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Voluntary benefits with the biggest take-up among staff, according to industry experts are:
- Retail and leisure discounts
- Childcare vouchers
- Cycle-to-work schemes
- Holiday purchase
- Health cash plans
Retail and leisure deals top the chart of popular choices in voluntary benefits, says Jennifer Paterson
Once seen as the ugly duckling of the benefits family, voluntary benefits have blossomed in recent years, gaining popularity in the post-recession climate. Panasonic, Irish Life and McDonald’s all launched voluntary benefits plans in 2010. Since its launch in March, McDonald’s scheme has achieved a 60% take-up.
According to the Employee Benefits/ Alexander Forbes Benefits Research 2010, published in April, the five voluntary benefits employers most commonly offer are: gym membership, retail and leisure discounts, private medical insurance for dependants, health cash plans and dental insurance.
In comparison, the most popular voluntary benefits, in terms of staff take up, according to those in the industry, are: retail and leisure discounts, childcare vouchers, cycle-to-work schemes, holiday purchase and health cash plans.
A voluntary benefits plan is a cost-effective way of providing perks by offering discounts on everyday products and services, so it is not surprising retail and leisure discounts are seen as the most popular choices. George Farrow, client services director at Asperity Employee Benefits, explains: “What you have in terms of a voluntary benefit is an instant fix for the consumer.”
Richard Davies, head of employee benefits at P&MM, adds: “Discounts are at the top because their relevance is very high for any workforce. Every employee spends money at the shops housed in these programmes.”
Programmes more sophisticated
In recent years, staff discount programmes have become more sophisticated, says Guy Tarring, marketing director at PeopleValue. “They have become more all-encompassing so you can get [discounts] embedded in a single platform,” he explains.
When Veolia Transport UK launched a voluntary benefits plan provided by Personal Group in August, retail vouchers and leisure deals were among the most popular options.
Sara Moore, compensation manager at pharmaceutical firm Quintiles, adds: “Our most popular voluntary benefits are entertainment, retail and grocery vouchers.”
Childcare vouchers are the second most popular voluntary benefit among staff. These are a tax-efficient way to cover childcare costs, offering staff tax and national insurance (NI) savings and employers NI savings. “That benefit is frequently used and can be progressively accessed on a month-by-month basis,” says P&MM’s Davies.
Next on the list is cycle-to-work schemes. These are gaining in popularity because of high fuel and parking charges, environmental concerns, and fitness and health reasons. “More employers are embracing cycle-to-work,” says Davies. “There are 30,000-plus UK organisations that offer childcare vouchers to staff, while fewer than 3,000 currently offer cycle-to-work as a benefit.”
Another reason bikes are popular is the tax and NI savings available via salary sacrifice, as well as discounts on servicing and road safety courses. “The tax relief is a significant factor,” says Asperity’s Farrow.
The ability to purchase holiday up to a pre-set limit is the fourth most popular voluntary perk. “When people are trying to get their work-life balance right, the ability to purchase additional holiday is a fantastic and growing benefit,” says Davies.
It was hard to choose a fifth-place finisher because the remaining voluntary benefits are all deemed to be equally popular. Health cash plans, gym membership and dental insurance are all near the top of the list. “It is a bit difficult to put a handle on number five,” says Davies.
There has been a swell in take-up of some benefits in the post-recession climate, he adds. “There has been a significant increase in discount programmes in terms of the number of organisations embracing that concept and rolling it out to employees. That trend was already growing. Cycle-to-work schemes are rapidly being embraced by more organisations on a week-by-week basis. Those two are really growing rapidly.”
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