Benefits for the family

Many benefits packages are still tailored to suit the traditional nuclear family but as social norms change, should employers look to benefits that have a broader appeal, asks Victoria Furness. 

Family life has changed dramatically in the past few decades. The number of single-person households has risen, cohabitation has increased and marriage rates are the lowest since 1986, according to the British social attitudes survey published in January by the National Centre for Social Research.

The traditional definition of the family used to be a married couple with 2.4 children, in which the father was the main breadwinner and the mother the primary carer. While this remains the case for some families, Pam Whyteleaf, manager of Axa Icas’ LifeManagement service, says that many now define family in a different way. “The word family can be used to mean the extended family, step-families, one-parent families, foster families, same-sex families and so on. This gives employers a dilemma when it comes to defining a family for the purpose of their benefits package,” she says.

And it isn’t only the make-up of today’s families that differs from convention. More women now work and, in 30% of cases, they are the higher earners, according to the Social change, family formation and kin relationships study published by Swansea University in March 2005.

In many cases, however, these social changes have yet to be reflected in employee benefits packages, particularly if these have not been reviewed for some time and are still based on outdated conceptions.

Matt Waller, chief executive officer of Benefex, says: “There are still a lot of benefits based on the traditional profile of white, middle class and male. While some of those elements apply whether employees have families or not, we are [now] also seeing a lot of benefits geared towards working families.”

This change that is beginning to occur is likely to go much further given recent legislative developments. For example, under the terms of the Civil Partnership Act 2004, a same-sex partner must be recognised as equal to a married partner in the provision of insurance benefits, while in Scotland the Family Law Act 2006 made provisions for cohabiting couples.

As society becomes more accepting of diversity, some employers are beginning to question if they should be taking the traditional definition of a family into account at all when putting together their reward strategies. However, while employers may begin to make their benefits packages more appealing to a wider spectrum of employees, with differing personal circumstances, they should not underestimate the power of the family unit and the influence its members have on employee loyalty.

This has become increasingly apparent in relation to younger staff, with the emergence of the ‘helicopter’ parent who continues to manage and be heavily involved with all aspects of their children’s lives even once they have entered the world of work.

Taking families into account could therefore pay off for employers. Malcolm Bond, head of reward at PES, says: “A good employer will sample the situation in their company and ask employees what it should be doing to provide a better benefits offering, based on a range of employee backgrounds.”

For example, if an organisation’s workforce consists primarily of staff aged under 25 years, a family-friendly agenda may not be the best option when it comes to attracting and retaining employees. But if the workforce includes a large proportion of employees of child-rearing age, employers would be foolish not to take into consideration their wider circumstances.

Dr Harriet Mowat, managing director of Mowat Research, says: “We spend most of our time at work and the reality is that our domestic and personal lives impinge on our work, so to say we can divorce the two is unrealistic and disingenuous.”

Employers should not therefore underestimate the feel-good factor that can be created by extending benefits to include employees’ families. Colin Keane, director in the HR services department at PricewaterhouseCoopers (PwC), says: “People often mean to do things for their families [such as] take out medical protection but a large number never get round to it. So if an employer offers family cover and all an employee has to do is sign up to it online, they appreciate that.”

Family-friendly perks can include extended gym membership, private medical cover, dental insurance, and long-term cash savings schemes so staff can help their children save for items such as a house deposit.

For many employees, the legal right to request flexible working if they have caring responsibilities for a dependant or child under the age of six years, or 18 years if the child is disabled, provides a way of juggling work and family commitments. This right is set to be extended to parents of older children next year.

Tailor arrangements
According to Cary Cooper, professor of organisational psychology and health at Lancaster University Management School, flexible working should not just be limited to flexitime but also include individual arrangements based on an employee’s work and family commitments. “The HR department will be horrified by the fact they have to negotiate idiosyncratic arrangements but they could find they face fewer sickness and absence problems as a result,” he says.

Employers can also help working parents with childcare by providing perks such as tax-efficient childcare vouchers, on-site nurseries, emergency childcare cover or, in the case of the London Fire Brigade, means-tested financial assistance for childcare, which could particularly benefit single parents on low incomes.

Taking employees’ extended families into account also helps employers to recognise that an increasing number now have eldercare responsibilities. This may increase as the number of retirees looks set to overtake the number of people in work in the not-too-distant future. Keane explains that eldercare commitments are already impacting on some perks, as employers have asked whether they can extend private medical cover to employees’ parents, not just their children.

Other benefits, such as employee assistance programmes (EAPs), can help staff juggle their caring responsibilities as well as deal with any problems or stresses that arise from these. Donna Miller, European HR director at Enterprise Rent-A-Car, says: “Our employees’ time is stretched so anything we can do to help them manage it better, such as find eldercare facilities, makes them more productive and keeps them at work.”

The wide range of services that are now included in EAPs, such as debt management, counselling and legal help, can also help support employees through major life events such as a divorce or bereavement. In addition, financial planning services enable employees to understand their position with regard to their partners’ estates or pensions and help them juggle unplanned commitments. For example, an employee on their second marriage may have to provide for a young family while funding older children through university.

Enterprise Rent-A-Car has introduced a number of initiatives designed to help staff better integrate their work and family lives. As well as extending its on-site free flu jabs to employees’ partners and families, it also invites families to its summer social event. “We do not ask who employees are bringing – it’s up to them. Some even brought their grandparents this summer,” says Miller.

However, when taking employees’ family situations into account employers should consider whether the emphasis on family-friendly benefit policies alienates – or, at worst, discriminates against – couples without children and older parents. For example, staff with children have the right to unpaid time off work under statutory guidelines but employers are under no such obligation to grant sabbaticals to childless employees.

Flexible working doesn’t have to be the preserve of families or carers. For example, the London Fire Brigade lets any employee apply to work flexibly, regardless of their children’s age or even if they have children. Anne-Marie Fahy, policy analyst at the London Fire Brigade, explains: “This is open to all our staff. The only proviso is that we can provide a 24/7 fire service.”

Offering all staff the opportunity to take up the same benefits can help limit the impact of potential discrimination claims. Daniel Naftalin, a partner at law firm Mishcon de Reya, says: “Because of issues such as this, there’s a logic in moving towards flexible benefits. That way you can provide people with a menu of benefits and it is up to them to choose what they want. It doesn’t limit the argument [as] some employees may say the menu of benefits is broader for those with family responsibilities, but it does limit the problem.”

Controlling costs
Flexible benefits schemes can also protect employers from rising prices caused by claims history as the costs are passed on to staff. The Risk benefits – offering family cover: do dependents increase claims? study, due to be published by Benefex next month, shows claim rates are significantly higher among schemes that offer family cover than those that do not. It also finds that employees whose families make claims are more loyal to their employers than those whose employers do not offer family cover.

It seems that flexibility in all areas is the key to providing benefits that engage, attract and retain employees. In the Management futures survey of 1,000 executives published by the Chartered Institute of Management in March, 73% said work-life balance would be key to their job choice in the future. Jo Causon, director of marketing and public affairs at the institute, says: “This wasn’t just about families but people generally wanting the opportunity to work more flexibly.”

Peter Thomson, director at the Future Work Forum at Henley Business School, agrees: “Work-life balance is not the exclusive right of people with families, which is the way the current legislation treats it. We shouldn’t have family-friendly policies but rather employee-friendly policies, because every employee has a life.”†

The average family today…

31% of today’s parents are unmarried, cohabiting couples.

66% of people think there is little social difference between being married and living together.

1965: the average seven-year old child lived with 2.1 other children.

2008: The average child aged between six and eight years lives with only 1.5 other siblings, of whom around 10% are step-siblings or half-siblings.

20% of mothers born in 1970 are single parents, compared with one-in-eight mothers born in 1965.

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17% of dads born in 1970 are step-fathers, almost double the number of men born just 12 years earlier who are in the same situation.