched before.”

Severn Trent also focused on communicating to employees in different ways to target its varied demographic, which includes office-based and field-based staff spread across 164 UK locations.

Almost all (96%) employees have access to a work computer, but a large proportion work remotely, with limited access to the internet. It was important that this group was not overlooked.

The organisation sent out targeted messages via email and SMS text messages, encouraged sign-up through plasma television screens at its offices, hosted roadshows, used its employee newsletter and company intranet to promote the scheme, and posted all-inclusive benefits brochures to employees’ homes.

“We started to think about different communications methods,” says Blakesley. “We are a very dispersed company, so roadshows are a little difficult, but we held them at our main sites. We also used SMS text messages and direct emails where we knew people would be interested in particular types of benefit.”

The results

Following the relaunch, Severn Trent conducted its annual post-enrolment staff survey and learned that 55% of respondents had taken advantage of the scheme. Only 1% said they were unaware of the scheme, compared with 3% in 2010.

Almost all (95%) respondents to the survey said they were either satisfied or very satisfied with the flex scheme, and 97% said they would most likely or definitely recommend the scheme to others.

The flexible benefits revamp also showed a 31% net return on investment, with employer savings amounting to £163,834 (£25.86 per employee).

Severn Trent’s 2013 flexible benefits enrolment window opened in August, again with innovative and diverse communications leading up to its launch. The organisation has also introduced total reward statements to supplement and feed into the flex scheme.

“That’s another way of promoting flexible benefits: to give employees more information about what they get from working for the company,” says Blakesley.

Severn Trent will run its post-enrolment survey again to find out what staff might be interested in for 2014. Blakesley adds: “That was invaluable last time.”

Severn Trent at a glance

Severn Trent is a FTSE 100 business that provides water and treats wastewater in the UK through two complementary businesses: Severn Trent Water and Severn Trent Services. Headquartered in Coventry, it provides water and sewerage services to more than 3.2 million households and businesses in the Midlands and mid-Wales.

More than a third (28%) of its 6,000 employees are in their 40s, while the male/female gender split is 69%:31%. Although 96% of the workforce has access to a work computer, a large proportion of staff work remotely and have limited internet access.

What’s in flex?

  • Critical illness insurance
  • Personal accident insurance
  • Life insurance
  • Health cash plan
  • Private medical insurance
  • Health screening, which can be flexed at different levels
  • Dental plan
  • Discounted gym membership
  • Holiday buying and selling, up to five days a year
  • Childcare vouchers
  • Computer scheme
  • Mobile scheme
  • Magazine subscriptions
  • Retail vouchers
  • Travel insurance
  • Payroll-giving scheme
  • Bikes-for-work scheme
  • SmartWater scheme

The statistics

  • 55% of employees signed up to the flexible benefits scheme during the 2012 enrolment period.
  • 95% of employees said they were either satisfied or very satisfied with the flexible benefits scheme.
  • 97% said they would most likely or definitely recommend the scheme to others.
  • Only 1% of respondents were unaware of the scheme, down from 3% in 2010.
  • Employer savings have amounted to £25.87 per employee (£163,834), which adds up to a 31% net return on investment.


Read the full version of our Flexible Benefits supplement.