Voluntary benefits report 2009: profile on IBM

Computer giant IBM UK is making full use of state-of-the-art technology to maximise staff take-up of voluntary benefits, says Nicola Sullivan

Achieving higher-than-average employee take-up levels for a voluntary benefits scheme is no mean feat. But by using the latest technology, a robust communications strategy and offering an extensive range of perks, IBM UK has enticed 73% of its 20,000-strong workforce to take part in its voluntary benefits scheme. This is pretty impressive considering the average take-up for a blue-chip company is around the 50% mark.

Voluntary benefits and retail discounts are not new to the information technology giant, which launched its first scheme, offering holiday trading and online discounts from 90 retailers, in 2004. But the firm’s provision has changed beyond recognition since then.

The company launched its current voluntary benefits scheme, IBM Rewards (provided by Asperity Employee Benefits, which took over from IBM’s previous provider, BringMe) at the beginning of 2008. The scheme gives staff access to discounted items from 1,300 different retailers.

Employee discounts

Through the scheme, employees can choose to shop online and take up in-store cards that they can load with various amounts to spend at specific retailers. They are then entitled to a discount, ranging from 5% to 10%, on the amount spent.

Discounted retail vouchers can also be purchased through the scheme, enabling staff to make a direct saving on goods from participating retailers.

Staff who shop online are also entitled to cashback on some of the things they buy. Instead of obtaining a straight discount on a purchase, cashback is paid into an online account, from where it can be withdrawn as a cheque or bank transfer.

Louise Phillips, IBM UK’s European HR benefits leader, says: “It is about using IBM’s place in the marketplace. We have a large number of employees [so] how can we give benefit to them? I guess, ultimately, by giving them a scheme that enables them to make savings throughout the year.”

Range of core benefits

IBM’s voluntary benefits scheme sits alongside a range of core benefits and perks offered through its flexible benefits plan You, which is provided by Mercer. Employees can enrol annually into the flex plan, which also includes salary sacrifice arrangements around some employee-funded benefits, such as childcare vouchers and bikes-for-work.

Meanwhile, the trust-based defined contribution (DC) pension scheme (which has been awarded a NAPF Pension Quality Mark), with employee and employer contributions, and private medical insurance (PMI) are offered to all IBM staff as employer-funded core benefits. “It is about making sure we have a full [benefits] portfolio for employees,” says Phillips. “It is about choice and flexibility. One of our key drivers is around employee engagement and satisfaction. How can we best achieve these with only an annual-enrolment [flex] scheme? “By enhancing our discount scheme and utilising innovative technology, we can provide an offering that drives satisfaction and engagement, but also fits in with employees’ purchasing decisions as it is available all year around.”

Tailored to lifestyles

As well as complementing the firm’s flex scheme, IBM Rewards is increasingly being tailored to suit employees’ lifestyles and affinity with online media. For example, IBM has set up a Twitter page to update staff on the scheme. It also uses daily news alerts to tell employees when new providers have been added to the plan.

“This really drives employees to get better information,” says Phillips. “It is obviously a media medium they want to get involved in because they signed up for it. It also allows us to target different types of employee. The number of staff following Twitter on a weekly and daily basis is increasing.”

An IBM community page on the scheme’s website has been endorsed by company HR director Jonathan Ferrar. He appears on video, explaining the advantages of the voluntary benefits plan and how it works. Interviews have also been recorded with employees who use the site, and anyone who posts a review advising others on how to shop online is rewarded with £50 cashback to spend within the scheme.

IBM is now planning to go one step further and introduce a personalised home page for users of the scheme this month. “If you are a user, you will go into the site and select the key areas you are looking at,” says Phillips. “If an employee has a child, they can select all the items relating to that.”

Google maps technology has been added to the website so employees can easily find the location of their nearest provider or retailer. “We are trying to use all the technology available to us to bring the site alive and have much greater usability for the employee,” says Phillips. “We recognise that our staff are very busy and want to make the best use of their time.”

Management information

Management information fed back from Asperity on how employees are using the scheme is very important to IBM, and Phillips says this is one of the main reasons for the scheme’s success.

“Management information is absolutely essential in understanding where our employees use the scheme and where they do not,” she explains. “It helps us decide where to remove and add offers in a way that is attractive to staff and also fits in with our overall strategy. The perks that we offer through the scheme match the IBM strategy and image.”

Employees’ response to benefits has always been important to IBM UK and it has consistently asked for such feedback. In 2007, for example, the company actively sought employees’ views to boost understanding of their benefits packages and drive take-up. It invited all employees to attend focus groups, which were held at six of the firm’s major sites in the UK.

The organisation was particularly interested in hearing the views of staff who had previously complained about, or praised, the benefits on offer. It also provided employees with information on the benefits it was offering at the time.

Certainly, IBM UK wants to have all relevant data at its disposal when deciding how to adapt its benefits package to suit its employees’ needs and their preferred methods of receiving information

Career History:

Louise Phillips, HR and benefits leader for Europe at IBM UK, has been with the company for 12 years and has held a variety of HR and benefits roles.

When she joined IBM UK in 1998, Phillips took on the challenge of project-managing and delivering IBM’s global HR compensation and benefit tools and workplace healthrelated projects.

In 2002, Phillips took on management and leadership roles for IBM projects within Europe. Three years later, she became global engagement manager for the organisation’s outsourcing team.

Phillips, who became a member of the Chartered Institute of Personnel and Development in 2007, says: “The benefits offerings that we have match the IBM strategy and image, which are both ethically and environmentally sound.”

IBM at a glance:

IBM was created in the United States nearly 100 years ago following the merger of three information recording companies.

The Computing Tabulating Recording Company, as it was then known, specialised in providing stock pricing data to traders using punch-card tabulating machines. It also designed and developed products to record, process, communicate, store and retrieve information.

Today, the firm claims to be the world’s largest IT and consulting services company and operates in more than 170 countries worldwide.

IBM was established in the UK in 1951. Its clients now include sole proprietorships, government and global organisations.

Most of IBM’s enterprise business is in industries that are broadly grouped into six sectors – financial services, public, industrial, distribution, communications, and small and medium-sized businesses.

During the second quarter of 2009, IBM’s global revenue of $23.3bn was 13% down on the same period in 2008. For the quarter, the company’s gross profit margin stood at 45.5%, up 2.3 points from last year. Meanwhile, its net income stood at $3.1bn, an increase of 12%.

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