What will be hot in flex in 2015?

As another year begins, HR and employee reward teams will be reflecting on what has worked well in their flexible benefits schemes and looking ahead to what 2015 might bring to the broader flex arena.

Flexible benefits

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  • Technology will be a key driver of flex developments in 2015, particularly around integration technology that combines access to flex with personal finance and external links, such as price comparison sites.
  • Health and wellbeing will feature prominently in flex offerings, with more options for health monitoring as well as access to health and wellbeing initiatives and support.
  • Flex could be a deal-breaker in talent acquisition because benefits that reflect individuals’ needs will attract high-quality candidates.

Edward Smithson, head of flex and share plan at Buck Consultants at Xerox, says HR technology will continue to play an important role in the evolution of flex. This will help to drive the integration of flexible benefits schemes into employers’ wider reward strategies, as well as how plans are communicated to staff.

“Currently, an employer’s flex scheme will often sit to one side of the wider reward package, particularly in how it is communicated,” he says. “We are seeing greater demand for platforms that integrate flex with non-flex items of remuneration to give employees the full picture.”

For example, an employer might provide share plans or different types of pension arrangements, based on variable pay, yet flexible benefits systems will traditionally show a single, often basic, salary. Some systems, such as Buck’s Compass scheme, consolidate flex with share plans, multiple legacy pension scheme arrangements and other aspects of non-flex remuneration.

“Busy employees want access to consolidated information in one place and don’t want to have to look up separate pieces of information on different systems to get the full picture,” says Smithson.

Aggregation of tools

The sophistication of the latest platforms and portals also enables the aggregation of smart educational and financial modelling tools, as well as links to other sites. Some technology systems go further by enabling staff to bring together personal finances and workplace benefits, combining traditional banking and workplace reward plans, including flexible benefits.

For example, Aon Employee Benefits’ platform Bigblue’s money module aggregates an employee’s personal finance-related products and services, such as credit cards, bank accounts, mortgage payments and standing orders, which cannot be seen by their employer, alongside their employee benefits. The technology is agnostic and works with an employer’s providers, supporting its corporate and employee needs.

Jon Bryant, area director for London at Aon Employee Benefits, says: “The money module analyses income and expenditure, and can therefore help an employee to make the most appropriate flex choices. For example, they can use disposable income to fund tax-efficient flex choices, or avoid duplicating personal insurances that are part of their core benefits. Or they may take advantage of flex benefits rather than using high-street insurances.”

The flexible benefits offering itself will also come to look quite different in the months and years ahead. One change is likely to be an increase in the use of any time benefits, says Smithson.

Relaxation of salary sacrifice rules

“We talk about flexible benefit schemes, but they are often not that flexible, forcing employees to set their benefits at the start of the year and only allowing changes following lifestyle events,” he says. “The relaxation of salary sacrifice rules around pensions are the first step towards a truly flexible environment where employees can adapt their benefits to fit their lifestyle throughout the year.”

This will allow employers to integrate more seasonal initiatives into their flex packages, for example around Christmas and Easter. The technology will also be in place to enable employees to log into their package and make changes to their benefits choices at any time should their circumstances or needs change.

Another likely development is further integration of health and wellbeing benefits into flex schemes. For example, wearable technology is already being introduced into the workplace to help staff to track, log and monitor their progress online, as well as access information and resources to help them lead healthier lifestyles.

As organisations compete for talent, flexible benefits are also likely to become a vital negotiation tool.

Jade Gange, consultant at Capita Specialist Recruitment, says: “As more employees seek a package that fits their individual needs, a one-size-fits-all approach to reward is no longer suitable, making the ability to provide tailored benefits ever more important. With this focus, online flex will continue to be rolled out as employers hand control of reward schemes back to staff.

“However, the current pace of change is such that it is difficult to predict what is in store even a few months down the line, so [organisations] must be willing to be adaptable with employee benefits and prepare for a rather unpredictable future.”

Case study: Wolseley


Heating engineering firm Wolseley UK relaunched its flexible benefits scheme to update its offering and give the scheme a new lease of life. Last year, it moved its flex enrolment window to August in line with its financial year and introduced a broader range of benefits.

All 6,200 employees receive a flex fund worth 1% of salary, which they can use to buy additional benefits. New options offered through the plan include a bikes-for-work scheme, AA breakdown cover and a Gourmet Society dining card, in addition to existing benefits, such as dental insurance, life insurance and critical illness cover.

Employees can also select to pay their 1% of salary into their defined contribution pension plan, or take it as cash.

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Wolseley UK’s relaunch of flex is already paying off, with 25% of employees logging on to the system when the new benefits were introduced, and 140 of them selecting the bikes-for-work option.

Neil McCawley, head of reward, benefits and policy at Wolseley, says: “Our benefit scheme is part of our HR and reward strategy and recognises the individuality of our employees and the fact they may require different benefits, depending on their circumstances.”

Fastest growing Flexible benefits