Michael Rose: Does paternalism still have a place in benefits?

No organisation says it wants paternalism as one of its values or as a part of its culture.

So, to the extent that reward should reflect corporate values, as I believe it should, I do not think paternalism has a place in benefits.

One of the reasons why I believe flexible benefits can be so valuable is that they carry the message that we are not being paternalistic, but want to engage with staff in a different way.

I know a number of employers that saw this as the prime reason for introducing flex. Having said that, within their scheme, many employers have a minimum level of insured benefits, such as life assurance of one or two-times salary.

So there is often a moral or partly paternalistic dimension to even the way a flex scheme is constructed. But there is a business case for this because there is the potential for reputational damage in allowing staff complete choice to flex out of some risk benefits.

The ultimate move away from paternalism in benefits is cash, which provides complete choice. 

But I believe there are five reasons for providing benefits: specific market need, tax advantage over cash, providing a group benefit more cheaply than the employee could source, where there is also a direct value to the organisation, such as private medical insurance, and for moral and reputational reasons.

Where a benefit does not meet at least some of these, then go for cash.

But these are compelling reasons why a reasonable set of benefits, ideally with as much flexibility as possible, should be an important part of reward without being paternalistic.

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Michael Rose is director at Rewards Consulting